Apparel and clothing items produced in Vietnam with South Korea-made fabrics will also be allowed to enjoy lower tariffs in the European Union, under the Vietnam-EU free trade agreement. Previously, clothes needed to be made with locally produced fabrics in order to enjoy the benefits of the Vietnam-EU free trade agreement, according to Vietnam’s Ministry of Trade, Industry and Energy.
“With South Korea being the second largest supplier of fabric in Vietnam, the latest policy will lead to stronger demand for South Korean products, compared with other rivals such as China and Taiwan,” the ministry said in a statement.
Vietnam imports 80% of its textile requirement. In 2019, China accounted for 55% of Vietnam’s imports of fabrics, trailed by South Korea and Taiwan with 16% and 12%, respectively. Japan accounted for 6%.
Last year, South Korea’s shipments of fabrics to Vietnam came to US$ 2.35 billion, down 18.4% on-year.