The Chinese are investing in Vietnam’s textile and garment industry before TPP comes into play. The garment industry is the strongest magnet for Chinese investors, while textile and dyeing also lure Chinese investment but at a lower level. Vietnamese apparel products would enjoy a zero tariff in the US after Vietnam signs the Trans-Pacific Partnership (TPP) agreement. Vietnam is working on a plan to help local manufacturers improve competitiveness when the TPP takes effect.
Vietnam now achieves an annual growth of seven per cent in exports to the US, and the growth might reach 12 to 13 per cent if TPP is favourable to the local textile and garment sector. Among TPP members, the US is the largest market for Vietnamese textile and garment producers.
A number of Chinese and Hong Kong textile and dyeing projects have got off the ground in Vietnam. A Chinese company, Pacific Textiles, is planning $180 million dollar venture in Vietnam with the Crystal Group of Hong Kong. Crystal will spend an additional $49 million raising the size of the project to 70,000 spindles. By 2025, Vietnamese textile and garment exports to the US may hit $30 billion. The greatest benefit TPP may bring to Vietnamese textile and garment products is a zero tariff.