Textile and Apparel Association: Lessons and suggestions for companies to "transform" for the new era.
DNHN - The Vietnam Textile and Apparel Association (VITAS) has learned many lessons and is well aware of its responsibilities after more than 24 years of operation. In addition, VITAS provides recommendations for textile and apparel companies
Promote global integration of textile and apparel businesses
Vietnam Textile and Apparel Association (VITAS) has gradually affirmed its role and responsibility in supporting and promoting the development of textile and apparel businesses over its 24 years of operation.
Recently, VITAS and the Vietnam Leather, Footwear and Handbag Association collaborated with the Ministry of Industry and Trade to submit to the Prime Minister Decision No. 1643/QD-TTg dated December 29, 2022, approving the "Industry Development Strategy Textile, Garment and Footwear to 2030, vision to 2035" with the goal of textile and garment export turnover reaching 50 to 52 billion USD in 2025 and 68 to 70 billion USD in 2030.
In particular, to expand international cooperation and trade promotion, VITAS has consulted on Vietnam's major international integration agreements. Specifically, the Bilateral Trade Agreement (BTA) with the United States, negotiations to join the World Trade Organisation (WTO), negotiations for the Trans-Pacific Free Trade Agreement (now CPTPP), the Vietnam-EU Free Trade Agreement (EVFTA), and the Regional Comprehensive Economic Partnership Agreement (RCEP). Thus bringing the voice of businesses to the table of negotiations to secure benefits for textile industry businesses.
VITAS is a member of and actively participates in the activities of numerous international organizations, including the World Association of Textile and Apparel Exporters (ICTB), the International Apparel Federation (IAF), Apparel Asia (AAF), the Southeast Asia Textile Federation (AFTEX), the Asia Fashion Federation (AFF), and the International Textile Manufacturers Federation (ITMF).
American Cotton Association (CCI), Japanese Ministry of Economy, Trade and Industry (METI), Japan Textile Import Association (JTIA), China National Textile Council (CNTAC), Korean Federation of Textile Industry (KOFOTI), Korea Institute of Technology and Industry (KITECH), Taiwan Textile Federation (TTF), etc. are among the international organizations with which VITAS collaborates.
VITAS has recently coordinated the organization of several seminars, workshops, and training programs to help businesses raise awareness, and acquire the knowledge and skills necessary to meet new market requirements. significant field. Each year, VITAS organizes dozens of trade promotion delegations to attend international textile and apparel trade shows and exhibitions. Coordinate the organization of numerous domestic fairs and exhibitions on fashion products, raw materials, and textile equipment.
Representing the voice of the business community, VITAS has compiled the opinions of its members, conducted research, and proposed solutions to the Government and relevant agencies for a variety of issues. For instance, recommending and proposing policies to facilitate trade, simplify administrative procedures, conduct specialized inspections, and reduce taxes and fees for textile and apparel businesses. In particular, unreasonable tax and fee policies burden businesses.
In addition, VITAS has coordinated with the VCCI and industry associations to comment on and propose numerous policies to remove obstacles to production during the period of the epidemic, as well as to amend several laws, decrees, and circulars to facilitate production. Commercial advantages, reduced compliance expenses, and enhanced business competitiveness.
Over the association's more than 24 years of operation, VITAS has accumulated numerous lessons and experiences. First and foremost, the Association must play a significant role in contributing to and proposing development strategies. Analyse and propose policy mechanisms to eliminate obstacles and promote business growth. The Association will only then become a reliable resource for member businesses.
Second, the Association must play a pivotal role in synthesizing, analyzing, and disseminating information on the global and domestic textile situation to assist businesses in orienting their operations. Connect members and facilitate trade between businesses and customers.
Thirdly, the Association must join and actively participate in international textile and garment organizations to demonstrate its position as one of the world's leading exporters of textiles and garments. Building the reputation of Vietnamese textiles and garments among international colleagues and friends.
Fourth, the Association must utilize its position as a member of the Prime Minister's Administrative Procedures Reform Advisory Council to advocate for the elimination of obstacles and difficulties to create favorable business conditions. As a member of the National Wage Council, you should ensure the harmonization of benefits for employers and employees when the minimum wage is increased.
Lastly, the Association must devote sufficient attention to the field of human resource training, particularly the development of high-quality human resources to meet integration requirements. We must establish a progressive and harmonious labor relationship, a culture of entrepreneurship, and a bond between employers and employees.
New suggestion for "new era"
General Secretary Nguyen Phu Trong signed and disseminated Resolution No. 41-NQ/TW of the Politburo on Building and promoting the role of businessmen in the new era on October 11. This Resolution contains numerous new provisions that meet the needs of entrepreneurs and the business community. Representatives of the Vietnam Textile and Apparel Association have provided suggestions and ideas to keep up with the orientations and directions for the development of businesses and entrepreneurs in the new era while being cognizant of the numerous existing obstacles. a suggestion.
First and foremost, VITAS requests that the State swiftly pass the Associations Law and stipulate that 100% foreign-owned companies can become official members of the Association to coordinate activities, form supply chains, and collaborate. business, exchange, learning, experience gained. The State conducts research and promulgates a separate Law on Associations for key export industries that employ a large labor force and play a significant role in the economic development of the nation. According to VITAS, it is difficult to implement a general law for hundreds of Associations and Associations of all types, fields, and sizes.
Additionally, the VITA's representative urged the State to permit the Association direct access to support capital from international organizations for projects promoting international integration, sustainable development, and climate change mitigation. Before 2020, VITAS collaborated with an international organization on the "Promoting Sustainable Development in the Textile and Garment Industry" project, which was approved by the German government and had a budget of 1,3 million EURO. Nevertheless, according to Decree 56/2020/ND-CP dated May 25, 2020, the Government, VITAS could not be implemented directly, so the partner transferred the capital to cooperate with the Association. of another nation.
Thirdly, VITAS requested that the government direct ministries and local branches to implement Decision 1643/QD-TTg of the Prime Minister approving the Textile, Garment and Footwear Industry Development Strategy until 2030, with a vision to 2035, to form large textile and dyeing industrial complexes and parks in several qualified locations. Specifically, attract only high-tech fiber, textile, and dying investment projects that comply with labor and environmental standards. The textile industry must eliminate bottlenecks in yarn production to increase the efficiency of economic integration, comply with rules of origin, and take advantage of gradually decreasing tariffs by the roadmap to 0% of FTAs. High-quality fabric that has been dyed. In reality, businesses must convert to "green production" to quickly catch up with competitors in the export race. However, "greening" is a process that takes time to complete for businesses. Businesses must complete these steps, which require substantial capital for technology investments and highly qualified human resources. Vietnam remains restricted.
Next, VITAS requests that the State eliminate the requirement to pay VAT on the purchase and sale of raw materials for export within the supply chain. VITAS believes that establishing domestic supply chains is crucial. However, when businesses use each other's semi-finished products for export production, they are required to pay 10% VAT. They will complete tax refund procedures following exportation. This forces businesses to borrow from banks and endure lengthy and cumbersome tax refund processes. As a result, many companies exclusively outsource rather than develop export production.
The economic, environmental, social, and geopolitical crises that accompany protectionism will continue to contribute to global instability in the remaining months of 2023. In the remaining months of 2023, the textile and fashion market is anticipated to face numerous challenges, with sales growth ranging from -2% to 3% as a result of the European market's contraction. Europe (estimated to be between 1% and 4%). The global demand for textiles and apparel is projected to reach approximately 700 billion USD in 2022, a decrease of 8% compared to 2022 and lower than in 2020 when the Covid-19 epidemic occurred. In addition, brands have stringent requirements, such as a reduction in production costs, small orders, fast delivery times, higher quality standards, and the use of fabrics containing recycled fibers.
With a severe lack of orders and rising input costs, it is anticipated that Vietnam's textile and garment industry will face several challenges. The principal export markets have not yet recovered, while fierce competition continues in the domestic market with the participation of numerous foreign brands and companies.
The Vietnamese textile and apparel industry anticipates a breakthrough, however, as a result of the government's new directives, VITAS's support, and the business team's intelligence and solidarity-based resolve. Restoration and progress in the new era.
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