Garment manufacturers in Indochina for decades have led a campaign designed to convince the wider public that their workers ply a menial, unskilled trade undeserving of more than a pitiful wage, currently about $150 a month. Skeptics of course have long refused to believe this narrative. The fact is that for a few bucks, big brands outsource productions, which are then passed onto consumers for a whole lot more.
Recently, Melbourne-based ANZ Bank has released an upbeat report covering the industry’s future. It said that the outlook on Cambodia’s exports of RMG remains positive in light of the consistent foreign investment into the sector. It expects Vietnam to fully diversify within the industry following the signing of its free trade agreement with the European Union (EU) after two-and-a-half years of talks. The FTA is expected to be ratified next year with a formal launch in 2018.
ANZ said in its latest release of ‘Greater Mekong Quarterly Outlook’ that Vietnam has already managed to get a foot in the door, with the EU being a key market for its footwear exports. The ratification of the EU-Vietnam Free-Trade Agreement (FTA) will likely to benefit textile apparel exports from Vietnam.
However, ANZ also said that these benefits would take place over ‘longer staging periods’ of up to seven years and that Hanoi would have to undertake a series of steps to fully realise these gains due to the FTA’s strict origin rules.