Speaking with textile and apparel businesses in a recent meeting in the Ho Chi Minh City, Bui Xuan Khu, deputy minister of trade and industry, said the Government will stand beside textile and apparel exporters to boost the foreign-currency earning industry.

Vietnam aims to gain US$9.5 billion from textile and apparel exports next year compared to an estimated $7.8 billion by year-end.

The industry is now competing with crude oil to become the country's top export earner.

Pham The Dung, head of the ministry's Import-Export Department, said the US monitoring program is still threatening Vietnam's exporters in 2008.

The US is the country's largest export market.

Khu expressed his concerns to manufacturers who are likely to compete with each other to gain large orders from U.S importers, giving scant regard to prices, which could be detrimental to the country's exports.

The US government could initiate an investigation into Vietnamese textile and apparel exports if prices peak due to dumping, said ministry officials, adding there were also concerns about the large volumes of products temporarily imported from neighboring countries and exported to the US with Vietnam's shipments.

He said local exporters will face a new challenge as the European Union (EU), Vietnam's second biggest export market, lifts quotas for products from China in 2008.

Tax breaks sought

He added that the Japanese market – the country's third largest - also presents an obstacle to exporters who have yet to enjoy the lower tariffs that other ASEAN nations benefit from.

Vietnam exporters currently undergo a 10 percent import tax, while other members such as Thailand, Indonesia and the Philippines experience no such charge.

Khu said the government will try to speed up negotiations with its counterparts in the US to remove the monitoring program, or at least reduce categories monitored in the program.

It will also try to reach trade agreements with the Japanese government so that local exporters are able to enjoy the same tax policy as other ASEAN members.

Internal improvements needed

Many local manufacturers have also experienced internal hurdles which create more pressures in their factories.

They said present price hikes are increasing input costs and adversely affecting the lives of their employees.

They are anxious because there is currently a huge shortage of skilled labor, and if pressures from prices remain high, more labor strikes could follow.

A survey from MIT says that costs for the industry’s materials increased by about 9.3 percent while prices in finished products rose by just 1.3 percent.

To boost exports and gain higher earnings, the sector must improve infrastructure such as ports and roads, said Herb Cochran, Executive Director of American Chamber of Commerce (AmCham) Vietnam in HCMC.

He said the country's textile and apparel products are reputable in the US and exports would increase in the future, so long as local manufacturers retain their high quality

Source: ThanhnienOnline