Vietnam's textile and garment exports to the EU could rise tenfold once the free trade agreement takes effect. The FTA will be signed after nine years of negotiations, and immediately afterwards 70.3 per cent of Vietnamese products exported to the EU would be free of tariffs. Textiles and garments are currently subject to an average tariff of 9.6 per cent in the EU, but it would gradually reduce to zero over seven years.

The EU is the second largest importer of Vietnamese textiles after the US and its imports from Vietnam are growing by seven per cent to ten per cent a year. Major textile companies of Vietnam will see orders increase dramatically when the trade deal comes into force. Some plan to link up with domestic suppliers in the yarn-forward supply chain in order to comply with proof of origin rules and take advantage of the trade agreement. The high quality standards that are mandatory under the deal are expected to boost Vietnam’s pace of reform and international integration.

However, grasping the opportunities arising from the FTA would not be easy since the tariff breaks are only for goods that meet quality standards and rules of origin. Domestic value must account for at least 40 per cent of the final product.