The recent free trade accord between EU and Vietnam has become a major cause for concern for Pakistani textile industry. In this regard, Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) has cautioned the government to address the issue, as it is being seen to further widen the gap in value added apparel exports.
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According to experts, Pakistan’s textile and clothing export figures are rapidly declining due to high energy cost and discriminating import duties on industry raw material and is further speculated to drop, after the EU-Vietnam free trade agreement. They have predicted that Pakistan may lose EU garments share to Vietnam due to the EU-Vietnam FTA, which is the first of its kind that EU has concluded with an emerging economy.
According to industry analysts, Vietnam has already achieved a milestone and the Vietnamese government has fixed the target of $30 billion textile export for the current fiscal, which is likely to surpass Bangladesh textile export of $27 billion.
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In this regard, PRGMEA North Zone Chairman Sohail A said, “Vietnam is an emerging market for garments and has become a major threat, particularly to Pakistan’s value-added textile sector, after the former entered into an FTA with EU. Vietnam is already exporting $23 billion garments against Pakistan’s meager $5 billion textile value-added goods.
PRGMEA Chief Coordinator Ijaz Khokhar has asked the government to immediately take some preventive measures and direct policy-makers to frame policies for the reduction of prevailing input costs like higher taxes for electricity, gas shortages etc.
The association has warned the government that if the steps are not taken, then Vietnam, which is emerging as a key player in textiles and clothing exports may capture Pakistan’s export market in EU. Prime Minister Nawaz Sharif had assured that meetings with the export-oriented industries will be convened, but no such meeting has been held so far.
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