Looking at strengthening American exports, US has proposed that the countries joining its New Pacific trade zone forego imports from China. The development has, in a first, garnered resistance from Vietnamese businesses and officials who cite that such a requirement will disrupt global supply chains. In effect, this would imply that Vietnam, a major apparel exporter, reduce its reliance on textiles made in China, which isn’t part of the trade pact, to get preferential market access to the US. “Vietnam would simply have to shift its sourcing of yarns and fabrics from China to the US and Mexico,” advised Eliza Levy, a spokeswoman for the National Council of Textile Organizations. The proposal has been met with opposition from the fashion brands as well since the supply chain rework will cause unprecedented price rises.
Meanwhile, Vietnam is also working quickly to develop an indigenous backward linkage, which would help get around the restrictions. “Vietnam is seeking to reduce its reliance on imports from China for its apparel industry to better benefit from TPP,” said Phan Chi Dung, a senior official with Vietnam’s Ministry of Industry and Trade. However, he sees little chance of US producers filling the void.
