Vietnam textiles up for fierce challenges

Vietnam’s textile industry will face great challenges, instead of opportunities, when the U.S. re-imposes quotas on Chinese clothing imports, a move which the European Union will likely soon follow. 

The U.S. has announced it will re-impose quota restrictions on three categories of Chinese clothing imports, arguing that the Chinese goods are damaging the American textile industry.

Last month, the U.S., and EU began investigating Chinese import levels following a massive surge in clothing imports into these countries after worldwide quotas were abolished at the beginning of this year.

Under World Trade Organization rules, countries have the right to act if they determine that serious market disruption has taken place.

Domestic market under threat

After the news was heard, Vietnamese textile producers expressed concern over the Chinese threat on Vietnam’s domestic clothing market.

With quota limits from the U.S. and EU, Chinese textiles will return to “attack” Asian markets, including Vietnam, said producers.

Chinese goods have always found ways to easily penetrate into Vietnam’s market due to its close geographic conditions, businesses said.

“Currently, Chinese textiles are already flooding the Vietnamese market because their prices are much lower,” said businesses.

When quotas are re-imposed, Chinese goods will saturate the Vietnamese market much faster, and on a much larger scale, textile producers lamented.

Little chance to boost export

Meanwhile, Vietnam, in theory, has a good chance to boost its textile exports to the lucrative U.S. and EU markets when Chinese clothing is hit by quota constraints.

But in reality, the Vietnamese textile industry are still at a disadvantage, according to an official from the Ministry of Trade. Since Vietnam is not yet a WTO member country, it is still subject to quota curbs for textiles, especially in the U.S.

Thus, quota limits on Chinese imports will likely benefit large textile exporters who are WTO members like India and Pakistan first, the official said.

As well, the domestic clothing market will face fierce competition not only from Chinese goods, but also from Indian and Pakistani clothes, the official said.

Furthermore, the competitiveness of Vietnamese textiles is not considered at high levels in the international market, added trade experts.

Source: VNExpress – Compiled by Hieu Trung
Story from Thanh Nien News
Published: 15 May, 2005, 12:45:50 (GMT+7)
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