Over seven years on from its entry into force, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has emerged as a key engine of Vietnamese export growth.
Yet reaping the full reward of its tariff concessions demands that companies, above all those in textiles and clothing, tackle origin rules, supply chain restructuring and value chain realignment.
Faced with sourcing pressures, textile and garment firms have moved early to adopt more adaptable supply strategies.
Tran Minh Hieu, General Director of TNG Investment and Trading JSC, explained that prior to CPTPP, his company chose raw material vendors chiefly on price, quality and lead time.
The CPTPP agreement’s “yarn-forward” principle has since elevated origin compliance to a decisive factor in selecting partners.
TNG has audited and graded its whole supplier base, giving priority to long-term relationships with vendors that satisfy origin criteria and forging strategic alliances with local fabric mills.
The company has also built its own software platform to handle origin data, assigning QR and ERP codes to every consignment of imported fabrics and trims, tied to supporting paperwork, invoices and contracts, so that transparency and traceability are assured.
Truong Van Cam, Vice Chairman and General Secretary of the Vietnam Textile and Apparel Association (VITAS), noted that the CPTPP, in force since January 2019, unlocked access to 12 member markets.
Vietnamese textile and garment shipments to these destinations climbed from US $6.27 billion in 2018 to $8.3 billion in 2025.
Even so, the yarn-forward requirement continues to pose a serious hurdle. Domestic yarn output broadly covers national needs, but weaving, dyeing and finishing of fabric remain pronounced chokepoints.
Buying inputs from inside the CPTPP bloc is equally difficult, since partner economies are not leading suppliers.
Numerous Vietnamese clothing producers still work under the cut-make-trim model, depending on inputs provided or specified by buyers.
This curbs their capacity to progress towards higher-value arrangements such as free on board (FOB) and original equipment manufacturing (OEM).
Despite broader market access, Vietnamese products represent barely more than 1% of CPTPP members’ total imports.
Shipments travelling on preferential CPTPP certificates of origin (C/Os) still account for under 10% of exports, even though that share has quadrupled since implementation.
Experts blame the low take-up chiefly on the yarn-forward condition. Under this rule, every manufacturing stage, from spinning and weaving through to dyeing, cutting and sewing, must occur within the CPTPP area.
Vietnam’s textile and garment sector presently supplies only about 50% of its materials and accessories needs at home, with domestic fabric output meeting just 36% of requirements.
During the first nine months of 2026, the sector spent as much as $11.6 billion on fabric imports, compared with $15.2 billion across 2025.
Meanwhile, materials and accessories imported from CPTPP partners stayed practically flat at $1.58-1.59 billion a year between 2018 and 2025.
Ngo Chung Khanh, Deputy Director of the Ministry of Industry and Trade’s Department of Foreign Market Development and Multilateral Trade, observed that Vietnam has put 17 free trade agreements (FTAs) into effect with almost 70 partners globally.
“Companies, he said, ought therefore to draw up supply chain maps that pinpoint suppliers, fallback sources and likely points of disruption, enabling a better response to trade swings,” Vietnam Plus reported.
He emphasised that the CPTPP deserves to be seen not merely as an export outlet but also as a vital raw material source.
Trade promotion should increasingly prioritise supply chain connectivity, with origin rules used as a design tool for building supply chains from the input stage.
“Moving from “Made in Vietnam” to “Made in CPTPP” would generate shared added value and lift overall efficiency,” he added.
Analysts further advise businesses to review their full supply chains and sort materials into those open to immediate domestic or intra-bloc substitution, those needing further technological advances, and those requiring fresh investment.
Where inputs cannot yet be made locally, tie-ups and joint ventures with producers from China, Taiwan and the Republic of Korea could establish plants in Vietnam, securing domestic origin, steady supply, cost discipline and punctual delivery.
The CPTPP is a major free trade agreement among 12 countries across the Asia-Pacific region and the United Kingdom.
Member countries include Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United Kingdom which joined in December 2024 and Vietnam.
Image courtesy: VNEconomy
