Southeast Asia losing its grip on the market to Vietnam

May 10, 2016 written by
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When the garment makers are given a strong respectable status, for decades the garment manufacturers in Indochina have led a convincing stand of making the wider public know that their workers ply a menial, unskilled trade undeserving of more than a pitiful wage, currently about $150 a month.

Renowned brands have been outsourcing production to these manufacturers, for named products ranging from denim jeans to lingerie. While the labour force here is paid a meagre salary, the products are then passed onto the consumers for a whole lot more. Still the producers like to shout out  that any pay rise afforded workers will result in the demise of the industry. This was apparent in Cambodia three years ago when a campaign for a higher living wage was met with a hysterical response from the business community.

Despite those dire warnings and pay rises that manufacturers would describe as generous, the industry survived and foreign investment rose. Following the signing of the free trade agreement with the European Union (EU) after two-and-a-half years of talks, Vietnam now is fully ready to diversify. This will definitely benefit textile apparel exports from Vietnam.

But the same is believed to happen over ‘longer staging periods’ of up to seven years and that Hanoi would have to undertake a series of steps to fully realize these gains due to the FTA’s strict origin rules.  This situation is looked up as a relevant characteristic, which marks the start of the decline in Western manufacturing with its shift to East Asia.

The textile and apparel industry within Vietnam and Cambodia remain in good shape and on a steady course. It continues to grow and will deserve quality pay rises for its well-trained work force in the time to come.

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