U.S., Vietnam Sign Textile Agreements

U.S., VietnamSign Textile Agreements
The way Ron Sorini sees it, that it pleases nobody is perhaps the sign of a good agreement. Chicago-based Sorini, president of trade negotiations and legislative affairs of law firm Sandler, Travis and Rosenberg and chief textile negotiator at the Office of the United States Trade Representative during President George Bush Sr.’s administration, is referring to the recently signed U.S.-Vietnam Bilateral Textile Trade Agreement.The agreement, which provides quotas for Vietnamese textile imports covering 38 product categories and valued at $1.7 billion, has unleashed a series of complaints by both the U.S. and Vietnamese textile industries.The agreement, which is set to expire at the end of 2004 and has an annual automatic rollover clause that is effective until Vietnam joins the World Trade Organization (WTO), increases Vietnam’s textile import quotas by 7 percent per year (2 percent for wool products). Meanwhile, Vietnam has agreed to levy its textile and apparel tariffs at 7 percent for yarn, 12 percent for fabric and 20 percent for apparel, in addition to promising to refrain from imposing non-tariff barriers.Upon the announcement of the agreement, the American Textile Manufacturers Institute (ATMI) issued a statement condemning the U.S. government’s move as “[abandoning] its commitments to the textile industry and [its] associates, and to textile state representatives.”Across the Pacific, Vietnamese textile industry representatives also are reportedly dismayed by the agreement, because it will take only about nine months to fill the new quotas.Rhetoric aside, Sorini says the estimated $1.7 billion value of the quotas amounts to less than 3 percent of U.S. textile imports. “Can 3 percent hurt that badly?” he asks hypothetically. “Maybe in some cases. But overall, it is not a huge number.”

Sorini goes on to say that because Vietnam is a fairly large purchaser of U.S. cotton, the cotton sector in the United States will likely see an increase in its exports.Ultimately, Sorini expects no major impact on the textile industry, be it in the United States or in Vietnam, because all quotas will be abolished in two years when Vietnam is expected to join the WTO.On the other hand, for U.S. textile manufacturers to flourish in the future, Sorini says diversification is key. “Their concerns are correct because there are more imports,” he says. “But they are also holding on to old strategies. If they refuse to work with overseas partners, they will not become part of the global marketplace.”
Summer 2003