Vietnam’s garment and textile industry has passed a year full of difficulties and challenges. The biggest difficulty was that Vietnamese garments and textiles had quotas imposed on them while those of the WTO’s members were not subject to such limitations. Therefore, the industry failed to fulfil its yearly plan (US$4.8 billion of export turnover).
According to Deputy Trade Minister Mr. Le Danh Vinh, as forecast, Vietnam’s garment and textile industry will still have to deal with shortcomings as well as objective difficulties in 2006. Therefore, enterprises will have to make strong efforts to penetrate into new markets. To reduce enterprises’ expenses, the Ministry of Finance has issued a decision on the abolition of fees on textiles exported to the US. The Government will also allow garment and textile enterprises to transfer their quotas. Accordingly, they can control their exports.
In 2006, Vietnam’s textile and garment industry will be managed by the Government under a much more effective and flexible mechanism than the traditional one. From January 1, 2006, The Ministries of Trade and Industry will allocate automatic visas to garment and textile companies until their exports exceed 70 per cent of the total quotas.
On one hand, the new management encourages enterprises to export, prevent quota speculation, abolish the fact that enterprises are passive in export operation, ensure timely delivery and simplify administrative procedures; on the other hand, it weakens authority’s management and increases the potential occurrence of enterprise fraud.
Facing these foreseen difficulties, according to Mr. Bui Xuan Khu, Deputy Industry Minister, authorities should further raise enterprises’ self-awareness; develop a transparent and convenient mechanism and better administrative procedure reforms. The fact that authorities issue too many notices displays their management shortcomings. “How can enterprises remember and implement so many notices?” Mr Khu asked.
Mr Le Quoc An, President of Vietnam Textile and Garment Association has the same idea as Mr Khu. He said that in 2006 authorities should carry out direct talks with enterprises instead of email and postal exchanges.
In 2006, Chinese garments and textiles will be still see safeguard measures applied as exports to the US and EU markets. Accordingly, Chinese garments and textiles exported to these markets will be continually restrained. However, Chinese garment and textile companies are still considered big competitors of Vietnam’s firms next year.
Local enterprises can now register (with US import management unit) to deposit for their forthcoming garment and textile exports this year before signing contracts with foreign partners. The Garment and Textile Export Monitoring Committee is in charge of ensuring quotas equaling the amount that enterprises deposited until goods delivery.
Therefore, they can focus on their production rather than worrying about usual difficulties: “when enterprises signed contracts, quotas were available, but in the time of delivery, there were no more quotas, resulting in great losses”.
Vietnam’s garment and textile enterprises will face many obstacles in the coming time. They should make preparations for fierce competition with foreign counterparts occupying textile market. With an export turnover target of US$5.2 billion in 2006, the Vietnamese textile industry will certainly have its work cut out.
Kim Phuong
Vietnamese
