A free trade agreement is being negotiated between the European Union and Vietnam. The FTA may be completed before the end of the year. But European retail clothing brands want duties on apparel to be eliminated. They also want more flexible rules of origin.
The European Branded Clothing Alliance (EBCA) says the EU-Vietnam FTA is a priority and is welcome but it looks forward to a global trade policy environment which eases the operation of its supply chains. To be able to benefit from new preferential tariffs, EBCA says its member companies require a more flexible approach from the EU on rules of origin for apparel, reflecting the global value chains it operates. Since Vietnam has limited fabric production available to international brands, EBCA says this could severely restrict its ability to benefit from reduced tariffs if the current model for rules of origin is maintained.
The group also wants to see the FTA address non-tariff barriers that hinder European retailers setting up operations in Vietnam, such as cumbersome economic assessment tests and quality testing on apparel consignments.
The European Branded Clothing Alliance represents around 60 brands with a major European presence - including Inditex, H&M, Levi Strauss, Gap, Nike and VF Corporation.