Vietnam’s clothing industry trade bodies have partnered on an initiative aimed at addressing the impact of Covid-19 on workers and businesses.
The joint statement, which was issued yesterday (22 June), calls for the development of an agenda and roadmap to overcome the crisis and build a more sustainable industry. It has been signed by the Vietnam General Confederation of Labour (VGCL), the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Textile and Apparel Association (VITAS), the Vietnam Leather, Footwear and Handbag Association (LEFASO), and the National Federation of Christian Trade Unions in the Netherlands (CNV).
Ngo Duy Hieu, the vice president of the VGCL, says: “The Covid-19 pandemic is still raging around the world and has serious consequences. Trade unions and relevant units call on the Government of Vietnam, the Governments of the member countries of the European Union (EU) of partners, the EU brands to have timely and favourable support mechanism for workers and businesses affected by the Covid-19 pandemic, greatly simplifying administrative procedures; create mechanisms and support resources to help the textile industry; leather, shoes and bags become an innovative industry, able to produce products, apply more sustainable, environmentally friendly production methods.
“Now is the time to promote the development of the textile industry; leather, shoes and bags through trade agreements, thereby facilitating training for workers and improving their employability. Increasing brand responsibility in supply chains will also contribute to the maintenance of employment and livelihoods of workers.”
According to the trade bodies, the Covid-19 pandemic has left nearly 1m of the industry’s 4.3m employees out of work. Others are on reduced hours and subsequently lower income.
They also estimate that in 2020 the export turnover of Vietnam’s textile and garment industry will decrease by US$8.5bn while leather, shoes and bags will drop by $5.5bn. It is also expecting a decline in exports to the EU by both industries of around $5bn.
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By GlobalDataTruong Van Cam, vice chairman of VITAS, adds that for textiles and footwear, the EU is a large-scale export market.
“We urgently need the cooperation of state and government agencies. If businesses cannot survive and maintain, the opportunity that the upcoming EVFTA Trade Agreement will bring will be difficult to take advantage of.”
Vietnam’s National Assembly approved the EU-Vietnam Free Trade Agreement (EVFTA) earlier this month, clearing the path for adoption of the pact this summer.
Vietnam is the EU’s second-largest trading partner in the Association of Southeast Asian Nations (ASEAN) after Singapore, with trade in goods worth EUR47.6bn (US$51.91bn) a year and EUR3.6bn when it comes to services. The main EU imports from Vietnam include telecommunications equipment, clothing, and food products.
At present, only 42% of Vietnamese exports to the EU currently enjoy zero tariffs under the Generalised System of Preferences (GSP).
The FTA provides for the almost complete (99%) elimination of customs duties between the two blocks: 65% of duties on EU exports to Vietnam will disappear as soon as the FTA enters into force, while the remainder will be phased out gradually over a period of up to ten years. The EU will do the same over seven years.
