INTERNATIONAL
Export of cotton-based textile goods fell in 2015-16 by 2.1 per cent, from $37.1 billion in 2014-15 to $36.2 billion. This was part of the larger trend of a fall in merchandise export, down for a 17th continuous month in April. While competing nations Bangladesh and China have been blamed for aggressively edging out Indian exporters from thew traditional markets like Europe, industry insiders also blame less availability of cotton. Cotton-based readymade goods, among the highest foreign exchange earners among textile products, fell two per cent; cotton fabrics fell a little more than four per cent. The high price of domestic cotton, coupled with heavy duties on import of cheaper Chinese varieties, have hampered production of cotton goods, said Apparel Export Promotion Council head Ashok G Rajani. Successive droughts have reduced the supply from India, traditionally world leader in cotton production. According to estimates from the Cotton Association of India (CAI), the country is likely to produce 34.1 million bales (a bale is 170 kg) in the 2015-16 season, which ends on September 30. This is down from last year's 38.3 mn bales. Textile exports dipped in 2015-16 Also, raw cotton is exported in large quantities to Bangladesh, Pakistan and Vietnam. In the current season, about 6.5 mn bales have been exported so far, said Dhiren Sheth, president of CAI. Domestic manufacturers say this high export demand pushed up prices. Also, high dependence on export to China and the sensitivity of India's shipments to China's policy on a reserve cotton stock were a factor for the fall in cotton-based export.
Apart from cotton, manmade yarn also registered a major decline in export, of 11 per cent. “Manufacturers have been slowly making the transition to manmade fabrics and yarns but such a trend will dissuade them,” said Shaheed Khan, managing director, RK Fabrics. Though textile exports provided 13 per cent of all exports in terms of revenue earned, sectoral experts had predicted a fall in FY16 year. This was due to the rate of growth being a marginal 0.5 per cent in 2014-15, down from a significant rise of 12.4per cent the year before. The government is worried, given the sector's potential for labour absorption and revenue earning. “We are discussing with the commerce ministry about extending of duty benefits to a number of textile products,” said a senior official in the textile ministry. The government had last year started a Merchandise Exports from India Scheme. This allows duty credit scrips to be transferred or used for payment of a number of duties, including the basic customs duty. Exporters say the government should help them in finding newer markets.
SOURCE: The Business Standard
India, the world’s biggest producer of cotton has nearly halted cotton exports as local prices have rallied due to tight supplies because of drought. The price rise could subsequently push up fabric and clothing prices and put pressure on the margins of garment makers. This has also forced key importers like Bangladesh, Pakistan and Vietnam to turn to other suppliers. The freeze in Indian export will prompt Brazil, Australia and United States to raise shipments and has pushed global prices to near their highest since August. Chirag Patel, chief executive officer at Jaydeep Cotton Fibers Pvt. Ltd, a leading exporter said that in last three-four weeks Indian exporters could not sign a deal as cotton is more expensive than Brazilian or Australian supplies. He further said that the landed cost of Indian cotton for buyers in Pakistan and Bangladesh is at 75 cents to 76 cents per lb compared to around 73 cents for Brazilian cotton. Pakistan and Bangladesh prefer Indian cotton due to lower freight charges. Cotton supplies in spot markets have been dwindling even as domestic textile units are ramping up purchases, Patel said.
Local cotton spot market prices have surged 10 percent from a month ago to 38,400 rupees per candy of 356 kg (73.5 cents per lb) due to limited supplies after consecutive droughts cut production. A candy is equivalent to about two Indian bales of 170 kg each. India may produce about 34.1 million bales of cotton in the 2015/16 season that started on Oct. 1, down from last year’s output of 38.3 million, the Cotton Association of India (CAI) estimates. So far during the 2015/16 season, India exported around 6.5 million bales of cotton, with Bangladesh and Pakistan accounting for more than half of the total exports, said Dhiren Sheth, president of CAI. In 2014/15 India exported 6 million bales. In October to April cotton supplies in Indian spot markets fell 12.5 percent from a year ago. The industry failed to judge the impact of drought on the production. Output turned out lower than the initial estimate, said a dealer with a global trading firm. According to a trader based in Rajkot, Gujarat, the new cotton crop usually begins arriving from late September, but this year as sowing has been held up in key producing states due to delay in the monsoon, supplies would start only from mid-October. Now textile units are aggressively buying to make sure they have stocks for the next four months.
SOURCE: Yarns&Fibers
The Centre of Indian Trade Unions (CITU) has alleged that the management of a mega textile mill here denied social welfare benefits to its employees. It also despatched a letter to the Ministry of Labour and Employment. Amrik Singh, member of the union, demanded the intervention of the ministry in the matter. He said, “We are well wishers of the mill and wish more production so that it earns more profit and workers be also given the due share of profit enabling them to lead a good and respectable life in the contemporary society.” The letter stated that in the month of July 2015, the works committee representing the workers was elected through a secret ballot conducted by the mill management. The committee consisted of seven members. It states that there were 900 members of the mill whom the committee represented. It says that demand notes were presented to the management and some other demands were also brought to the notice of the management from time to time. But instead of consulting and discussing the issue with the elected works committee, the management unilaterally implemented a few demands partially. The union added that safety, health, welfare and other similar issues were ignored. It said the safety inspector seldom visited the mill to suggest safety measures. It demanded that work hours, lunch break, overtime rates and other such facts be displayed on the notice board. Besides, weekly off be given with full wage as presently the wage was not being given. Further, contractual workers should be regularised after 180 days, detailed salary slip must be released and those workers who were not allotted quarters must be provided house rent allowance.
SOURCE: The Tribune India
India Handloom Brand under Ministry of Textile - Government of India is opening up to change, focusing on sustainable growth & welfare of the weavers. Keeping this in mind, iShippo.com an online marketplace for home based business joins Development Commissioner Handloom of the Ministry of Textiles, Government of India, to educate, train and empower weavers to directly sell their products on the iShippo.com online portal. The partnership allows iShippo.com to engage with weavers in Bagalkot and other clusters in the state of Karnataka. The products will carry government certified ‘India Handloom Brand’ and ‘Handloom Mark’. iShippo.com will ensure the availability of quality products to buyers across the globe. With the support of Ministry of Textiles - Government of India; iShippo.com aims to allow technological enablement of artisans to bridge the digital divide, bring the global market at the doorstep of weavers, help weavers transform into entrepreneurs from daily wagers, initiate capacity building of the artisan community and ensure self-sustainability of clusters. Weavers have witnessed a lot of technological advancement from PowerLooms to Computer Aided Design and Weaving. The recent advancement could dramatically impact weaving community who are already on the fringes of economic prosperity.
The Ministry of Textile understanding these challenges has entrusted companies like iShippo to curate, preserve and promote cultural heritage and livelihood of weavers by promoting the Indian Handloom Brand. These are omnious signs for agile startups in the space like iShippo.com to come in and contribute with their technology, expertise and skills whereby they introduce better - more efficient ways of connecting buyers, sellers, artisans, weavers and the designers community. They provide artisans, craftsmen and weavers an easier access to market, access to capital, capacity building and a more sustainable means of livelihood. They can take an idea convert it into design, produce it and deliver it to the hands of buyers in one seamless transaction, informed Mr. Karma Bhutia - Founder & CEO of iShippo.com
Promotion of marketing of Handloom products through e-commerce is one of the priorities of Ministry of Textile. In order to promote e-marketing of handloom products in a transparent competitive and effective manner Textile Ministry has partnered with iShippo.com. On this occasion Mr.Alok Kumar, Development Commissioner, Handlooms Ministry of Textiles - Government of India said that IndiaHandloom Brand is a major initiative of Government of India to reposition premium and good quality handloom products for the benefit of consumers as well as weavers. They are promoting e-marketing of genuine and authentic handloom products so as to reduce intermediaries and increase the gains both for consumers and the weavers. They are happy on this association with iShippo. Niche and young enterprises are showing good results in this area.
According to Handloom Export Promotion Council, global demand for Indian Handloom is increasing due to which India exported handloom worth US$ 350 million for the FY 2014-15. India has 2.4 million looms with significant production capacity in the country. Indian handloom sector employs 4.3 million handloom weavers. The Handloom Industry is open to innovation and has the ability to adapt to changing requirements. In the past 2 years - spruced by the Make In India campaign, the evolution within the Indian Handloom Industry is visible.
SOURCE: Yarns&Fibers
In a memorandum to Textiles Minister Santosh Gangwar, the Tirupur Exporters Association has sought his assistance in addressing issues hampering the growth of exports including the lack of Free Trade Agreements. The TEA also wants a list of fabric items to be included for import under Export Performance Certificate, without payment of duty so as to get the real benefit of the announcement in the Union Budget 2016 -17 and enhance our competitiveness in the global market. The TEA is particularly interested in a Free Trade Agreement with the European Union. 'Last year, the garment sector totally exported RMG worth $17 billion and out of this, $6.28 billion (36.97 per cent) value of garment was destined to the European Union. It still has the potential to enhance exports in the EU once the level playing field is provided to the sector,” it said in the memorandum. The memorandum once again underlined that India's main competitor, Bangladesh, as a least developed country, is now enjoying the duty free market in European Union and has exported about $15 billion in 2014 -15 to EU market alone, more than double of India's garment exports to the EU.
While Bangladesh's total garment exports $26 billion in 2014-15, TEA said it is confident that India could dent the market share of Bangladesh once Free Trade Agreement is implemented with an additional advantage of being Compliances oriented factories. “Once FTA with EU takes place in the month of September this year, our exports to EU will grow and witness a growth rate of 30 per cent in successive years and double in next three years apart from employment generation of 30 lakh workers. We request the Hon'ble Minister to help to expedite the FTA with EU so that the exports will grow,” it said. The TEA also reiterated its demand for formalising the Comprehensive Economic Partnership Agreement (CEPA) with Canada to reverse to trend of falling exports to that country.
Bangladesh and Cambodia which are entitled to the least developed countries tariff treatment have stolen a march over India while Pakistan and Vietnam also continue to get benefit under General Preference Tariff (GPT). Indian garments have lost competitiveness after imposition of customs duty about 20 per cent. TEA said it is confident that once CEPA is formalised, India could compete with these countries effectively and export will grow by 30 per cent. The TEA also requested Gangwar to expedite the Comprehensive Economic Cooperation Agreement (CECA) with Australia, saying the agreement could boost India's garment exports to Australia by 30 per cent. The CECA was originally scheduled to come into force in June 2015. The Association stressed that after FTAs with EU, CECA with Australia and CEPA with Canada, there will be an increase of 30 per cent exports to these countries from the existing level and at the same time, the exports to the rest of countries will grow by 10 per cent. According to the TEA's projections, India's total garment exports would grown to $33 billion once these FTAs are signed.
SOURCE: Fibre2fashion
The anti-TPP discourse in the US presidential elections is not showing signs of abating. As presidential hopefuls bash the trade deal for the ‘harm’ it might inflict on the US economy, the Obama administration is working hard to stop the Trans-Pacific Partnership (TPP) from sinking. The unfavourable sentiments towards free trade agreements (FTAs) in the current political discourse have forced the US administration to justify the TPP on the most bipartisan compelling ground in the current political climate of the US: an anti-China posture. None other than president Obama himself has taken the lead in rationalising the TPP as a trade deal that would allow the US to exploit economic opportunities in the Asia-Pacific by writing the trade rules for the region. Failure to ratify the TPP, he warns, would allow China to do so. “The world has changed. The rules are changing with it. The United States, not countries like China, should write them. Let’s seize this opportunity, pass the Trans-Pacific Partnership and make sure America isn’t holding the bag, but holding the pen”. (‘President Obama: The TPP would let America, not China, lead the way on global trade’; It is ironical that the TPP—supposedly a 21st century gold standard trade agreement—is ultimately being justified for containing China. During the TPP negotiations, the China containment angle was kept as peripheral as possible. Despite arguing the TPP as symbolising the US’s pivot to the Asia-Pacific, it was not branded by the US administration as brazenly anti-China as now. The shift might have occurred due to the Obama administration’s realisation that China-bashing is perhaps the only way for obtaining bipartisan support for seeing the TPP through.
The anti-China branding of the TPP has several implications. China, which from the beginning of the TPP negotiations had been wary of the TPP, is now convinced about the US’s intention to displace it from the trade rule-writing space in the Asia-Pacific. This might result in China revisiting its strategy towards TPP and trade regionalisation in the Asia-Pacific. During the last couple of years, the Chinese leadership had given enough signals of a positive interest in the TPP. Joining the TPP could have been China’s next big opportunity to carry out large-scale domestic reforms, as it did after joining the WTO in 2000. The positive perception might change with China realising that even if it joins the TPP in the foreseeable future it is unlikely to be in a position to be able to contribute meaningfully to the governance of the agreement as the US would want it to play second fiddle. China might also begin looking firmly at the TPP as a long-term geostrategic alliance of the US and its partners in the Asia-Pacific. With more US strategic partners like Korea and Taiwan slated to join the TPP in the next round, such an impression on part of China is bound to strengthen.
While branding the TPP as an effort to keep China away from trade rule-making in the Asia-Pacific, president Obama also took a dig at the Regional Comprehensive Economic Partnership (RCEP). He marked it as China’s effort to stitch a competing deal in the Asia-Pacific for snatching away ‘some of the fastest-growing markets in the world at our expense, putting American jobs, businesses and goods at risk’. The concern reflects the US unhappiness with the RCEP. The RCEP might be a far less ambitious agreement than the TPP in coverage and the degree of ‘deep’ liberalisation it aims to achieve among domestic policies of members. Nonetheless, for China, it means getting more preferential access than what it currently gets from existing FTAs in some major TPP member markets. These include Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam that are also negotiating the RCEP. American manufacturing exports—whose revival appears uppermost among the concerns prevailing in the current US discourse on trade—might not be able to benefit from the wide-ranging tariff eliminations in TPP in these markets, if the RCEP allows China similar tariff-free access on the same exports.
The US’s branding of the RCEP as a ‘Chinese’ effort creates strategic awkwardness for countries that are part of the RCEP and TPP. Most of current TPP members are strategic allies and partners of the US. Their presence at the RCEP was as it is taken as a channel for allowing the US and TPP influence on the RCEP negotiations. Now, the TPP group within the RCEP might get more prominently marked for serving US interests with its positions considered specifically anti-China. Strategic balancing would also become more delicate for a major RCEP member like India. While not being a member of the TPP, India enjoys strategic proximity to the US. On the other hand, despite outstanding territorial disputes, its engagement with China has expanded manifold with China becoming India’s largest trade partner. At RCEP, India needs to be careful in sending the right signals to China. On the whole, many negotiating positions at the RCEP now might be interpreted more from the geopolitical perspective of denying negotiating partners market access due to pressure from a major non-negotiating actor like the US, rather than on economic grounds.
The anti-China labelling of the TPP is also likely to weaken the efforts of the Asia-Pacific to consolidate into a free trade for the Asia-Pacific (FTAAP). The US and China are now unlikely to work with each other on any trade project that involves space sharing in rule-making. By trying to save the TPP the way it has, the US might have dealt a major blow to trade multilateralisation efforts in the Asia-Pacific.
SOURCE: The Financial Express
Punjab, Haryana and Delhi Chamber of Commerce and Industry (PHDCCI) and Karachi Chamber of Commerce and Industry (KCCI) have agreed to establish a joint council of the two chamber to prepare a list of goods for trade between India and Pakistan and propose ways of improving trade ties. They both agreed in principle for the establishment of the council at a meeting of PHD Chamber of Commerce and Industry (India) and KCCI on Monday. It was also suggested that the council would have 6 members, three each from both chambers. The council will hold its meetings regularly and after an interval of three months. Addressing KCCI members, PHDCCI President Ravi Wig said that it is time for business community of both countries to join hands and make decisions of improving trade relations to meet global challenges. He said that political leaders prepare policies but they have "no right to teach us" how to do business and with whom. "They must co-operate with us and provide facilities and co-operation as well as help in removing trade barriers in doing business." He suggested that India and Pakistan both should allow transit trade facility to each other for trade with nearby countries.
Explaining his point of view, he said that India can utilise Pakistan's soil for trade with Iran and Turkey etc, and likewise Pakistan can trade with Bangladesh, Nepal etc with similar facilities PHDCCI chief also proposed that India and Pakistan, both being Basmati rice producing countries, should join hands in rice trading. He said that both countries should establish a joint rice council which should decide rice export price. This price determination should be on the pattern of oil producing countries. "When they jointly decide oil prices why rice-exporting countries should not have the same facility of deciding their product prices?" he said. He was of the view that both countries should also encourage tourism as this sector creates largest number of job opportunities. He said that a trade dispute resolving committee should be established having members from both countries' trade bodies to examine the dispute jointly and make recommendations for resolving it. Welcoming the guests, Abrar Ahmed, Senior Vice President, KCCI, noted that a ministerial meeting is scheduled to be held soon to discuss issue of importing furnace oil from India, and added that India should also allow Iran-India gas pipeline project. This will help reduce trade balance problem, he added. He said that in an era of globalizat6ion and the emergence of WTO regime, it is also essential that the regional trade be promoted. With the demise of Multi-fiber Arrangement (MFA) from January 1, 2005, it would be in the mutual interest that in textile sector, "we must complement, instead of being competitors with each other." This could be possible through a special strategy, including joint ventures.
Later, speaking at Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Ravi Wig offered to have joint council of PHDCCI and FPCCI but Riaz Ahmed Tata President FPCCI did not make a decision on spot saying that he should put the proposal before FPCCI governing body and make a decision after getting its approval. Tata said that it was a universally accepted phenomenon that political rifts and economic development cannot go together. Free economy would be in the larger interest of economic development of member countries and uplift of poor masses. He said that both Indian and Pakistan trade bodies could use their strong lobby to reconcile the respective governments to keep trade aloof from political rifts between the two countries. He said that in India and Pakistan around 40 percent people are living below poverty line "and we must co-operate with each other" to improve their standard of living. Ravi Wig said that it is only possible with the establishment of industrial units and getting raw material at affordable price.
SOURCE: The Business Recorder
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 49.35 per barrel (bbl) on 09.06.2016. This was higher than the price of US$ 48.91 per bbl on previous publishing day of 08.06.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3287.65 per bbl on 09.06.2016 as compared to Rs. 3263.97 per bbl on 08.06.2016. Rupee closed stronger at Rs 66.63 per US$ on 09.06.2016 as against Rs 66.74 per US$ on 08.06.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 9, 2016 (Previous trading day i.e. 08.06.2016) |
Pricing Fortnight for 16.06.2016 |
|
Crude Oil (Indian Basket) |
($/bbl) |
49.35 (48.91) |
47.52 |
|
(Rs/bbl |
3287.65 (3263.97) |
3186.69 |
|
|
Exchange Rate |
(Rs/$) |
66.63 (66.74) |
67.06 |
SOURCE: PIB
America's South Carolina state has amended a law on revitalizing or reviving sick textile units by enhancing financial incentives available in the South Carolina Textiles Communities Revitalization Act. The “taxpayer-friendly” amendment, cleared on May 23, seeks to remove a 50 percent cap applicable to the income tax credit provided by the Act. The amendment enhances the value of the credit by accelerating the time period for claiming the credit and applies to credits claimed for income tax year 2016, regardless of when the credit was earned. The South Carolina Textiles Communities Revitalization Act provides financial incentives for rehabilitation, renovation, and redevelopment of abandoned textile mill sites in South Carolina. A textile mill site means a textile mill together with the land and other improvements on it which were used directly for textile manufacturing operations or ancillary uses. A textile mill site is considered to be abandoned when at least 80 per cent of the mill has been closed or is non-operational for at least one year. The act provides two credit options: a 25 per cent credit against real property taxes, or a 25 per cent state income tax or corporate license fee credit. The credit is determined based on the rehabilitation expenses incurred to redevelop the textile mill site. Rehabilitation expenses generally include the costs incurred for demolition, environmental remediation, site improvements, and the construction of new buildings, it said.
In order to receive the credit, a taxpayer (business entity) must file a notice of intent to rehabilitate. Expenses incurred before submission of the notice (with the local government in the case of the property tax credit and the Department of Revenue in the case of the income tax credit) are not eligible to avail the tax credit. If a taxpayer seeks to receive the income tax credit, the notice of intent to rehabilitate should be filed before building permits are received. A notice of intent to rehabilitate must include, among other information, an estimate of the rehabilitation expenses. The credit a taxpayer may ultimately receive may be limited or eliminated based on the estimated expenses included in a notice of intent to rehabilitate. Actual expenses which exceed 125 per cent of the estimate are disregarded when determining the amount of the credit. If actual expenses are less than 80 per cent, then no credit is allowed. A taxpayer who seeks to receive a credit against property taxes receives a credit equal to 25 per cent of the rehabilitation expenses incurred. However, expenses exceeding 125 per cent of the estimate included with the notice of intent to rehabilitate are disregarded and a taxpayer must incur expenses that are at least 80 per cent of the estimate in order to receive any credit. The credit for property taxes requires approval of local taxing entities, a public hearing, and specific ordinance approval by a municipality or county. The approval ordinance must provide for the credit to be taken as a credit against no more than 75 per cent of the property taxes otherwise due for up to 8 years. There is no otherwise applicable cap on the property tax credit. - See more at:
SOURCE :Fibre2fashion
The government has not yet appointed new member of National Tariff Commission (NTC) in line with the judgement of the Lahore High Court, resulting in prolonged delay in investigations of all major producers of industrial goods. These goods include chemical sector, iron and steel sector, paper and paper board products, textile industry and ceramic tiles industry.The Ministry of Commerce is sitting over the proposal to appoint one member in the NTC to take effective measures against unfair trade practices of foreign producers. Several domestic producers approached the government with a request to make the NTC functional, however, the bureaucracy and trade advisers indulged in evasive and absurd discussions about appointment of the member in NTC that resulted in making the whole reforms process ineffective and fruitless. Official sources told The News on Sunday that in order to ensure effect related to provision of Article VI of the General Agreement on Tariffs and Trade, 1994, (GATT) and to the Agreement on Implementation thereof, the government of Pakistan consolidated laws relating to imposition of anti-dumping duties in the shape of Anti-Dumping Duties Ordinance, 2000. The aim of anti-dumping laws of Pakistan was to offset dumping, to provide a framework for investigation and determination of dumping by foreign producers and injury caused to the domestic industry of Pakistan in respect of goods imported into Pakistan. Liberalisation of tariffs is a commitment of the World Trade Organisation (WTO) with contracting nations that also includes Pakistan. By the time tariffs are reduced, the phenomena of dumping and subsidisation are increased manifold.
To cope up with the situation, different countries have made their trade remedy laws (i.e., ant-dumping and countervailing and safeguard) more effective. Taking timely and effective measures by the Governments have become inevitable. In order to implement Pakistan’s trade remedy laws more effectively and to remove bottlenecks, in light of the past experience of the National tariff Commission (NTC), this Government decided to introduce reforms in the NTC by revamping all relevant laws. Resultantly, National Tariff Commission Act, 2015 is promulgated in order to remove the issues of quorum and composition of the NTC, in light of the past practice and in line with the judgement of the Superior Courts of Pakistan. Similarly, Anti-Dumping Duties Act, 2015 is promulgated by repealing the old dated Anti-Dumping Duties Ordinance, 2000. By doing so, the Government decided to launch aggressive outreach programme in order to bring awareness in the domestic industry of Pakistan and convey a strong message that the Government is serious about helping domestic industry against unfair trade practices of the world, in general, and of the neighboring countries in particular.
Almost all major producers of industrial goods; including but not limited to chemical sector, iron and steel sector, paper and paper board producers, textile industry and ceramic tiles industry of Pakistan filed applications before NTC against dumped and subsidised imports into Pakistan. NTC started due process to take appropriate measures, where necessary, to counter dumping and subsidization by foreign producers. However, certain importers approached Lahore High Court with and obtained Court’s order dated 15.03.2016, wherein Lahore High Court has observed with concern that the NTC is not properly constituted in terms of Sections 3 and 5 of the NTC Act, 2015 as one of the Members of the NTC does not fulfill the requirements laid down in Section 5 of the Act. Therefore, in order to ensure continuity and functionality of the NTC, the Lahore High Court directed the NTC and the Federal Government to replace one member with another member within a period of thirty days as per the qualifications prescribed in Section 5 of the NTC Act.
SOURCE: The News
Tran Thanh Hai, deputy director general of the Department of Import-Export, under the Ministry of Industry and Trade (MoIT), speaks about certificates of origin.
How many Vietnamese enterprises are allowed to issue their own certificates of origin?
The rule on certificates of origin (C/O) is very important in free trade agreements (FTA). They help enterprises enjoy the best treatment for their tax commitments. Imported tax, challenges facing Vietnamese enterprises, Vietnam economy, Vietnamnet bridge, English news about Vietnam, Vietnam news, news about Vietnam, English news, Vietnamnet news, latest news on Vietnam, Vietnam Only by abiding by C/O rules can manufacturers and importers get a C/O. When an enterprise has been granted a C/O for their goods, the imported tax levied on their goods will become zero. This rule is applied to all countries in the same free trade agreement. In certain cases, enterprises can issue their own certificates of origin. To obtain this right the enterprises must satisfy certain criteria set by the government. The scheme is still in the pilot period and so far only one enterprise has been granted the right to issue its own C/Os. Some enterprises have recently applied to the Ministry of Industry and Trade to ask for the rights to issue C/Os for their goods to other ASEAN countries.
What are the challenges facing Vietnamese enterprises in acquiring C/Os of their goods?
A C/O is a form of technical barrier if the enterprises don’t know what procedures they have to complete. They must know C/O requirements in each trade agreement. All this is available online, particularly Circular 28/2015/TT-BCT. But, to my understanding, the most challenging requirement for most Vietnamese enterprises is achieving US$10 million in their export turnover the previous year.
Will you please further elaborate on the C/O requirements in new generation FTAs, including the Trans-Pacific-Partnership (TPP)?
The C/O principle in old FTAs is rather reflexive compared with new FTA agreements, including the TPP. That’s why the MoIT should hold regular training courses for Vietnamese enterprises to update them with changes in international trade, particularly in new FTAs. However, there is a big difference between FTAs and the TPP regarding which agency will issue the C/O. Under the TPP, the importing country will grant the C/Os, not the exporting enterprises as regulated in other FTAs.
SOURCE: The Vietnam News
Trần Quốc Khánh, the Deputy Minister of Industry and Trade, spoke to Thời báo Kinh tế Việt Nam (Viêt Nam Economic Times) about what Vietnamese exporters should do to secure a firm foothold in foreign markets.
Some people have expressed worry that our non-tariff barriers to trade are not strong enough to help Vietnamese goods compete against foreign made goods in our domestic market. How do you respond to this complaint?
All Vietnamese enterprises want strong non-tariff barriers to trade in the competition with the influx of foreign made goods in our territory. But that is not a good approach. We accept decreasing tariff barriers to allow fair competition with foreign commodities. We don’t have any intention to introduce preventive measures to limit the flow of foreign commodities into our country. This is a philosophy of Free Trade Agreements (FTAs). As a signatory to several FTAs, we have committed to not introducing any trade barriers to limit the flow of foreign made products into our country. But under the FTAs, all countries have the right to introduce measures to protect their consumers’ health, animal welfare, plants and the environment. Under the FTAs, all countries are allowed to adopt their own measures to protect the environment, ensure healthy competition and fairness, such as anti-dumping measures, preventive measures and anti-subsidization policy. Such measures have already been applied by our government. Preventive measures have become the biggest worry of Vietnamese exporting firms. The European market has adopted very strong non-tariff barriers to trade (NTBs). Do you have any suggestions for Vietnamese exporters?
Psychologically speaking, most Vietnamese exporters think NTBs are measures to prevent the influx of foreign goods into their countries. In reality, many of the NTBs introduced by importing countries are aimed towards information disclosure, transparency and fairness. These rules apply to both exporting and importing firms. In the Việt Nam - EU FTA, if EU importers adopt NTBs towards Vietnamese exported goods - to protect consumer health, animal welfare and the environment - there is no reason for Việt Nam firms to reject their demands.
What do you think about the NTBs the European Union has introduced?
All NTBs introduced by the EU are geared towards the goal of protecting consumer health. These NTBs are good for consumers, both inside and outside Việt Nam. So such quality standards should be upheld. Vietnamese exporters should carefully study technical requirements of each foreign importer, be they in the EU, the US, Japan, or elsewhere. If Vietnamese exporters are well prepared in advance, they will be in a good position to be successful exporters.
In your opinion, what should Vietnamese enterprises do to confront the NTBs imposed by importers from major markets?
The Ministry of Industry and Trade recommends that any enterprise wanting to do business with big markets - like the EU, the US, Japan and others - should create a special task force in their enterprise to study technical requirements from importing countries. Such information is already contained in the FTAs Việt Nam has signed with them. Only when we understand technical requirements from importing countries, will we be able to enter the markets and become their sustainable clients.
SOURCE: The Vietnam News
Zim Trade, the national trade development and export promotion organization, is leading a delegation of clothing, textiles and leather companies at the largest trade exhibition, Source Africa being held at Cape Town, South Africa. It was important for Zimbabwe to participate in the conference in order to register its presence on the global market, said Head of delegation, who is also ZimTrade’s operations director Allan Majuru. Zimbabwe is lagging behind in the apparels sector due to constraints faced in the sector particularly from the early 2000s. Participating in such exhibitions would show that Zimbabwe is still a potential source of good quality clothing, textiles and leather products. When Zimbabwe started coming to Source Africa four years ago, a lot of players were surprised that the industry was still surviving and even now people are still surprised that there is a thriving clothing sector in Zimbabwe. They are at Source Africa to correct the negative perception.
According to ZITMA chairman Admire Masenda, the exhibition was a chance to market, promote and grow confidence of the Zimbabwean products. By consistently coming to the expo, they are giving buyers confidence about the Zimbabwean industry. It also allows sector players to realign their products to global trends. They get a chance to produce what the market wants. Mr Masenda said that this would help boost exports at a time when the recovery of the economy is hinged on export-led growth. Zimbabwe’s exports of clothing to South Africa have been on an upward trend, having increased by 45.8 percent from 2012 to 2014. Zimbabwean clothing articles enjoy preferential treatment into South Africa under the Zimbabwe-South Africa Bilateral Trade Agreement. Some of the companies exhibiting at Source Africa include Bravette Manufacturing (Truworths), Throttle Clothing, Main Protective Clothing and Samuneti Leathers. There are also representatives from Zimbabwe Clothing Manufacturers Association (ZCMA) and Zimbabwe Textiles Manufacturers Association (ZITMA).
SOURCE: Yarns&Fibers
