WTO puts garment biz on pins and needles
Viet Nam News, Vietnam
HCM CITY — Viet Nam’s accession to the World Trade Organisation (WTO) will mean not only new opportunities but also challenges for its textile and garment industry.
US import quotas, imposed on some Vietnamese textile and garments products since 2003, will be lifted and Deputy Industry Minister Bui Xuan Khu said “it will be a golden opportunity for [the] sector.”
WTO membership would make Viet Nam’s investment environment healthier, attracting more foreign investors to its textile and garment industry, he said.
Vietnamese companies would receive more orders from other countries, giving a boost to textile and garments exports and encouraging enterprises to invest in expansion.
“I believe exports to the US will increase sharply, probably to double the present level, in a short period.”
However, there are also opinions that exports to the US may not boom after all once the quotas are lifted. After a similar move by the European Union, exports to that market actually declined. Khu, admitting some Vietnamese products were less competitive than those from other countries, said: “We might encounter the same situation in the US.”
With WTO membership Viet Nam will fully integrate with the global community, but the country will also be obliged to open up its market to goods and services from around the world.
Local businesses must prepare to sink or swim on their own, Khu said. “No more [Government] support can be expected.” But the high import tariffs slapped by the US on Vietnamese catfish showed the companies did not know how to blend into the world economy. Vietnamese companies that did not co-operate with the US investigation suffered double the tax rate as those that did.
Following WTO accession, Government subsidies for the textile and garment sector would come to an end. However, companies could mobilise capital from other sources by equitisation and stock market listing. — VNS
