This panel discussion will go cover the following topics pertaining to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the opportunities for sourcing in Vietnam: – How textiles and apparel goods will have access and qualify for preferential treatment within TPP countries and particularly Vietnam – The TPP’s impact on manufacturing, supply chain, procurement, as well as customer and supplier relationships – Specific verification procedures to be followed for textile and apparel companies – The TPP and Existing Free Trade Agreements – Qualifying for TPP Benefits – Duty Reduction Staging and Special Safeguard Measures

1. Comprehensive & Progressive Trans-Pacific
Partnership (CPTPP) and Sourcing
Opportunities in Vietnam
Presented By:
Do Thi Thu Huong, Commercial Counsellor
Embassy of Vietnam in Canada
August 22, 2018
www.ApparelTextileSourcing.com/canada/

2. 1
Table of Content
I. CPTPP – BRIEF INTRODUCTION
II. VIETNAM TEXTILES AND APPAREAL INDUSTRY
III. VIETNAM - ALTERNATIVE SOURCING
Vietnam Textile and Apparel Association (VITAS)

3. 2
CPTPP
•Signed
•Ratified
•Effective

4. 3
CPTPP
Without CPTPP
Duty
• MFN: 17% - 18%
• GPT: 10%-16,5% (very few)
Rules of origin
Manufactured in Vietnam
With CPTPP
Duty
• 0% on 1st day
• Gradual phase out – 3 years
Rules of origin
• Yarn Forward
• Exception
• Cut & Sewn
• Short Supply List

5. 4
Duty - 0% on 1st Year
Coats, Overcoats, Jackets
M&B shirts (excl. Knitted
man-made)
W&G shirts/blouses Suits (excl. cotton) Babies’s garment

6. 5
Duty - Gradual Phase-out In 3 Years
Jacket & Blazers Shorts & Trousers Dresses & Skirts
T-shirt, sweatshirt, cardigan … Sleepwear

7. 6
Yarn Forward Rules

8. 7
Cut & Sew
• Bags - HS 4202
• Synthetic Babies’garment - HS 6111.30 and 6209.30
• Brassieres - HS 6212.10

9. 8
Short Supply List
◆ Non originating materials
◆ Could be yarn or fabric
◆ Limited end product in some cases, eg outwear, shirts …
◆ 187 items: 8 temporary and 179 permanent
◆ Requirement
• Yarn or fabric
• Fiber content
• Yarn count
• Weight
• Finishing process in some cases
• End products

10. 9
Short Supply List
• Description: Double weave fabric of subheading 5407.10, of 66 to 72 per cent
nylon, 19 to 25 per cent polyester, and 6 to 12 per cent elastomeric, weighing
200 to 250 g/m2, treated for water resistance such that, under a head pressure
of 600 millimetres, not more than 1.0 gram of water penetrates after two
minutes when tested in accordance with AATCC Test Method 35
• End-use: Men’s water-resistant jackets of subheading 6201.93

11. 10
Short Supply List
All products of silk and vegetable fiber
Yarn or fabric
◆ Wool blend, incl. Cashmere, Camel
◆ Rayon/Viscose blend
◆ Acrylic blend
◆ Cotton/Synthetic blend + high fiber content of
• Wool
• Rayon/viscose
• Acrylic

12. 11
Short Supply List
◆ Outerwear
◆ Men’s and women’s shirts and blouses
◆ Dresses and skirts
◆ Swimwear
◆ Acrylic sweater
◆ Suit-typed jackets or suits

13. 12
Vietnam Textile & Apparel
Overview

14. 13
General Information
10% industrial
production
2.5 mil. workers
5% total
workers
2nd leading
export,
16% total
export
5th world’s
largest apparel
exporter
More than 7,000 enterprises
19.0 billion USD import value in 2017
31.8 billion USD export value in 2017

15. 14
Production Capacity
15
Materials
• 1,200 MT/year cotton
• 380,000MT/year PSF & other
Spinning
• 7.2 million spindles
• 1,830,000 MT/year
Weaving &
Knitting • 2.30 billion m2/year
Dyeing &
Finishing • 2.3 billion m2/year
Garment
• 5 billion pieces/ year
• 8.7 billion m2 fabric used, of which 6.5 billion m2 fabric imported

16. 15
Industry Size
Industry size: 7,000 firms; 2.5 mil. workers, ~25% of the labor force of
Vietnam’s industrial sector
70%
17%
6%
4% 3%
Firms by Sub-sectors (%)
Garment Knitting/Weaving
Spinning Dyeing
Supporting Industry
84%
15%
1%
Firms by Ownership
Structures
Private & JSCs FDIs SOEs
40%
25%
35%
Firms by Locations
South Central North

17. 16
Export Value
CAGR of Vietnam’s textile and garment export flows in 2007-2017 ≈ 15.3%
Main markets: USA, Europe, Japan, Korea, China, ASEAN.
Unit: Bil. USD
Main Markets In
2017
Other
27%
Korea
10%
Japan
10%
Europe
13%
USA
40%
10.15 10.42
12.62
16.28 17.47
21.13
24.73
26.78
28.23
31.8
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Vietnam’s Textile And Apparel Total Export
in 2008-2017
Unit: Bil.
Unit: Bil. USD

18. 17
Main Export Market
5.19 5.12 6.15 6.94 6.84
8.67
10.08
11.20 11.66 12.50
0.00
5.00
10.00
15.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
UNITED STATES
Unit: Bil. USD
1.85 1.78
2.66
3.48 3.27
3.62
4.37
3.48 3.67
4.00
0.00
1.00
2.00
3.00
4.00
5.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EUROPEAN UNION
Unit: Bil. USD
Unit: Bil. USD

19. 18
Main Export Market
0.96 1.04 1.17
1.72 2.00
2.45 2.74 2.92 3.04 3.22
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
JAPAN
Unit: Bil. USD
0.32 0.49 0.72
1.19 1.30
1.88
2.38 2.43 2.66
2.98
0.00
1.00
2.00
3.00
4.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
KOREA
Unit: Bil. USDUnit: Bil. USD

20. 19
Key Products
2.99
3.76
4.21
4.46 4.71
5.63
3.22
3.88
4.80
5.09 4.92 5.12
2.37
3.01
3.49
3.82
4.05
4.57
2012 2013 2014 2015 2016 2017
EXPORT VALUE OF KEY PRODUCTS
T-shirts Jackets Trousers Kid's clothes Shirts Dresses Underwears Fabric
Unit: Bil. USD

21. VIETNAM
Sourcing Opportunities
20

22. 21
Vietnam - Alternative Sourcing Option
1. Duty free
• Duty free under CPTPP Agreement
• Duty free or gradual tariff elimination under VN – EU FTA
• Duty free under dozen of FTA: Japan, Korea, China, Australia, New Zealand,
India, Russia ….
2. Partially Capable to meet rules of origin
• •Yarn production: 1.83 million MT/year
• •Weaving and Knitting: 2.3 billion m2/year
• Meeting about 60-70% manufacturing demand for knitting fabric;
approximately 25% manufacturing demand for woven fabric.
• •Vertically integrated development in some of the leading suppliers.
• •Products could meet yarn forward rules of origin: knit garment, pants and
shorts, shirts and blouses, denim …
• •Products might be eligible for short supply.
•

23. 22
Vietnam - Alternative Sourcing Option
3. Strong Competitiveness
• Sharpened skills of workers and productivity
• Better quality of products
• Stable government
• Uninterrupted energy supply
• Relatively low wage labor market.

24. 23
Preparation For CPTPP
Examples of Vertically Integrated Industry

25. 24
VINATEX
No Product Capacity Manufacturing Scale
1 Yarn (Ne30) 144,216 ton/year 12 subsidiaries
2 Knitted fabric 14,200 ton/year 5 subsidiaries
3 Woven fabric 165.4 million m2/year 4 subsidiaries
4 Garmenting 319 million pieces/year 21 subsidiaries

26. 25
Hoa Tho Textile & Garment JSC
Manufacturing capacity
• Yarn production: 18,200 ton/year
• Garment production: 23.6 million pieces/year
Products meet the rule of origin under CPTPP
• Shorts and pants
• Suits, blazers

27. 26
HANOSIMEX
Yarn Spinning, Knitting & Dyeing, Garment Manufacturing
Manufacturing capacity
• Yarn production: 12,000 ton/year
• Knitted fabric production: 4,800 ton/year
• Garment production: 36 million pieces/year
Products meet the rule of origin under CPTPP
• Knitted apparel: T- shirt, Polo shirt, Pants & shorts,
Sweat shirt, Dress, Coat

28. 27
Phong Phu International JSC
End-to-end supply chain (raw material – fabric , design &
product development, production management, quality
control, trade compliance, logistics to the customer
• 3 Fabric mills, 10 Garment factories, 8 Laundries, 2 R&D
Centers - 10,000 workers
Manufacturing capacity
• Yarn production: 30,000 ton/year
• Woven fabric production: 33.4 million m2 /year
• Denim fabric production: 20 million m2/year
• Knitted fabric production: 6,000 ton/year
• Garment production: 36 million pieces/year

29. 28
Phong Phu International JSC
Products meet the rule of origin under CPTPP
• Denim
• T- shirt, Polo shirt
• Pants & Shorts
• Dresses
• Shirts Blouses
• Coats

30. 29
RESOURCES
Do Thi Thu Huong, Commercial Counsellor
Embassy of Vietnam in Canada
www.vietnamembassy.ca
2018 Seminars
See More Seminars from the
ATSC 2018 Show:
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Canada/Sessions
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