Italian companies invest in VN textile industry to capitalize on EU trade deal
More and more Italian textile firms are investing in Việt Nam to take advantage of the EU-Vietnam Free Trade Agreement and export to the European market, experts said.
Deputy Minister of Industry and Trade Hoàng Quốc Vượng said the EVFTA has opened up many opportunities for the two countries’ businesses, including small and medium-sized enterprises.
According to the General Department of Việt Nam Customs, trade with Italy was worth US$5.3 billion last year, up 13.71 per cent year-on-year, as exports jumped by 18.46 per cent to $3.44 billion.
The EVFTA, effective from August this year, is expected to help Việt Nam’s textile and garment industry increase exports to the EU by 67 per cent by 2025, according to the Ministry of Industry and Trade.
Textile, garment and footwear will be among the industries benefiting the most with their exports increasing by 13.49 billion euros ($15.23 billion) by 2035.
Giang said the EVFTA promises apparel export potential of more than $100 billion annually.
But to enjoy preferential tariffs, besides meeting strict quality criteria, Vietnamese businesses must also strictly comply with origin requirements. The rules of origin apply from fabric onwards, meaning exports to the EU must use fabric produced in Việt Nam, the EU or countries that have FTAs with both.
This is still a weak point for the Vietnamese textile and garment industry because most of its raw materials are imported from countries that have not signed trade deals with the EU. – VNS