ASEAN: Regional Trends in Economic Integration, Export ... - USITC

a greater variety, but fewer garments, in various styles and colors. Key factors affecting
costs and delivery include wage rates, productivity, and infrastructure and other logistics
affecting access to raw materials, as well as shipping the finished products. U.S. retailers
attribute Vietnam’s rise to a global supplier of cotton woven apparel to its high
production efficiency (about 85 percent of that of China); low production costs (lower
than China’s with similar delivery times); and a ready supply of highly skilled and lowcost
labor. In addition, Vietnam’s proximity to China, with China’s large supply of cotton
woven fabrics and other apparel inputs, allows short delivery times for raw materials. 22
Regional Integration
Overview
Although the amount of ASEAN cross-border production using ASEAN inputs is small
relative to production of cotton woven apparel using inputs imported from outside the
ASEAN region, trade and industry representatives report increases in integration and cite
government and private sector initiatives to accomplish this goal. Industry sources report
that the individual ASEAN countries are not able to compete globally without ASEAN
integration. Specific examples of successful regional integration are described in box 4.1.
Increasing ASEAN integrated production will give the region a comparative advantage
that each country alone does not have. 23
The Roadmap is a primary government initiative to integrate apparel production,
including cotton woven apparel production, among the ASEAN countries. A key private
sector initiative is the Source ASEAN Full Service Alliance (SAFSA), sponsored by
USAID’s ACE project, working with the ASEAN Federation of Textile Industries
(AFTEX). Both the government and private sector programs are actively encouraging and
providing procedures and incentives to increase integrated apparel production among
ASEAN members.
ASEAN Roadmap for Integration of Textiles and Apparel Products Sector
The Roadmap was developed to strengthen regional integration through the liberalization
and facilitation of trade in goods, services, and investments in the textile and apparel
sector. It was also designed to promote private sector participation. The Roadmap has
produced mixed results. To date, its major accomplishments have been the reduction and
elimination of tariffs. As of 2010, tariffs on cotton woven fabrics and apparel made from
these fabrics have been eliminated by the ASEAN-6 and reduced and/or eliminated by
the ASEAN-4 (Vietnam, Cambodia, Burma, and Laos) (tables 4.5 and 4.6). According to
the Roadmap, the tariffs on these products are to be completely eliminated by the
ASEAN-4 on January 1, 2012. However, there is no evidence thus far that any of the
other provisions of the Roadmap have been met. For example, the ASEAN nontariff
barrier (NTB) database is incomplete and outdated. 24 The database was established as
part of the Roadmap to help ensure transparency in rules governing the trade of goods. A
22 Industry representatives, e-mail messages to USITC staff, March 11, 2010, March 16, 2010; March 22,
2010, March 26, 2010; industry representatives, telephone interviews by USITC staff, March 22 and
March 24, 2010.
23 Industry representative, interview by USITC staff, Bangkok, Thailand, March 17, 2010.
24 Government official, interview by USITC staff, Jakarta, Indonesia, March 1, 2010.
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