For example, enterprises often have export orders to markets such as Korea and Japan, can take advantage of and enjoy preferential tariffs under the ASEAN – Korea or ASEAN – Japan FTA, but for other FTAs such as CPTPP or EVFTA, these enterprises do not benefit because most of the input materials are imported from China, Taiwan, Korea… or economies that are not members of the agreement, so cumulative rules for preferential tariffs will not be applied.

Therefore, for each FTA, if enterprises master adequate information, master the technology, master the value of the supply chain and value of their products, FTA will be favorable and considered as a profit-making opportunity for enterprises.

This mechanism is not only parallel in EVFTA but also in the CPTPP, at present, the mechanism of self-certification of origin in ASEAN is being piloted.

For the textile and apparel sector, it should be noted that a recently mentioned concept of “anti-avoidance tax”. This is a new tax arising from the US – China trade war due to the US imposing imports into the US for economies similar to China. Vietnam currently does not have an FTA with the US, while 42% of Vietnam’s total textile and apparel exports to the US (August 2019 – VITAS data). In essence, this tax is closely related to the origin of goods and the materials used to create such goods, so textile and apparel enterprises need to pay special attention to the Rules of Origin and this tax.

I agree with this point of view. Firstly, EVFTA is more favorable than the CPTPP in terms of the third party cumulation. Specifically, it is allowed for an economy to have FTA with Vietnam and EU at the same time, Vietnam can combine the input materials from this economy when exporting to the EU to enjoy preferential treatment under EVFTA. For example, Korea and Singapore are two economies that have FTA with Vietnam (ASEAN) and FTA with EU, Vietnam can combine fabric originating from these two countries, when exporting to the EU, they will enjoy preferential treatment under EVFTA, although Singapore and South Korea are not members of EVFTA. This is at least an advantage compared to the CPTPP, because the CPTPP does not allow cumulation from any non-member countries. However, the combined reality from these two countries is very limited due to the low content of imported raw materials from Singapore and Korea.

Secondly, the rules of origin from fabric onwards are more flexible in EVFTA, compared to CPTPP from yarn onwards. According to the CPTPP, from yarn production, the stage from producing yarn to rough fabric to have finished fabrics to have finished garments must take place within the scope of the agreement, this is a difficult stage and currently there is no Members of the Agreement can perform well, so one or more third parties need to process/ produce one/ several stages in the chain and do not enjoy preferential treatment from CPTPP due to this economy/ country that are not party to the agreement. At this point, the rule of origin from fabric onwards is a flexible point in EVFTA compared to CPTPP.

Post-inspection is a global trend and Vietnam does not go beyond this trend. Post-inspection helps to shorten the time for customs clearance, and post-clearance inspections can range from five to 10 years.

Self-certification of origin is essentially allowing manufacturers, exporters, and importers to themselves declare goods being owned and take responsibility for the origin of goods instead of third party (Ministry of Industry and Trade, VCCI and authorized by the Ministry of Industry and Trade). Many large enterprises have radical views that manufacturers must understand their processes, origins and products better than any third party, so self-certification of origin is a inevitable trend.

Enterprises need to continuously update information through training courses on FTA regulations, consult with professional consultants to be able to perform self-certification of origin, so that they can be more proactive, save time, manpower and logistics costs.

In fact, most enterprises self-certify origin as big ones, the rest are small enterprises because they do not have enough information and manpower to carry out certification of origin, they need a third party. This helps enterprises to perform quickly and accurately procedures but does not create motivation for enterprises to reform the company. So self-certify origin is easy or difficult which depends on the thinking and resources of the enterprise itself.

This mechanism is not only parallel in Vietnam – EU but also in the CPTPP, currently piloting the mechanism of self-certification of origin in ASEAN.

As mentioned above, currently only large enterprises in Vietnam are able to perform self-certification of origin, but 95% of Vietnamese enterprises are small and medium-sized enterprises, so the abolition of the mechanism of grant completely C/O still needs a short time to implement, until the enterprises are able to perform the certification of origin.

According to most of assessments from experts and the press, the weakness of textile and apparel enterprises is that they cannot take initiative in input materials, because they have to import from foreign countries, not being members of FTA, they will not enjoy preferential tariffs. From a personal perspective, I think it also lies at the integrity of supply chain connectivity in the sector.

For example, a textile and apparel integrated industrial park, a set of comprehensive suppliers in the industry, being capable of working from the first production stage to the end, it will become a model for rapid and efficient production. Good linkage will help us to have good supply in the chain without having to depend too much on imports from abroad, enterprises have enough information and peace of mind to invest and develop.

The textile and apparel sector needs to expand the supply chain model in the sector, helping enterprises find a suitable and fast supply source. The Government can support by offering preferential policies, leading the call for gathering of textile enterprises currently scattered in many localities to focus on one area, since it can reduce the dependence on the supply from the outside, the immediate advantage of logistics and long-term development can promote the sector.