Vietnam Pact Doesn't Please Importers, Manufacturers

ASEAN News
By James A. Morrissey,Washington CorrespondentVietnam Pact Doesn't PleaseImporters, Manufacturers
Following the longest face-to-face negotiation in the history of the US government’s textile trade program, the United States and Vietnam have reached a textile and apparel bilateral agreement that in the end doesn’t really please anyone. The pact was sharply criticized by the American Textile Manufacturers Institute (ATMI) and the National Textile Association (NTA) as an abandonment of the Bush administration’s pledge to protect the interests of the US textile industry and its employees. Retailers and other textile and apparel importers were strongly opposed to any quotas on Vietnam, as they view that area as a “viable alternative” to becoming too dependent on trade with China and other Asian nations. In spite of that, however, the National Retail Federation (NRF) said the agreement certainly was better than the unilateral quotas that would have been imposed if a bilateral agreement could not be reached.Importers said Vietnamese apparel imports will displace other Asian trade and should not have any impact on US textile trade with Mexico and the Caribbean.The agreement runs until December 31, 2004, and will automatically roll over annually until Vietnam becomes a member of the World Trade Organization (WTO), at which time all quotas will be removed.As the negotiations neared their final stage, 35 of the nation’s largest retailers, including JCPenney, Sears, Target and Gap, descended on Washington in a massive lobbying effort to voice their concerns about restricting a major source of products, which could result in shortages and higher consumer prices.On the other side of the battlefield, members of the Congressional Textile Caucus weighed in heavily and accused US negotiators of offering quotas that were far in excess of what was offered in the opening round of talks. They said US government officials were “actually rewarding Vietnam for refusing to bargain in good faith during earlier negotiations.” In addition, ATMI, NTA and members of the caucus charged that the new quota levels “include significant levels of fraud” resulting from illegal transshipments of Chinese goods through Vietnam. The agreement covers 38 product categories and initially will permit $1.65 billion worth of imports, including 14 million dozens of knit shirts, and 1 million pairs of men’s and women’s trousers — two categories that were of particular concern to the textile industry during the negotiations. Quotas will be permitted to grow 7 percent per year for all products except wool, which will grow at 2 percent.With respect to market access, Vietnam agreed to bind its tariffs at 7 percent for yarn, 12 percent for fabric, and 20 percent for apparel. It also agreed to refrain from utilizing non-tariff barriers. ATMI Chairman Willis C. Moore III said he was “deeply dismayed” by the agreement, adding that “by granting Vietnam the largest quotas in history for the most sensitive products made by our industry, negotiators have ensured that more textile jobs will be lost in this deeply distressed industry.”
June 2003