EVFTA officially takes effect from August 1, 2020 and will soon be put into effect in Vietnam in the near future under the approval of the National Assembly of both sides. With many deep and wide commitments, the EVFTA is expected to bring many favorable opportunities to our country’s socio-economics. According to the assessment and comment of experts, the agreement will boost the export turnover of Vietnamese goods to Europe, thereby speeding up the process of integration into the world economy. The direct benefit of the EVFTA is the EU’s tariff exemption for key export items, including textiles. This is considered a golden opportunity for the Vietnamese garment industry.
Impact of EVFTA on Vietnam’s garment industry
EVFTA (European-Vietnam Free Trade Agreement) is a free trade agreement between Vietnam and 27 EU member countries.
With an annual import scale of over 250 billion USD in textiles and garments, the EU is the world’s largest textile and apparel import market, accounting for 34% of the world’s total textile and apparel imports, with total garment demand growing at an average rate. 3%/year, while the export market share of Vietnam’s textile and garment only accounts for about 2.7%, there is room for Vietnam’s textile and garment industry to increase exports to the EU market after the EVFTA comes into effect. is very promising.
With the EVFTA Agreement, 100% of Vietnam’s textile and garment products will be reduced to 0% import tax after up to 7 years from the date of entry into force of the Agreement. Specifically, according to statistics of the Ministry of Industry and Trade for textiles, the EU will eliminate tariffs with 77.3% of Vietnam’s export turnover after 5 years and the remaining 22.7% of the turnover will be removed. quit after 7 years.
Along with the benefits of tariff elimination, the EVFTA with the rule of origin requiring “from fabric” combined with the requirement “from the yarn onwards” of the CPTPP Agreement will continue to promote the formation of a closed production chain. from upstream to finished garment cutting, increasing added value for the industry and gradually reducing dependence on the import of external raw materials.
This is considered an opportunity to help businesses break through and transform themselves after the Covid 19 pandemic.
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