Trans Pacific Partnership · the disciplines of the TPP and to benefit non-TPP countries to the...
Transcript of Trans Pacific Partnership · the disciplines of the TPP and to benefit non-TPP countries to the...
Trans Pacific Partnership
Seven Myths about Vietnam and Fabric Production:
How One Industrial Reality Proves Them All WRONG
Dr. Claudia AnselmiDirector of Sales & Operations, Hung Yen K&D – Carvico Group
March 6th 2013, Singapore
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Hung Yen Knitting & Dyeing Co.:
a Vietnamese Company
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Hung Yen is a leading Vietnamese company invested by Carvico (Italy).
Hun Yen produces world class warp knit fabric for swim and active wear.
� Initial investment of $40 Million USD by Carvico.
� 90% of fabrics go into garments for the U.S. market.
� ALL managers are Vietnamese, except for two Italian
directors.
� All workers are Vietnamese. Hung Yen represents
Vietnam’s future in a higher value chain segment of
the textiles business.
MYTH #1: Vietnam and other TPP countries don’t produce enough
HIGH QUALITY FABRIC to meet customer demand
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REALITY:
� Hung Yen and other Vietnamese companies produce world-
class fabric with Vietnamese materials.
TPP will stimulate further investment, industrial development and greater
output of high quality fabric in Vietnam. Give us the predictability and
preferential margins of TPP origin and you will not be disappointed.
Vietnam and Hung Yen / CARVICO is ready.
MYTH #2: Vietnam and other TPP Countries don’t have sufficient
capacity to produce the necessary QUANTITY of yarn and fabric in basic
products
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REALITY:
� Hung Yen and other Vietnamese companies have huge
potential to expand production of warp knit fabric (including
high chlorine resistant, nylon spandex, poly spandex).
� Malaysia, Mexico, Singapore and Vietnam have large yarn
capacity (i.e., nylon, polyester, cotton, denim) that could further
expand under TPP.
2010 2011 2012 2013 20150
5.000.000
10.000.000
15.000.000
20.000.000
25.000.000
30.000.000
HungYen capacity warp-knit fabric
MYTH #3: It will take TOO MUCH TIME for Vietnam to build fabric
and yarn infrastructure
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REALITY:
� Carvico’s Hung Yen investment in Vietnam took 9 monthsfrom the time they broke ground to full operations.
� Hung Yen and many other Vietnamese companies are already
operating and ready to expand.
Make TPP’s margins of preferences predictable and
investments will come.
That is the very reason why Vietnam has decided to join TPP.
MYTH #4: If Vietnam and other TPP Countries can’t use yarn and
fabric from CHINA, customers will migrate to Cambodia and Bangladesh,
which are likely to receive duty free-treatment from the U.S.
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REALITY:
� GSP preferences for countries such as Cambodia and Bangladesh
cannot be compared to stable TPP preferences and rules of origin.
� Cambodia’s and Bangladesh’s (current and future) industrial
reality in the sector of warp knit fabric cannot compare to
Vietnam’s offerings today.
Make TPP preferences worthwhile for TPP countries and
you
will see that TRADE WILL NOT BE DIVERTED.
MYTH #5: Allowing use of CHINA YARN and FABRIC in TPP
qualifying garments made in Vietnam will not harm Vietnam’s textile and
garment sector.
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REALITY:
� Massive subsidies are provided by China to its
fiber producers, distorting international trade
and creating risk if governments launch trade
investigations (i.e., costs, trade disruptions,
uncertainties, etc).
� Use of CHINA YARN and FABRIC in TPP
qualifying garments made in Vietnam will
HARM Vietnam’s textile and garment sector and
PREVENT its sustainable development into the
higher level of the value chain.
� Use of CHINA YARN and FABRIC in TPP qualifying garments will also harm, in the
medium/long term the very architecture of the TPP, which must not only cater to
traders’ margins, but also to sustainable industrial development, job creation and
the fight against unfair trading practices.
MYTH #6: A large “short supply list” is critical to the success of
Vietnam in the future
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REALITY:
� “Short supply” is slow, complicated, inflexible. Good for
lawyers. Bad for decision-making and flexibility.
� “Short supply” cannot become the “Trojan horse” to circumvent
the disciplines of the TPP and to benefit non-TPP countries to
the detriment of producers in TPP countries.
� With respect to warp knit fabric, Hung Yen could live with the
yarn forward rule of origin, but there is no need for a “short
supply list”. There is no short supply of warp knit fabric.
If “short supply lists” are necessary compromises in relation to other products,
then they must remain the exception to the “yarn forward” rule and must be
based on verifiable quantitative parameters. They must also be defined so
that quantitative a “carve out” may not jeopardize TPP countries’ interests.
MYTH #7: China’s advantage is because of “comparative
advantage”
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REALITY:
� This is WRONG and even kids know it: China is competitive
primarily because it subsidizes its production, engages in
systematic dumping and applies other unfair trading practices.
� The advocates of the China Fabric and Yarn for TPP rule simply
want to benefit from China’s WTO illegal subsidies and dumping
practices.
� This has already caused great distortion within the multilateral
trading system and it is difficult and costly to address through
domestic trade defense mechanisms and WTO rules.
Please do not expose TPP to similar distortions.
Tailor TPP to give benefits to TPP producers, NOT to non-TPP countries.
We only ask to be able to produce and grow our business within TPP without
having to worry about the unfair competition of countries like China.
CONCLUSION:
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� Hung Yen / CARVICO is ready to continue investing, producing, expanding
and employing in Vietnam. Our sector (warp knit fabric) can meet all the
challenges in terms of quality and quantity outputs resulting from TPP.
� The “yarn forward” rule of origin is acceptable and will assist TPP countries
like Vietnam to develop its textile industry in a sustainable manner and
along the entire value chain.
� There will be no “short supply” of warp knit fabric, both in quantitative and
qualitative terms, if the “yarn forward” rule is adopted for textile products.
� Therefore, warp knit fabric must not fall within a “short supply list”, if this
instrument is deemed necessary to broker a TPP deal in the textile sector.
� The TPP must first and foremost cater to the interest of TPP-based
producers. It should not serve the interests of competing countries like
China, Cambodia, and Bangladesh.
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THANK YOU FOR YOUR ATTENTION
HUNG YEN KNITTING & DYEING CO. LTD.
Pho Noi B Textile Garment Industrial Park
Nghia Hiep commune, Yen My District, Hung Yen Province – Vietnam
Tel: +84 321 6273 142
E-mail: [email protected]