Vietnam overtook Bangladesh to become the second-highest apparel exporter in the world in 2020, as the country kept the Covid-19 pandemic in control and let the factories operate uninterrupted. Bangladesh was thus pushed to the third position while China remained in first position. Bangladesh’s apparel shipment declined during the year as the pandemic forced the country to shut garment factories for almost a month. According to the World Trade Statistical Review 2021 released by the World Trade Organization (WTO) on Friday, Bangladesh’s share in the global apparel market was $28 billion in 2020, while the share of Vietnam rose to $29 billion during the year.
As indicated in the review, Vietnam has been performing strongly as this country has more advantages than Bangladesh. Vietnam signed a landmark Free Trade Agreement (FTA) with the EU in 2019, which has allowed Vietnam to enjoy the zero-duty benefit to this largest trading bloc of the world. Moreover, Vietnam also has a lot of Chinese investment, which is a big plus point for the country. On the other hand, our LDC graduation may shrink a variety of preferences and privileges in global trade. The duty-free benefits we now enjoy under the WTO regime will no longer be available and our exports will face new challenges.
However, economists have said Bangladesh’s RMG export has been declining significantly also due to the closure of about 1200 small factories over the last few years as they failed to maintain strict compliance set by the international retailers and brands and also for the offering of lower prices by the international buyers. But Vietnam has diversified its products at a competitive price, which Bangladesh cannot afford. Vietnam has improved its position by concentrating on product diversification. While Bangladesh is a popular destination for manufacturing low-end items at the cheapest rate globally, Vietnam produces high-end apparel with a strong backward linkage industry. Bangladesh is still lagging behind in the production of technical and smart clothing items, due to which it could not tap into the global market for hospital clothing, school and armed forces uniforms worth billions of dollars. Our RMG owners must go for massive diversification of products to attract more global buyers and regain its position.
