"Thailand has a strong textile and garment supply chain from upstream to downstream. However, many producers still lack new technology, design development and linkages with other enterprises, so they cannot gain the most benefit from integration," Srirat Rastapana, director-general of the Trade Negotiations Department, said yesterday.
Companies need to link their supply chains with local and Asean partners, he said.
Asean is a major supplier of textiles and garments. Indonesia is the world's eighth-largest exporter of yarn and fabric, while Thailand is 10th. Vietnam is the 10th-largest supplier of woven garments, followed by Cambodia at 11th, Indonesia at 16th and Thailand at 18th place.
Under the Asean Free Trade Agreement, the six founding members - Thailand, Indonesia, Malaysia, the Philippines, Singapore and Brunei - have already slashed duties on textiles and garments to zero. The remaining members - Cambodia, Laos, Burma and Vietnam - will eliminate tariffs by 2015.
Srirat said Thailand should create trading opportunities by cooperating with other Asean nations to strengthen its supply chains. Companies here should adopt advanced technology and the latest innovations for their production and develop their own brands to add value to their products.
According to a department study, Thailand, Indonesia and Malaysia have strong competency in textile production from yarn production, weaving and spinning to bleaching, printing and cutting.
Cambodia, Vietnam and Laos are strong in decorating, sewing and exporting to the United States and the European Union. Vietnam, Laos and Cambodia have low labour costs and export privileges to the US and EU.
Textile and garment manufacturers should consider relocating their plants to neighbouring countries so they can avail of those privileges, Srirat said.
ML Kathathong Thongyai, director of the Office of Product Value Promotion, the Department of Export Promotion, anticipated a zero growth for garment export due to crises in Japan and the Middle East, two key major markets. Garment export value reached US$3.2 billion last year, up 8 per cent over 2009.