A new giant is rising in east
The dramatically increases in the cost level in China is driving production to other countries in the region.
Vietnam is the new hot spot for production of garments. First of all is the cost lower in Vietnam, but many brands are also considering relocation their manufacturing to Vietnam because of the tariff cuts.
Vietnam is one of the 12 nations included in the Trans-Pacific Partnership (TPP) agreement, signed in beginning of 2016, and expected to be implemented within the next 2 years. Vietnam may stand to gain the most from the TTP agreement. By eliminating tariffs and other trade barriers, the TPP aims to bring the largest and fasting growing economies around Asia Pacific together with the US into a single trading community.
Likewise, EU and Vietnam reached a free trade agreement (FTA) that removes nearly all tariffs on garment traded. This deal is expected to take effect in late 2017 or 2018. It is only possible to make cumulation with Korea, and it only applies to woven and knitted fabrics. Vietnam's cooperation with other Asian countries have no effect on the agreements, so fabric basically need to be sourced from either Vietnam or Korea. Many fabric suppliers especially from Taiwan are therefore in process of establishing in Vietnam of same reason.
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