Sunday, 30 June 2019 marked an important chapter for the Vietnam garment and textile sector!
The much-awaited trade agreement between the European Union (EU) and Vietnam, the EU-Vietnam Free Trade Agreement (EVFTA) took shape after European Commissioner for Trade Cecilia Malmström and Vietnam’s Minister of Industry and Trade Tran Tuan Anh, finally signed on the dotted lines.
With EVFTA coming into effect, Vietnam’s total export turnover to the EU market is expected to increase by around US $ 16 billion.
The EU is Vietnam’s largest export market (together with the US). Exports to the EU have multiplied by three over the last five years, representing US $ 30.9 billion in 2015 whereas imports accounted for US $ 10.3 billion.
As per pundits, The EVFTA is a very good, balanced and comprehensive agreement which includes the elimination of almost all tariffs for goods originating from Vietnam. Naturally, the country’s garment and textile sector is euphoric with industry insiders outlining the next course of action to ensure Vietnam is able to exploit EVFTA to the fullest.
Speaking on this development, Chairman of Vietnam Textile and Apparel Association (VITAS) Vu Duc Giang said that although the rules of origin in the EVFTA are not as strict as in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnamese firms still face several challenges because most of them are into just cutting and sewing. Additionally, most production materials still come from China, which doesn’t have a trade deal with the EU.
As such, Giang called upon the domestic businesses to develop weaving and the supporting industries to provide raw materials so as to capitalise on the EVFTA.
Most in the industry are, however, of the opinion that as most of the countries exporting textiles and garments to the EU don’t have FTAs with the bloc, if Vietnamese firms can meet the origin requirements, the EVFTA will open up enormous opportunities for exports.