Vietnam is set to gain a lot from the Trans-Pacific Partnership (TPP). And Bangladesh, China, Indonesia and Pakistan are worried. Bangladesh and China are the world’s number two and the top garment exporter respectively. Indonesia and Pakistan have large textile and apparel sectors.
Vietnam is already the world’s fourth biggest garment exporter. The TPP deal 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.
Access to TPP for Vietnam is certainly a concern for apparel exporting countries, especially for Bangladesh. 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, TPP still needs to be ratified in the US and several other countries, delaying implementation at least until next year. 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 alarmed that if the trade pacts proceed as planned, Vietnam could undercut their vital garment industries. Myanmar garment makers 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.