Bangladesh and China, the world’s number two and the top garment exporters respectively, as well as Indonesia and Pakistan, which have large but struggling textile and apparel sectors, are likely to be affected by Vietnam if US-led Trans-Pacific Partnership (TPP) and a free trade agreement between Vietnam and the European Union become fully operational, trade circles said.Vietnam is already the world’s fourth biggest garment exporter, will gain new preferential access to markets among the 11 other countries that have signed up to the TPP as well as the 28 EU member countries under the EU-Vietnam FTA. These are lucrative markets for Asia’s garment exporters and apparel makers of leading Western brands, traders said.According to the World Bank the TPP deal alone could see Vietnam’s exports — from clothing and footwear to coffee and seafood — increase by 30 per cent and boost the country’s economic growth by 10 per cent by 2030.Bangladesh Garment Manufacturers and Exporters Association Senior Vice President Faruque Hassan said: “Access to TPP for Vietnam is certainly a concern for apparel exporting countries, especially for Bangladesh.” He noted that Bangladesh will continue to face average duties of 16 per cent on garment exports to the US while Vietnam’s duties will be eliminated.However the TPP still needs to be ratified in the US and several other countries, delaying implementation at least until next year, while the EU-Vietnam FTA will take seven years before duties on Vietnam’s garment exports to Europe are completely eliminated.Even so, key regional apparel producers such as Cambodia and Myanmar are already alarmed that if the trade pacts proceed as planned, Vietnam could undercut their vital garment industries.”Vietnam’s trade deals will be a concern — not just for us, but the whole region,” the Nikkei Asian Review in a report on Tuesday quoted Myanmar Garment Manufacturers Association (MGMA) Secretary General as saying.Myanmar garment makers now look to Europe as both a market and a source of investment, with garments a key part of the country’s plans to become a manufacturing economy.
