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Report Fuels Scrutiny of Vietnam Apparel Imports

A new report is recommending closer Congressional scrutiny of a Bush administration monitoring program for Vietnamese apparel imports.

WASHINGTON — A new report is recommending closer Congressional scrutiny of a Bush administration monitoring program for Vietnamese apparel imports.

The administration launched the initiative — opposed by importers and backed by domestic textile firms — in January to determine whether Vietnamese apparel imports are being dumped in the U.S. market for less than the cost of production or below the sale price in their home market.

The move came at the urging of textile-state elected officials and producers who contend that Vietnamese imports are subsidized by the government, putting U.S. producers at a competitive disadvantage now that quotas have been removed on Vietnam’s imports.

In its first biannual review this year, the Commerce Department, which oversees the monitoring initiative, decided against launching an antidumping case, which could have led to punitive tariffs on apparel imports.

The new report by the Congressional Research Service, an arm of Congress, suggested seven areas that lawmakers might examine to determine whether the program is legal and viable. The 40-page analysis said Commerce’s review “provided little resolution or clarity to a number of questions raised about the authority and the necessity of establishing such a monitoring program.”

Importers were heartened by the agency’s findings and suggestion that Congress could “revisit” the question of the Commerce’s “legal authority” to establish the program. The agency also suggested that Congress could analyze importers’ claims that the monitoring program has “stunted trade” with and investments in Vietnam.

“It definitely has things that bolster some of our main argument as far as the negative impact on trade [forcing importers to shift business to other countries due to the uncertainty] and the question about statutory authority,” said Erik Autor, vice president and international trade counsel at the National Retail Federation. “It helps us make our case that the program should be scrapped.”

A recommendation cited by the domestic textile industry said Congress could pass legislation “designed to counteract perceived unfair trade practices by Vietnam” in its apparel exports to the U.S. The report said Congress could pass legislation making it easier to initiate antidumping or countervailing duty cases involving nonmarket economies such as Vietnam and China.

“I think it raises the point that the government explicitly recognizes Vietnam as a large, state-owned and state-subsidized textile and apparel sector that distorts trade and harms domestic manufacturers,” said Cass Johnson, president of the National Council of Textile Organizations.