The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to pose challenges for Vietnam. The garment and textile sector may suffer the most from goods origin regulations under the CPTPP. Vietnam has to import around 80 per cent of its materials for production. The heavy demand on imported material has become a serious problem for the industry.

Currently, Vietnam has to import up to 99 per cent of its cotton requirements, 70 per cent of fiber requirements and 80 per cent of fabric requirements. The biggest shortcoming is that only 10 per cent fabric is imported from Japan and countries that are part of the CPTPP. The biggest bottleneck is that Vietnam has been unable to produce fabrics for export.

Vietnam is the third biggest exporter of garments and textiles in the world following China and India. The country has an abundant labor force. To take advantage of the opportunities from the CPTPP, Vietnamese firms need to gain a deeper understanding of the sector, their advantages and markets in the CPTPP. In order to solve the bottleneck, policies need to be developed for the next ten to 15 years to take advantage of this agreement.