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All Sewn Up? Vietnam Garment Makers Face Hitches in Lucrative EU Trade Deal

Reuters

   HO CHI MINH CITY - For Tran Nhu Tung, Vietnam's newly signed free trade
   deal with the European Union presents both huge opportunity, and a
   logistical headache.

   The vice chairman of Thanh Cong Textile Garment Investment Trading
   (TCM) in Ho Chi Minh City is planning a rapid expansion in anticipation
   of the influx of orders the tariff-slashing EU-Vietnam Free Trade
   Agreement (EVFTA) promises to bring.

   "The EVFTA is the game changer that will pave the way for Vietnamese
   garments to dominate the European market," Tung said amid the clack of
   thousands of sewing machines in the metal-roofed factory on the
   outskirts of Vietnam's commercial center.

   Analysts say garments, worth around 10% of Vietnam's exports and
   currently subject to EU tariffs of around 9%, will be by far the
   biggest beneficiary of the EVFTA finalized last month.

   The EU is already Vietnam's second largest garment market after the
   United States, accounting for 15% of the country's total garment
   exports last year, Vietnam Customs data shows.

   Tung expects orders at his factory, which produces company uniforms and
   sportswear, to increase by at least 15% once the EVFTA, which will
   reduce duties on nearly half of all garment products to zero, is
   ratified by the European Parliament.

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