Vietnamese apparel made with S. Korean fabric to enjoy lower tariffs in Europe
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|Illustrative image. Source: Duc Duy/VietnamPlus|
Previously, clothes needed to be made with locally produced fabrics in order to enjoy the benefits of the Vietnam-EU free trade agreement, according to the Ministry of Trade, Industry and Energy.
Subsequently, the Korean Ministry of Trade, Industry and Energy has revealed that with the Republic of Korea (RoK) representing the second-largest supplier of fabrics in Vietnam, the latest policy will cause greater demand for products from the RoK in comparison to other competitors such as those from China and Taiwan (China).
"With South Korea being the second-largest supplier of fabric in Vietnam, the latest policy will lead to stronger demand for South Korean products, compared with other rivals such as China and Taiwan," the ministry said in a statement.
Vietnam has to import up to 80% of raw materials in order to meet the needs of the domestic garment and textile industry.
In 2019, China accounted for 55 percent of the country's imports of fabrics, trailed by South Korea and Taiwan with 16 percent and 12 percent, respectively. Japan accounted for 6 percent.
Last year, South Korea's shipments of fabrics to Vietnam came to $2.35 billion, down 18.4 percent on-year.
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Vietnamese businesses exported nearly 850 million medical masks in the first eight months of this year.
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The Vietnam National Textile and Garment Group (Vinatex) has predicted its total revenue and profit in 2020 will fall remarkably from the previous year.
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Millions of TNG made-in-Vietnam face masks have been exported to Europe while Garco10 JSC has also received orders from Germany and the US.