Textile And Clothing Conflicts In Southeast Asian Countries: Garment Competition In Vietnam And Bangladesh

Vietnam?

Vietnam's sustainable development industry and strong labor laws have made great progress in the textile industry and become one of the most powerful competitors in Bangladesh's clothing export field.

The new free trade agreement (FTA) signed by the European Union and Vietnam has made the competition more intense.

In June 30, 2019, the European Union signed a landmark free trade agreement with Vietnam: through signing this agreement, Vietnam is now the first country in Asia to receive 99% tariff relief in the 28 EU Member States.

The agreement still needs approval from the European Parliament.

However, some legislators have shown their concern about national human rights issues. Vietnam did not ratified the two basic conventions of ILO, including 87 items - freedom of association and protection of organizational rights, and 105 - abolition of forced labour.

According to AMNESTY INTERNATIONAL, Vietnam now has at least 128 political prisoners, 10% of whom are sent to prison for social media posts. 88 projects that monitor human rights violations in Vietnam say Vietnam currently holds more than 200 political prisoners.

Bengal

Hooke Huq, President of Bangladesh garment manufacturers and Exporters Association (BGMEA), said that Bangladesh will face fierce competition for export clothing to the EU because its rival Vietnam recently signed a free trade agreement (FTA) with the European Union (Rubana). Hooke said nearly 11% of Vietnam's exports to the EU will be fully duty-free.

In June 30th, the European Union signed a free trade agreement with Vietnam in Hanoi, paving the way for reducing tariffs on 99% of the trade between the EU and Vietnam. The trade agreement will take effect after the approval of the European Parliament.

Hooke said Bangladesh's 12.18% of EU clothing exports will compete with Vietnam.

She said that the --147 products of these commodities will face fierce competition, and the possibility of such goods transfer will be greater.

Within five years, 49% of Vietnam's exports to the EU and 62% of Bangladesh's exports to the EU will compete directly. Hooke said that in addition to declining competitiveness and trade diversion, the free trade agreement may have a serious impact on the price level of Bangladesh manufacturers.

Between 2014 and 2018, Bangladesh's clothing exports decreased by 3.64% at unit prices, while Vietnam's prices rose. With the gradual abolition of Vietnam's export tariffs, price competition will become more intense.

At present, the EU is the largest garment export destination in Bangladesh. If Vietnam gets the EU's 0 tariff, Bangladesh's market share will shrink.

Hooke added that Vietnam did not ratified the two basic conventions of the ILO: the freedom of association and the protection of the rights of the eighty-seventh conventions and the abolition of forced labour by the 105 conventions, and that Bangladesh, which ratified 7 of the 8 conventions, would be punished for the implementation of the free trade agreement.