Italian companies invest in VN textile industry to capitalise on EU trade deal

Saturday, Oct 03, 2020 07:50

Italian businesses are interested in investing in Viet Nam textiles and footwear sectors. — VNS Photo

More and more Italian textile firms are investing in Viet 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 Hoang Quoc Vuong 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 Viet 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 Viet 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 Viet 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

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