Bangladesh still in second spot in global apparel trade

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Officially, Bangladesh is still the second-largest garment exporter worldwide in fact it is expected that the united states should be able to retain its second position globally as a result of the regular flow of work orders with the reopening of the stores under western culture.

Between January and July, Vietnam, Bangladesh's main competitor in global apparel trade, exported textile and garment items worth $16.2 billion. For the reason that time, Bangladesh's apparel exports stood at $15.2 billion.

This might give off the impression that Vietnam has usurped Bangladesh as the second-largest supplier of apparel on the globe.

But there is a caveat: Vietnam's amount is counted for just two items, textile and garments, while Bangladesh's amount is counted only on one item, garment.

So, Bangladesh continues to be far ahead of Vietnam with regards to garment export worldwide but still the second-largest exporter.

"You are not comparing apples with apples but apples with oranges," said Arshad Jamal Dipu, vice-president of the Bangladesh Garment Manufacturers and Exporters Association.

Based on the latest data from the World Trade Organisation, which is of 2019, Bangladesh retained its second position in garment export, grabbing 6.8 per cent of the marketplace share while Vietnam took 6.1 %.

In 2019, Bangladesh exported garment items worth $34 billion and Vietnam exported garment items worth $31 billion, the WTO data also said.

It can be noted that Vietnam exported about $9 billion worth of textile in 2019 according to the WTO report, Dipu said.

"So, if the textile export value can somehow be excluded from Vietnam's textile and clothing export, then Bangladesh would remain the second," he said.

Besides, there is absolutely no such traditional official data that proves that Vietnam has bought out Bangladesh to be the second-largest clothing exporting country.

"We are still in the center of 2020, so we need to wait until July 2021 for the WTO data for 2020," he said.

However, the data that is being described in media reports nowadays to draw a comparison between Bangladesh and Vietnam is a misleading comparison.

Even if Vietnam gets control Bangladesh soon, it should not be a matter of surprise, because Vietnam has been registering higher export growth than Bangladesh and any other apparel exporting country in the past decade.

However, the question that may be asked is how Vietnam is being able to perform so well in comparison to Bangladesh.

And the answers would advise where Bangladesh should put its focus in the coming days, Dipu said.

The BGMEA vice-president also said there is no debate on the actual fact that Vietnam has an improved country competitive position than Bangladesh. At least the World Bank's conducting business index reveals that fact.

Vietnam's industry is dominated by foreign investors, which isn't the case of Bangladesh, so they are before regarding technology, management know-how, efficiency and skills.

They do also need less lead time than Bangladesh since China being nearby to them makes the import of recycleables easier.

Furthermore, Vietnam has gained significant progress concerning design input and the making of patterns, which is among the key success factors for them.

"Also to be honest, Bangladesh lags way behind Vietnam in this respect."

Without making considerable advancements in the areas of pattern making and design development, it could be difficult for Bangladesh to move to the next degree of apparel manufacturing.

Not just that, but Vietnam's progress and maturity in the region of financial diplomacy are also commendable.

The country has recently entered into free trade agreements (FTAs) and regional trade agreements (RTAs) with several trade partners including the Association of South-East Asian Nations (ASEAN) and europe (EU).

The recent EU and Vietnam FTA and EU Vietnam Investment Protection Agreements testify Vietnam's capability in working with a trade partner just like the EU.

"Bangladesh has to go quite a distance, particularly when the least-developed country (LDC) graduation is a matter of time for us and we are likely to lose trade benefits."

This will put the country's exporters in a disproportionately damaged situation.

"We have to enhance the capacity of our industry. Concurrently, we are in need of better infrastructure to further increase country competitiveness, which can be achieved through the optimised cost of business and lead time. Those are long term steps, but we must make progress faster."

Bangladesh needs diversification of markets and draw more local and foreign investments in high-end backward linkage industries, especially textiles, and forward linkage pursuits like putting up design and innovation centres.

Primarily, FTAs with right trade partners will be crucial for Bangladesh to keep pace with competitors, he said.

Moreover, the rebound implies that garment exports may also fare well soon, as the task orders are returning to Bangladesh with the reopening of the economies and stores in the Western world, Dipu added.

Between 1 and 22 August, Bangladesh exported garment items worth $2.4 billion, which is 45.8 % greater than that of the same period this past year, according to data from the BGMEA.

"This is a matter of hope that the buyers started taking back the previous cancelled work orders," said Mohammed Abdus Salam, acting president of the BGMEA. So, the neighborhood suppliers are receiving back their previous arrear payments.

The sector was mainly shocked when practically 100 big companies in the US and the EU became bankrupt due to the coronavirus pandemic.

However, in future, Bangladesh will face more competition from Vietnam as a result of the signing of the FTA between your EU and Vietnam, he added.

Vietnam has been moving extremely fast because they have a whole lot of facilities like many seaports, foreign direct investment (FDI) in textile and garment and advantages in lead time, none of which Bangladesh has, said Ahsan H Mansur, executive director of the Policy Research Institute (PRI).

Bangladesh must have encouraged the FDIs in textile and apparel items a whole lot earlier so that the united states could earn more foreign currency and more employment generation and in addition technology transfer and technical knowhow.

Mansur continued to advise the federal government to engage the Association of Southeast Asian Nations, apart from traditional markets just like the EU, the united states and Canada, for increasing exports and enjoying tariff benefits.

He also recommended exploring the Asian markets like China, India and Japan more.

The local garment manufacturers and exporters also needs to consider their product diversification.

For example, Bangladesh's concentration is 74 % on cotton-made fibres whereas the global fashion trend has been diverting to man-made fibres. 

So, Bangladesh should focus more on man-made fibre to create garment items for grabbing more of the market share worldwide, he said.
Source: https://www.thedailystar.net

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