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Vietnam’s progress in RMG sector alarm rivals

Key Asian apparel producers such as Cambodia and Myanmar are alarmed that with TPP, Vietnam could undercut their vital garment industry. China and Bangladesh, the world’s two biggest garment exporters, are also likely to be affected, as well as Pakistan, which has a large but struggling textile and apparel sector. Indonesia, which sends half of its textile and garment exports to the US and EU, is also under threat.

Vietnam’s exports to the US could double once the TPP takes effect. Most exposed of all could be Cambodia, where the garment sector is a main pillar of the country’s small economy. The industry employs more than 7,00,000 workers and accounted for roughly 80 per cent of Cambodia’s total export revenue in 2014. But the garment sector has already lost US market share to Vietnam due to that country’s lower labor costs and higher productivity. And with the TPP things may get worse.

Another country facing a challenge from Vietnam is Myanmar. Myanmar garment makers look to Europe as both a market and a source of investment, with garments a key part of the country’s plans to become a manufacturing economy. The EU cut duties on Myanmar’s exports to Europe in 2013. Around 20 per cent of Myanmar's garment exports now go to the EU.

 
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