The TPP plan “died” and the textile companies that moved to Vietnam “will cry”
Abstract: According to US media reports, on November 10, US President-elect Trump met with Obama to discuss succession matters. Afterwards, US Senate Majority Leader McConnell announced that the Trans-Pacific Partnership Agreement (TPP) plan led by the Obama administration was ” “Shot.” The Obama administration also announced that it will not push for the passage of the TPP in Congress during its term. Since Trump himself opposes the TPP, it can basically be concluded that the TPP has died! In fact, “Seal
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According to US media reported that on November 10, US President-elect Trump met with Obama to discuss succession matters. Afterwards, US Senate Majority Leader McConnell announced that the Trans-Pacific Partnership Agreement (TPP) plan led by the Obama administration had been “shot.”
The Obama administration also announced that it will not push for the passage of the TPP in Congress during its term. Since Trump himself opposes the TPP, it can basically be concluded that the TPP has died! In fact, “Printing and Dyeing Learning and Exchange” has made a detailed report on the impact of PPT on China’s textile industry! Please click the link below!
Orders will fly southeast! China’s textile and apparel will be cannibalized
On October 5 last year, 12 countries including the United States and Japan reached the TPP (Trans-Pacific Partnership) agreement in the United States. The conclusion of this agreement triggered a strong response in the country. Since China did not join the TPP, some people believed that the TPP would “kick China’s butt” and that the United States and Japan would join forces to block China, which would have a disastrous impact on China. In particular, Obama’s claim that China cannot be allowed to formulate trade rules has aggravated many people’s dissatisfaction and concerns.
If China stays outside the TPP, some industries will be transferred to TPP member states, such as the traditional labor-intensive textile industry. Mainland textile companies have transferred spinning and fabric production lines. to Vietnam. The TPP may bring job losses and industrial losses to China’s textile industry. Among the various provisions of the TPP, the most eye-catching provision is “zero tariffs” – in principle, the TPP requires the elimination of all goods when conducting trade between member states. import duties.
In this sense, the conclusion of the TPP agreement is not good news for the Chinese textile industry. As a major country of origin of textiles, China will indeed be greatly affected, and Chinese textile and apparel export companies will face more competition and difficulties.
For example, according to TPP regulations, all processes and raw materials after “starting from yarn” for textile products must be carried out in TPP member countries in order to enjoy zero tariff treatment in 12 countries.
Zhang Yansheng, chief researcher of the China Center for International Economic Exchanges, told reporters that this may force some textile companies to move their factories from China to TPP countries. Zhang Jianping, director of the International Cooperation Office of the Institute of Foreign Economics of the National Development and Reform Commission, said in an interview with the media that due to lower tariffs, Vietnamese textile and clothing products may become more competitive than Chinese products in the U.S. market.
Malaysian economists believe that Malaysia has reached an agreement with 11 member countries, including the United States, Canada, Japan, Australia, Brunei, Chile, Mexico, New Zealand, Peru, Singapore and Vietnam. The Pacific Partnership Agreement (TPP) will help improve foreign trade and open up the North American market. Many export-oriented industries, such as textiles, palm oil, rubber and furniture, will benefit from it. However, domestic small and medium-sized enterprises, indigenous and state-owned enterprises will benefit from it. Enterprises may become losers.
Respond calmly! Free trade between China and 5 TPP members
As a major country with a GDP of US$10 trillion and trade in goods, the Chinese market is extremely important to all countries and has become a partner that many countries cannot ignore. TPP signatory countries, including the United States and Japan, cannot give up economic and trade exchanges with China. Among the 12 TPP countries, 5 have reached FTA (free trade agreement) with China, and 7 have participated in the negotiation of the “Regional Comprehensive Economic Partnership” agreement including China.
In addition, China has accelerated the construction of free trade zones and gradually built a free trade network based on its surrounding areas and radiating the “Belt and Road”; in September this year, China successfully hosted the G20…Europe has the potential to replace China’s textile industry. From spinning manufacturing to garment manufacturing, especially with the advancement of the TPP agreement signed between Vietnam and the United States, Vietnam’s clothing exports to the United States, Japan and South Korea have expanded and grown, and are now second only to China in the U.S. market.
The TPP will create more than 6 million jobs in Vietnam’s textile and garment industry by 2025. Vietnam’s textile exports to the TPP market account for 70% of Vietnam’s total textile exports. Once the TPP After taking effect, it is expected that the amount of textile exports to the TPP market will be increased by three times. It is estimated that Vietnam’s textile exports to the United States will reach US$55 billion in 2025. The average tariff on textiles exported to the United States will be reduced from the current 17.5% to zero tariffs. Vietnam’s textile and garment industry will become a big winner after the TPP takes effect. .
According to the British Reuters report, Vietnam, which was originally considered to be one of the first countries to ratify the agreement, has postponed the approval process, saying that it will make a decision depending on the outcome of the US election. . The report quoted Vietnamese sources as saying that in the next session of the Vietnamese Congress, which will open on October 20, approval of the TPP is not on the agenda “because the proposal submitted by the government to Congress is incomplete.” This means that Vietnam will not be able to approve the agreement until several months after the US presidential election in November.
Vietnam’s “Youth Daily” quoted the country’s National Assembly Chairman Nguyen Thi Kim Ngan’s statement as saying that although Vietnam is a founding member of the TPP, it still needs to refer to and consider the approval status of other countries, and How the results of the U.S. presidential election will affect the TPP will be evaluated at that time and a decision will be made after discussion.
Postscript: At present, it is difficult for textile enterprises to receive foreign trade orders and there is great inventory pressure. At the same time, due to many factors such as rising labor costs, fluctuations in raw material prices, and increases in loan interest rates, China’s textile industry will once again Falling into a reshuffle situation, the export situation is not optimistic. On the other hand, the price difference between China and international cotton prices continues to be too high, and the cotton costs of Chinese cotton spinning companies are at a disadvantage in international competition. Not only cotton spinning companies, but also textile companies including downstream textile and apparel companies are facing huge competitive pressure. The cost of cotton is higher than that of the international market, which has long been a problem that has plagued the development of China’s textile industry. It has become more prominent in the past six months when other costs have increased rapidly, which has largely led to the international competition in China’s textile industry. Strength declines.
Because of this, Chinese textile companies have to resolve their corporate difficulties through the layout of overseas production capacity, and they have “left” and invested in Vietnam. After Vietnam and the United States signed the Trans-Pacific Partnership Agreement (TPP), the main manufacturing processes of spinning, weaving, and printing and dyeing are carried out in member countries and can enjoy export tariff reductions. The tax-free treatment will further amplify the competitiveness of Vietnam’s textile manufacturing industry in the context of low processing cost advantages.
However, with the demise of the TPP, this advantage of Vietnam may “no longer exist”!
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