Quang Nam enterprises on the threshold of TPP agreement

By QRT |

(QNO) - The negotiations of a Trans-Pacific Partnership (TPP) agreement were completed on October 5th, 2015. It is forecast that many fields of Vietnam’s economy will be strongly impacted by TPP. Although most of Quang Nam’s enterprises are small and medium-sized, the enterprise community has prepared to grasp chances and face difficulties from TPP.

In recent years, Tuan Dat enterprise has extended its production. It is considered a profit-making enterprise in Quang Nam garment industry with an annual revenue of 500 billion VND. However, Tuan Dat is prioritizing to limit outwork, increase  buying materials and selling finished- product. This model occupies 80%  of the total of enterprise’s production. The enterprise’ s target is to carry out this model with 100% products. This strategy has been done since the first round of TPP negotiations.  

In 2014, the considerable growth of the textile, clothing and footwear industries with the export turnover of nearly 38 billion USD became two among Vietnam’s main export sectors. This growth has speeded up sustainable development, created jobs for more than 4 million labourers, ensured social security, transformed agricultural and forestry economic structure in many places…

Although some  contracts of the year 2015 has not been fulfilled yet, many enterprises in Quang Nam province have received new order forms for the year 2016. It shows  the economic recovery, especially the prosperity of the garment industry when the TPP negotiations have just been finished.

However, the textile - clothing and footwear industries will face many challenges in coming time when Vietnam takes part in and realize a series of free trade agreements such as TPP, EVFTA (Europe-Vietnam free trade agreement). Vietnam’s and Quang Nam’s small and medium-sized enterprises will compete imbalancedly to get markets with multi-national corporations which have financial potentials, modern technology. In addition, linguistic and cultural barriers, capacity of adaption or controlment of changes are other challenges. These are the “variables” that decide enterprises’ success or failure.