Non-tariff barriers (NTBs) are trade barriers that restrict imports to protect and maintain domestic production and consumers as well. Vietnamese exporters always face NTBs when they export to big markets like the US, Japan and South Korea. Vietnam is seeing its difficulties and limitations in coping with NTBs to three key exports: apparels to the US, footwear to the EU and seafood to Japan. According to US market specialists working at the General Department of Vietnam Customs, Vietnamese firms usually face with the following technical standard systems when they sell their products to these markets. Quality standards: The quality of apparel and textile products is represented by the standard system that a company has achieved. ISO-9000 is an example. This certification is the condition for penetrating and expanding the market. This proves that the company has a fully international quality management system. For some markets, this certification is required for export. Fire protection standard: Garment and textile companies also have to meet health and safety requirements for consumers like flame retardancy standards. Health safety for consumer is always of a top concern of consumer protection associations and the US government. They introduce very high standards and regulations on garment and textile raw materials to protect consumers and force manufacturers and exporters to invest in modern, advanced production technologies to be certified. This is really a big hurdle for manufacturers and exporters in developing countries, including Vietnam, because they lack capital and modern technologies. Environmental protection standards: Textiles and apparels exported to the US are required to meet the ecological standard, health safety for users, and pollution-free production. In addition to the above technical standard systems, the social accountability system (SA-8000) is the biggest obstacle for apparel and textile exporters in Vietnam because they lack knowledge and information of this standard. They either do not want to disclose financial records, especially if they are private businesses, or cannot afford to pay SA-8000 expenses, particularly at the current time of economic slowdown. Besides, there are cultural differences between customers and suppliers. Besides technical standard system and social accountability system, the Worldwide Responsible Apparel Production (WRAP) is also a tough challenge for Vietnamese firms. In exporting apparels and textiles to the US, they are often entangled with social responsibility (SA-8000) and WRAP. Both standards have fundamental rules on child labour, forced labour, health and safety, freedom to formulate collective bargaining, discrimination, disciplinary forms, working hours and payrolls. Such stringent technical barriers are obviously enormous challenges for Vietnamese businesses. Moreover, their heavy reliance on foreign inputs results in low production efficiency. Vietnam mainly imports garment materials from China (24 percent), South Korea (23 percent) and Japan (8.89 percent). To overcome NTBs, Vietnamese companies must focus on building and completing SA-8000 standards, hygiene and safety standards and environmental protection standards in accordance with international regulations. Furthermore, they also need to expand markets, diversify product categories and designs, enhance product quality, and especially increase the localisation rate of garment and textile products. Hien Thinh
Posted on: Thu, 17 Jul 2014 11:24:59 +0000
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