Illustrative image (Source: VNA)Hanoi (VNA) – An official from the Ministry of Industryand Trade of Vietnam has said that Australia is a potential market forVietnamese textiles with the introduction of CPTPP.
“The market share of Vietnam’s garment in this market is modestbut still has room to expand,” according to deputy head of the Asia- AfricaMarket Department of the Ministry of Industry and Trade Nguyen Phuc Nam.
According to Vice President and General Secretary of the Vietnam Textile andGarment Association Truong Van Cam, the growth rate of Vietnam’s textile andgarment exports to Australia was just below 10 percent.
“However with the introduction of CPTPP the growth rate is expected to reachdouble digits,” he said at the May 9 conference that sought ways to boostexports of Vietnamese apparels to Australia.
As committed in the Comprehensive and Progressive Agreement for Trans-PacificPartnership (CPTPP) which was officially signed on March 8, 2018 in Chile, Australia will reduce its import tax to fivepercent in the first year and zero percent in the fourth year from theagreement’s validity date with most of HS 6203 and HS 6204 and HS 6206 (notknitted or crocheted) groups of products.For products under HS 6205 code will enjoy zero tax from the first year of theagreement enactment.
Meanwhile, the basic import tax rate for garment productsusually ranges from five to 10 percent.
Import turnover of textile and garment products of Australiagrew from three to five percent per year in the last five years, it was heard.
Currently, Australia has shifted to import and outsource inVietnam due to cheaper labor compared with China, along with preferentialtariffs.
However, Vietnam still faces a huge competition from China asthe rival’s apparel market share in Australia has risen to 60 percent, andIndia, which is also actively entering the Australian market.
Tran Van Quyen, a representative of Woolmark (Australia) inVietnam, noted that the purchasing power of Australians is bigger than that ofconsumers in the US and Europe.
Retail prices of goods in general and textiles in particular in the Australianmarket are often very high. Even with high-end products, the retail prices maybe as 10 times higher than the price of the products sold in Vietnam.
Quyen pointed out that “orders from Australia are usually small because theform of sales is mainly online business as stores do not want to stock goods.”
Many big Vietnamese enterprises are often not interested in thistype of orders, but small firms have showed their interests to it, he said.
In 2017, Australia imported about 9.32 billion USD of textileproducts from the world and Vietnam only accounted for 173 million USD of it,which was equivalent to 1.9 percent. - VNA
