Vietnamese textile firms to face challenges after WTO accession

Vietnamese textile enterprises will encounter many difficulties after the country joins the World Trade Organization (WTO), mainly due to weak competitiveness in design, marketing, technology and capital, local newspaper Investment reported Wednesday.

The firms will lose their customers in the domestic market when import taxes on textiles and cloths decrease and no longer receive state subsidy after the country enters the global trade body, hopefully late this year.

Now, local apparel firms import 85 percent of materials, specifically nearly 100 percent of synthetic fiber, 70 percent of cloth, and over 50 percent of threat, for their production.

Up to 20 percent of Vietnamese textile and garment enterprises will face difficulties and risk of bankruptcy after Vietnam joins the WTO, said Chairman of the Vietnam Textile and Apparel Association Le Quoc An.

Vietnam posted textile and garment export turnovers of over 3.9 billion U.S. dollars in the first eight months of this year, a year-on-year surge of 28.2 percent. It is estimated to reap 5.5 billion dollars from exporting the products, mainly to the European Union and the United States in 2006, up 14.6 percent against 2005, according to the association.

Source: Xinhua