The European Union Trade Commissioner Cecilia Malmström and Vietnam’s Minister of Industry and Trade Tran Tuan Anh signed the much-awaited EU-Vietnam Free Trade Agreement (EVFTA) in Hanoi on 30 June 2019.
With this agreement, Vietnam’s garment export to EU is set to touch a new high as EVFTA includes the elimination of almost all tariffs for goods originating from Vietnam.
A positive development for Vietnam’s garment and textile industry for sure, EVFTA is giving sleepless nights to garment makers of Bangladesh. And this is not without a reason.
“Currently, the EU is the largest RMG export destination of Bangladesh. If Vietnam, the country’s one of the main competitors gets zero tariff facility to the EU, Bangladesh’s market share will shrink…Also, Vietnam will be able to offer competitive prices for its products, like Bangladesh, when its current tariff of nearly 8-9 per cent for exporting goods to the EU markets will be withdrawn. In this case, Bangladesh can lose its market,” underlined Anwar-Ul-Alam Chowdhury (Parvez), former President of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), speaking to the media.
It may be mentioned here that Europe is the largest destination of Bangladesh’s garment export currently. It made a shipment of US $ 19.63 billion in 11 months (July-May) of the last fiscal year (FY), 2018-19 to Europe.
But now with the EVFTA coming into effect subject to approval of the European Parliament, industry insiders and analysts are apprehensive as to the adverse impact of EVFTA on Bangladesh’s flourishing readymade garment industry.
For more information on how would EVFTA impact Bangladesh’s apparel sector, don’t forget to read our insightful article titled ‘EVFTA: As Vietnam looks to make hay, Bangladesh prepares for challenging times’.