MINISTRY OF EDUCATION AND TRAINING MINISTRY OF INDUSTRY AND TRADE VIETNAM INSTITUTE FOR TRADE PHAM THI LUA TECHNICAL BARRIERS TO EXPORTING GARMENT AND TEXTILE AND SOLUTIONS OF VIETNAM Major: Trade Code: 62.34.10.01 SUMMARY OF DOCTORAL DISSERTATION IN ECONOMICS Hanoi - 2014 THE DISSERTATION IS COMPLETED AT THE VIETNAM INSTITUTE FOR TRADE - MINISTRY OF INDUSTRY AND TRADE Research supervisor: 1. Dr. Nguyen Thi Nhieu Vietnam Institute for Trade 2. Dr. Pham Thu Giang Ministry of Industry and Trade This Dissertation will be presented to the Board of Examiners at Insititute level At the Vietnam Institute for Trade - Ministry of Industry and Trade Address: 46 Ngo Quyen, Hanoi At , , 2014 The dissertation can be found at: 1. National Library of Vietnam 2. Library of the Vietnam Institute for Trade 1 INTRODUCTION 1. Reason to choose the topic: During the national innovation, along with other economic sectors, the garment and textile industry has made significant contribution to the economic growth, creating jobs, increasing incomes for a large proportion of workers. In the context of the current deep globalization, trade liberalization trend has increasingly developed and as an objective result, the trade protectionism has also increasing developed. The system of technical barriers is considered the best and popular measure to prevent imports, protect domestic production, the consumers as well as the national interests. Types of technical barriers to trade in general and to the garment and textile in particular applied by countries have continually increased at a more sophisticated basis. The diversity and complexity of such technical barriers and their increasing use in big garment and textile importing markets have posed great challenges for the garment and textile exporting countries in general and for Vietnam in particular. With the increase in use of technical barriers by importing markets and limited capacity to overcome the technical barriers of Vietnam at a macro-level and at enterprise level, which may have great impact on implementation of garment and textile development in the future, it is required to carry out a deep study on the technical barrier system of the importing markets of Vietnam’s garment and textile. This is the reason why I decided to do my doctoral dissertation on “Technical barriers to exporting garment and textile and solutions of Vietnam”. This study will focus on technical barriers of importing countries and capacity to overcome such technical barriers of the Vietnam’s garment and textile in order to provide a scientific foundation for negotiating, expanding the market access of the garment and textile products and recommend appropriate measures to overcome such technical barriers in order to promote the export of garment and textile, contributing to fulfilling the import and export strategic objective and development strategy until 2020. 2 2. Study objectives and tasks Study objectives: To clarity the scientific basis (both theoretical and practical) to recommend measures to overcome the technical barriers of importing countries, promote the export of garment and textile in Vietnam. Study tasks: In order to fulfill the study objectives, my dissertation will mainly focus on the following tasks: Firstly, clarify theoretical issues concerning technical barriers and overcoming technical barriers to export of garment and textile. Secondly, study experience of some countries in the world in overcoming technical barriers to the garment and textile and draw lessons for Vietnam. Thirdly, analyze and assess the export status of Vietnam’s garment and textile in recent years. Fourthly, analyze the system of technical barriers of some major markets of the exporting garment and textile and impact of the technical barriers on the Vietnam’s garment and textile; analyze the status of overcoming technical barriers of Vietnam during past time; assess its achievements as well as shortcomings and their causes. Fifthly, study and analyze the context as well as prospect of export of garment and textile in Vietnam until 2020, accordingly propose orientation and measures at both macro and micro levels to enhance the capacity to overcome the technical barriers and promote the export of garment and textile in Vietnam. 3. Study subjects and scope Study subject: My dissertation will focus on studying the technical barriers to the exporting garment and textile. Study scope: My dissertation will focus on studying the technical barriers to the garment and textile imposed by importing countries, as well as policies and measures applied by Vietnam to overcome such technical barriers, accordingly recommend measures to enhance the capacity to overcome such technical barriers, promote the export of garment and textile 3 in Vietnam. Regarding space: my dissertation will focus on 3 major importing markets of Vietnam which are United States of America, EU and Japan; studying the capacity to overcome the technical barriers of Vietnam’s garment and textile at national level on both macro and micro basis (State and Enterprise). Duration: study the technical barrier overcoming during 2007-2013 and recommend measures until 2020. 4. Study method General methodology: My dissertation is made based on methodology of the Marxism-Leninism in combination with viewpoints, guidelines and policies on socio-economic development of the Communist Party and the Government as well. Specialized methods: study secondary documents; make statistics and comparison; ask for ideas of experts as well as enterprises; carry out sociological surveys, gather, analyze and evaluate the findings. 5. New contributions of the Dissertation: Firstly, the dissertation has a new approach, studies the technical barriers in an active manner; considers the technical barriers as appropriate and scientific regulations and standards, binding countries, importers and exporters to comply on both macro and micro basis (the State and Enterprise). Secondly, the dissertation has systemized and clarified some theoretical issues relating to the technical barriers to exporting garment and textile, explained the definition of technical barrier and presented its author’s viewpoint about classification of major technical barriers to the exporting garment and textile; recommend measures to overcome the technical barriers in a positive manner; analyze factors impacting the capacity to overcome the technical barriers of garment and textile exporting countries. Thirdly, my dissertation has studied the experience in overcoming technical barriers to the exporting garment and textile of some countries including China, India and Thailand on both State and enterprise levels in order to draw lessons for Vietnamese Government as well as garment and textile enterprises. Fourthly, my dissertation has evaluated the real use of technical barriers of the major importing countries and their impacts on export of 4 garment and textile of Vietnam. The dissertation has also analyzed and evaluated the capacity to satisfy as well as measures to overcome the technical barriers to the exporting garment and textile of the Vietnamese government as well as enterprises. Fifthly, the dissertation has recommended 4 viewpoints; orientations to overcome the technical barriers which should be applied by the Government as well as the enterprises. The dissertation has also recommended general methods to overcome the technical barriers to the exporting garment and textile of Vietnam until 2020. 6. Dissertation structure In addition to the Introduction, Study Overview, Conclusion, References and Appendix, my dissertation is divided into 3 chapters as following: Chapter 1. Theoretical basis of technical barriers and overcoming technical barriers to export of garment and textile. Chapter 2. Status of technical barriers to the exporting garment and textile of Vietnam and measures to overcome such barriers. Chapter 3. Viewpoints, orientations and measures to overcome the technical barriers to promote export of garment and textile until 2020. STUDY OVERVIEW In the current context of deep globalization of the international economy and increasingly developed science and technology, the technical barriers in general and technical barriers to trade in particular have increasingly diversified. The technical barrier to trade is one of the big issues of the current international trade. It has been put in many studies at both national and international levels. The World Trade Organization (WTO) has an Agreement on Technical Barriers to Trade - TBT, Agreement on sanitary and phytosanitary measures - SPS in order to prevent countries from taking advantage of SPS technical standards and regulations for trade protection, preventing free trade; bilateral Free Trade Agreements (FTAs) and Regional Trade Agreement (RTAs) contain 5 regulations on TBT and SPS, etc. in order to facilitate the trade. All members of WTO and FTAs as well as RTAs have their TBT and SPS offices to monitor, supervise and coordinate the TBT and SPS implementation, etc. By now, there have been many national and international studies on technical barriers to trade. However, as far as I know, until now, there has no study providing a systematic and full research on the technical barriers and measures to overcome such technical barriers to the garment and textile of Vietnam. The previous studies mainly focus on studying the technical barriers to exports of Vietnam in general or non-tariff barriers to a certain commodity without a deep analysis of technical barriers to one certain industry. The measures recommended by such studies are mainly for orientation which can be used for all commodities. Some studies have studied the technical barriers but the information provided by such studies is not sufficient and comprehensive, and especially such studies do not reflect and update the latest developments of the technical barriers - a field with regular appearance of new issues. STUDY CONTENT AND FINDINGS CHAPTER 1 THEORETICAL BASIS ON TECHNICAL BARRIERS AND OVERCOMING TECHNICAL BARRIERS TO EXPORT OF GARMENT AND TEXTILE 1.1. DEFINITION, CLASSIFICATION AND IMPACT OF TECHNICAL BARRIERS ON INTERNATIONAL TRADE. 1.1.1. Definition of technical barriers Although there are many definitions of technical barriers, in my opinion, technical barriers can be defined as following: Technical barriers to international trade are technical rules, standards and measures used by the importing country to prevent goods and services of foreign countries from meeting the requirements to enter the markets of importing country. 6 1.1.2. Classification of technical barriers Currently there are many ways to classify the technical barriers to trade. However, to fulfill the study objectives, establish the scientific foundation for recommending macro and micro measures to overcome the technical barriers to the exporting garment and textile of Vietnam, I will combines the classifications of both the Ministry of Industry and Trade and the enterprises with a highlight on regulations on origin of the using countries as a new technical barrier. Accordingly, the technical barriers to international trade can be classified into 6 categories, including: Regulations and standards on product quality; Regulations and standards on safety of consumers; Regulations and standards on environment; Regulations and standards on social responsibility; Regulations and standards on product labeling; Regulations on on product origin. This classification will be used throughout my study. 1.1.3. Impact of technical barriers on international trade Due to their diversity and flexibility, the technical barriers have a great impact scope. Most trade activities in the world have to face technical barriers. The reality shows that the technical barriers have impact on both importing countries and exporting countries on both positive and negative manners, on both importers and exporters. 1.2. TECHNICAL BARIERS TO THE EXPORTING GARMENT AND TEXTILE 1.2.1. Definition of technical barriers to the exporting garment and textile 1.2.1.1. Definition Technical barriers to the exporting garment and textile are technical rules, standards and measures used by the importing country to prevent garment and textile of exporting countries from meeting the requirements to enter the markets of the importing country. 1.2.1.2. Types of technical barriers to the garment and textile For exporting garment and textile, the technical barriers are also classified as technical barriers to exports in general in 1.1.2. They are: (i) regulations, standards and measures on: product quality, human safety and health, environment; social responsibility; garment and textile labeling; garment and textile origin. This classification has been used throughout my study. 7 1.2.2. Overcoming technical barriers to the exporting garment and textile 1.2.2.1. Definition Overcoming the technical barriers to exporting garment and textile is the implementation of strategies, measures to prevent, and event eliminate trade preventers caused by the technical barriers, bringing the garment and textile from the exporting countries to be used in the importing countries. Or in other words, overcoming the technical barriers to exporting garment and textile is the capacity and ability of the exporting countries (including garment and textile enterprises and exporting garment and textile) to meet and comply with the technical regulations and standards imposed by the importing countries on their importing garment and textile. 1.2.2.2. Measures to overcome the technical barriers to exporting garment and textile In this dissertation, I have approached the measures to overcome the technical barriers to exporting garment and textile in a positive and active manner, respecting interests of partners and complying with international commitments to protect their own interests. Overcoming the technical barriers to exporting garment and textile required an effort of the whole society which includes not only the enterprises, but also the Government and domestic and international civil social organizations. In which, main responsibility and cooperation of relevant parties to overcome the technical barriers can be carried in the following methods: Enterprise is the direct subject to overcome the technical barriers, meeting the technical requirements of the importing markets. The Government create favorable environment, instruct and support the enterprises to overcome the technical barriers. Association is bridge connecting the Government and enterprises so that they can work together to overcome the technical barriers to the exporting garment and textile. Cooperation between the Government and the enterprise community is form an integral part to overcome the technical barriers imposed by the importing markets. In addition, it is required to make use of international 8 cooperation and support to overcome the technical barriers imposed by the importing countries. 1.2.3. Factor impacting the capacity to overcome the technical barriers to exporting garment and textile of one country Overcoming the technical barriers to exporting garment and textile of one country depends on several factors which can be classified into two main groups: domestic and international factors. The international factors include: globalization and international economic integration; development of science and technology in the world; globalization and coordination of trans-government and global policies for a sustainable development. The domestic factors are: the national development and IT level; management capacity of the Government; capacity of the enterprises; cooperation among the Government - Enterpriese - Association, international connection and cooperation. 1.3. EXPERIENCE OF SOME COUNTRIES ON OVERCOMING THE TECHNICAL BARRIERS TO EXPORTING GARMENT AND TEXTILE AND LESSONS FOR VIETNAM. 1.3.1. Experience of some countries in the world 1.3.1.1. Experience of China - Measures to overcome the technical barriers approved by the Chinese Government are: enhance exchanges and negotiations among countries to reduce the technical barriers; establish the information collection and processing mechanism in the quickest way; enhance the macro regulations, standardize and develop the industry in a healthy manner; promote the international standards; propose many technical regulations and standards matching the international market; establish a special organization and carry out a serious research on TBT agreements; enhance training of human force. - Measures to overcome the technical barriers of the garment and textile enterprises in China include: improve quality and structure of products for exporting; build trademarks of China; training technical human force; comply with laws, reliable business regulations and management methods. [...]... Vietnam should not retaliate upon importing countries Secondly, Vietnam should not apply too fast development policy to exporters garment and textile CHAPTER 2 STATUS OF TECHNICAL BARRIERS TO THE EXORTING GARMENT AND TEXTILE OF VIETNAM AND MEASURES TO OVERCOME SUCH TECHNICAL BARRIERS 2 1 OVERVIEW ON CURRENT EXPORT OF GARMENT AND TEXTILE IN VIETNAM 2.1.1 Status of export of garment and textile in Vietnam... markets: The Vietnam’s garment and textile have been exported to 54 markets in the world and Vietnam is currently ranked on the top 5 exporters in the world, the second biggest exporter to US, the third biggest exporter to Japan and the ninth biggest exporter to EU 2.1.2 General assessment of status of Vietnam’s export of garment and textile during past time In recent years, the Vietnam’s garment and... and textile in Vietnam; indirectly causing difficulties for the labor force in Vietnam; restructuring the garment and textile supply chain under the impact of the technical barriers from the major importing markets 2.3 STATUS OF OVERCOMING THE TECHNICAL BARRIERS TO VIETNAM’S GARMENT AND TEXTILE DURING PAST TIME 2.3.1 Application of measures to overcome the technical barriers to Vietnam’s exporting garment... advantaged garment and textile of Vietnam 2.3.2 Evaluation of measures to overcome technical barriers to Vietnam’s exporters garment and textile during past time 2.3.2.1 Achievements: The figures on turnover from Vietnam’s export of garment and textile to other markers have shown a continuous effort of the enterprises in satisfying the technical barriers - Awareness of Vietnam’s enterprises of the technical... regulations of WTO on the garment and textile, each country may add its own regulations which can be stricter than WTO’s regulations 12 2.2.2 Assessment of impacts of the technical barriers imposed by major importing markets on the Vietnam’s garment and textile The technical bariers imposed by the importing markets have a great impact on the Vietnam’s garment and textile in both positive and negative... foreign countries, but in reality, the Vietnam garment and textile association has not fulfilled its tasks yet Thirdly, the shortcomings are also caused by the garment and textile enterprises in Vietnam: Many enterprises have no access to regulations and standards of the importing countries Measures to deal with the technical barriers applied by the enterprises in Vietnam are mainly to respond rather than... will become more and more complicated and become new barriers 3.2 VIEWPOINTS AND ORIENTATIONS TO OVERCOME THE TECHNICAL BARRIERS TO THE VIETNAM’S EXPORTING GARMENT AND TEXTILE ULTIL 2020 3.2.1 Prospects for export of garment and textile in Vietnam until 2020 The Vietnam’s garment and textile development strategy until 2015, with a vision to 2020 requires big adjustments to match the real situation and... specifications; improving the participation of Vietnam’s garment and textile in the global garment and textile value chain, attract more and more FDI from multinational/trans-national companies in the garment and textile industry in Vietnam, especially in weaving and dyeing fields; build ang implement strategies to improve the competative capacity of Vietnam’s exporting garment and textile - Orientations... VIETNAM’S EXPORTING GARMENT AND TEXTILE 3.3.1 General measures To overcome the technical barriers to exporting garment and textile, it is required to promote strong changes in thinking, awareness of both the Vietnamese Government and enterprises This is the most fundamental and important requirement and solution as well to ensure the capability to access to the US, EU and Japan markets of the Vietnamese... developed countries which has prevented the Vietnam’s export of garment and textile and Vietnam’s weak capacity to overcome such technical barriers while making continual efforts to promote its export of garment and textile to such markets, I have decided to do my dissertation on “Technical barriers to the exporting garment and textile and solutions of Vietnam” in order to study, clarify the theoretical . OF VIETNAM AND MEASURES TO OVERCOME SUCH TECHNICAL BARRIERS 2. 1. OVERVIEW ON CURRENT EXPORT OF GARMENT AND TEXTILE IN VIETNAM. 2.1.1. Status of export of garment and textile in Vietnam For. Vietnam. 2.3.2. Evaluation of measures to overcome technical barriers to Vietnam’s exporters garment and textile during past time. 2.3.2.1 Achievements: The figures on turnover from Vietnam’s. TECHNICAL BARRIERS TO THE VIETNAM’S EXPORTING GARMENT AND TEXTILE ULTIL 2020 3.2.1. Prospects for export of garment and textile in Vietnam until 2020 The Vietnam’s garment and textile development