The free trade agreement with Europe is expected to help Vietnam increase its apparel exports. By signing a FTA deal with the European Union, Vietnam has become the first developing country in Asia to receive tariff reductions on 99 per cent goods from the 28-member bloc. Almost 11 per cent of Vietnamese apparel exports to the EU will get complete duty waiver at the time of enforcement of this agreement. The European Union is Vietnam’s second largest export market after the United States, with the main exports being garment and footwear products. Vietnam is the sixth largest readymade garment exporting nation to EU, having four per cent of the total market. After the ratification of the agreement, Vietnam won’t have to pay the 12 per cent duty anymore on garment exports to the EU.

However, Vietnam’s exporters have to comply with regulations if they have to increase their market share in the EU – and that includes meeting rules of origin as well as focusing on environmental safety and information transparency related to labor and the production environment. For the first six months of 2019, Vietnam’s textile and apparel industry grew by 8.6 per cent.