The Vietnam Textile and Apparel Association (Vinatas) at the working session with the US Cotton Association urged the US cotton manufacturers to think about a plan to set up a cotton bonded warehouse in Vietnam, as it would benefit the Vietnamese textile industry by way of cut transport and protection costs.
US cotton has been favored by Vietnamese textile enterprises and used in a large scale.
Truong Van Cam, deputy chair and secretary general of Vinatas explaining the proposal said that the cotton price always fluctuates, while Vietnamese spinning enterprises have to import cotton from many different sources, including those that cannot provide high-quality products.
Therefore, if the US partners agree to set up a bonded warehouse in Vietnam, Vietnamese enterprises would take initiative in arranging materials for their production, while cotton prices would be stable, which helps textile manufacturers control production costs.
Also according to Cam, Vietnamese enterprises prefer using US cotton not only because the cotton has high quality, but also because US is a member of TPP.
If Vietnam uses cotton from the US, it will be able to satisfy the requirements to enjoy preferential tariffs offered to TPP members.
The bonded warehouse is also believed to bring benefits to the US. If the US can ensure the stable supply of cotton, it will be able to sell more products to Vietnamese businesses thanks to the warehouse. In fact, not only cotton traders, but US cotton growers will also benefit.
Pham Xuan Hong, deputy chair of Vinatas, said that US cotton products were more expensive than products from other sources, which was confirmed by the US manufacturers.
However, the products would have reasonable prices when they are sold to TPP member countries thanks to the preferential tariff.
Vietnamese enterprises have been importing materials for domestic textile and garment production from China because of geographical proximity and cheap prices. Meanwhile, other TPP countries can only provide cotton in limited quantity.
According to Vu Duc Giang, chair of Vinatas, if bonded warehouses were set up, the major problems of the Vietnamese textile and garment industry would be settled. The bonded warehouses would be built in two large areas in Vietnam, including one in the north, maybe at the Hai Phong Port or Hanoi, and the other at Cat Lai Port in HCMC or in Ba Ria- Vung Tau City.
A bonded warehouse in Vietnam would be highly significant, especially when Vietnam tries to escape reliance on Chinese imports.