Vietnam, RoK sign deal on origin cumulation of garment and textile
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According to the Asia-Africa Market Department under the Ministry of Industry and Trade, in the framework of the meetings of the Vietnam-Korea Joint Committee on Energy, Industry and Trade Cooperation and the 4th meeting of the Joint Committee on the implementation of the Vietnam-Korea Free Trade Agreement in Hanoi, Vietnam's Minister of Industry and Trade Tran Tuan Anh and South Korea's Minister of Trade, Industry, and Energy Sung Yun-mo signed a number of important documents, notably the exchange letter of the two countries' governments on implementing the provision of origin cumulation of textile between Vietnam and Korea under the Vietnam-EU Free Trade Agreement (EVFTA), Vietnamplus reported.
The agreement has a special significance in helping Vietnamese enterprises take advantage of high- quality raw materials from South Korea and then export garment and textile products to the EU market.
|Illustrative photo: VNA
The EU is the largest market regarding the demand for textile and garment products with an import turnover of more than 250 billion USD / year, the Asia-Africa Market Department said.
In 2019, Vietnam's textile and garment exports to the EU only stood at 4.3 billion USD, accounting for 2% of the region’s market share.
When EVFTA comes into effect, economists forecast that Vietnam's textile and garment exports to the EU will rapidly increase by 67% by 2025. Nevertheless, under EVFTA’s rules, to enjoy tariff preferences, apart from meeting quality criteria, Vietnamese textile and garment products must ensure strict origin requirements. It is noted that the fabric material must be in Vietnam or the EU member countries. This is a weakness of the country’s textile and garment industry as most raw material is imported from non-EVFTA member states.
Therefore, Vietnam has negotiated with EU countries to allow the application of bilateral cumulation of rules of origin for textiles and garments. Accordingly, if domestic enterprises can import raw materials from the countries having trade agreements with both Vietnam and the EU (currently South Korea), the finished products will also enjoy the preferential tariff commitment.
Vietnam, South Korea target $100 billion trade by 2023
The two countries seek ways to balance trade that records Vietnam’s widening trade deficit over the past years, HanoiTimes reported.
Vietnam and South Korea have agreed to boost the two-way trade to US$100 billion by 2023 with three main pillars namely energy, industry, and trade.
The target was reached at the 10th Meeting of Vietnam-Korea Joint Committee on Energy, Industry and Trade Cooperation held in Hanoi on December 10-11 co-chaired by Vietnamese Minister of Industry and Trade Tran Tuan Anh and South Korean Minister of Trade, Industry, and Energy Sung Yun-mo.
The two sides discussed measures for the commercial balance that records Vietnam’s widening trade deficit for the past years.
In 2019, the two-way trade hit US$69.2 billion, of which Vietnam incurred a trade deficit of US$23.02 billion.
At the meeting, the two ministers agreed with an Action Plan to put forward the trade target set for 2023.
In terms of energy, the two sides vowed to promote South Korean investment in developing liquefied natural gas (LNG)-to-power plants and renewable energy projects.
|Vietnam's Minister of Industry and Trade Tran Tuan Anh and South Korea's Minister of Trade, Industry, and Energy Sung Yun-mo. Photo: Baocongthuong
Joint efforts in scientific research and energy efficiency were also included in the discussions.
Regarding industry, they reached a consensus on advancing technology transfer, improving human resources, and promoting investment and trade, mostly in the auto industry, mechanics, electronics, and garment and textile.
The moves will enable Vietnamese businesses to improve productivity and become more engaged in the supply chain in South Korea and globally.
The engagement will also enable them to take advantage brought by the bilateral free trade agreement (VKFTA), HanoiTimes added.
For bilateral trade, measures to boost trade turnover included tackling technical barriers in the import and export activities, creating more room for farm produce, minimizing trade remedies, protecting intellectual property, and developing logistics and distribution systems.
To achieve the targets, the two sides agreed to proceed with four key measures, including boosting South Korean investment into Vietnam, facilitating South Korea’s firms operating in Vietnam; supporting Vietnamese exporters of garment and textile, footwear, woodwork, agro-fisheries, and processed food to South Korea; enhancing technology transfer in the automobile industry, garment and textile, chemicals, mechanics, and spare part manufacturing for better export to South Korea and other countries.
On this occasion, the two leaders also discussed measures relating to customs and certificates of origin, and the building of the Electronic Origin Data Exchange System (EODES).
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