On June 8 this year, Vietnam and the European Union signed a free trade agreement, which will eliminate or reduce 99% of tariffs.
The World Bank said that this agreement will bring 2.4% GDP growth to Vietnam’s economy in 2030.
Thanks to the signing of the free trade agreement between Vietnam and the EU at the end of June, the EU will cancel about 85.6% of Vietnam’s import taxes, of which 77% of textile tariffs will be cancelled. EU exports to Vietnam will also have 48.5% % of tariffs will be eliminated; 99% of tariffs on goods from both sides will be eliminated intermittently within 10 years.
So, Vietnam’s textile and clothing exports in June 2020 were US$2.602 billion, an increase of 39.37% month-on-month and year-on-year. A decrease of 9.66%; exported yarn was 127,200 tons, a year-on-year increase of 0.24% and a month-on-month increase of 27.95%.
Even after August 1, 71% of Vietnam’s exports to Europe are subject to tariffs, and 65% of Europe’s exports to Vietnam tariffs, immediately exempted. According to the agreement, about 99% of tariffs in bilateral trade in goods will be gradually reduced until eliminated.
Look at Bangladesh again. If you have bought clothes from h&m, gap or uniqlo, you may be in the clothes category. On the label, you can see that the place of production is not only made in China, but also Bangladesh or Vietnam.
Due to the epidemic, as of early May, nearly half of the garment factories in Bangladesh had gradually resumed work. According to statistics, there are 7,602 garment factories in Bangladesh, of which 2,916 have resumed production.
Mohammad Hatem, Vice Chairman of Bangladesh Knitwear Manufacturers and Exporters Association said: “We have to accept that the coronavirus is a part of life If we don’t start work, there will be an economic crisis.”
The MB Knitting Company under his own name has restarted Some factories have been opened to produce clothing for British Primark and several other retailers. Hatem added that the factory was under “pressure” from brand merchants to meet export deadlines.
The vice chairman is also worried that billions of orders may be transferred to countries such as Vietnam or China.
Bangladesh is the world’s second largest textile exporter, after China.
According to official statistics, garment exports account for more than 80% of Bangladesh’s total merchandise exports, employing more than 4 million people. Industries are crucial to Bangladesh’s economic development and people’s lives.
According to statistics from the Bangladesh Garment Manufacturers and Exporters Association, from July 2019 to June 2020, Bangladesh China’s clothing exports amounted to US$27 billion, and Vietnam’s clothing exports reached US$30 billion.
Vietnam has surpassed Bangladesh to become the world’s second largest garment exporter.
So how will Chinese products, especially labor-intensive products such as textiles and clothing, face competition from Vietnamese products?
Although this may lead to increased competition due to internal and external troubles, compared with China’s mature industrial chain, Vietnam’s advantages It is obviously the demographic dividend, policy advantages and geographical conditions. Moreover, there are only a few textile companies in Vietnam, and the market is still developing.
China’s export trade will really get worse in 2020, but as a member of multiple international free trade agreements, Vietnam has become a new trade darling and reaped all the dividends: joining the Trans-Pacific Partnership Agreement and harvesting orders from the Canadian market .
Signed a free trade agreement with the EU. In 2019, Vietnam’s total import and export volume exceeded 500 billion US dollars, of which exports to the EU Reaching US$41.48 billion. Imports from the EU reached US$14.91 billion, and the EU is Vietnam’s second largest export market after the United States.
There is also the ASEAN Economic Community, One Belt and One Road, and the World Trade Organization. That country is really favored by free trade.
In short, Vietnam is indeed developing very fast, even surpassing Bangladesh, but it is incomparable with China. After all, Vietnam is a natural extension of China’s industrial chain rather than a subversion. At present, Vietnamese companies mainly import fabrics from China and rely heavily on China’s supply of textile raw materials. Moreover, Vietnam’s population base is not as large as China’s, but there is a country with a population base similar to China’s. </p
