Sunday, 30 June will see a significant development in the much-awaited trade agreement between the European Union (EU) and Vietnam. Cecilia Malmström, Commissioner for Trade and Romanian Minister for Business, Trade and Entrepreneurship Ștefan-Radu Oprea will be finally signing the deal.
“After Singapore, the agreement with Vietnam is the second to be concluded between EU and a Southeast Asian country. It is a stepping stone to a greater engagement between Europe and Vietnam,” maintained the President of EU Jean-Claude Juncker while welcoming the decision.
This is a landmark development for the Vietnam garment industry for sure but seen from the perspective of Indian garment makers, this could prove to be rather ominous, so feel some entities.
“The EVFTA will bring down tariff on Vietnamese knitted and woven apparel to zero from the current level of 9.4 per cent and 9.2 per cent, respectively. This may bring further competition to us (the Indian textile and apparel industry) along with margin pressures,” underlined the Indian Texpreneurs Federation (ITF), adding, “There is an urgent need to improve the efficiency, and also move towards value-added products…”
Once EVFTA comes to force, 71 per cent of duties will disappear on Vietnamese exports to the EU, and the remainder will be phased out over a period of up to 7 years, according to the decision adopted by European Council.
Currently, Vietnam is EU’s second largest trading partner within ASEAN. In 2017, EU’s garment imports from Vietnam stood at €3.3 billion, constituting a 9 per cent share of total clothing imports made by the EU.