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China, Vietnam Imports Continue Surge

China and Vietnam had a viselike grip on apparel and textile trade in January, and U.S. trade officials were once again put on the hot seat.

Imports from China and Vietnam shot ahead 156 percent versus January 2002.

Imports from China and Vietnam shot ahead 156 percent versus January 2002.

WWD Staff

WASHINGTON — China and Vietnam had a viselike grip on apparel and textile trade in January, and U.S. trade officials were once again put on the hot seat.

The two Communist countries controlled a combined 71 percent of all apparel and textile import growth in the U.S. last month, far outpacing the entire Caribbean Basin region and Mexico, which together did not account for any of January’s import growth, according to the Commerce Department’s monthly trade report released Wednesday.

The 24 Caribbean Basin countries and Mexico actually lost 6 million combined square meters equivalent in January against a year ago, while China and Vietnam grew a combined 156 percent to 688 SME in the month against January 2002.

For the year ended Jan. 31, China, the top supplier of apparel and textiles to the U.S., had a 13.7 percent share of all imports, while Vietnam, the 23rd-largest supplier, had a 1.1 percent share. At the pace Vietnam is growing, it could surpass Guatemala next month and match Cambodia’s trade if it grows at the same rate.

Apparel and textile imports from around the world surged 20.8 percent. Textile imports grew 23 percent to 1.86 billion SME in January against a year ago, while apparel imports rose 18.2 percent to 1.56 billion SME.

The explosive growth comes at a time when the U.S. is scheduling a second round of bilateral textile and apparel negotiations with Vietnam, which is now slated for early April, while it simultaneously considers a separate request to place quotas on certain imports from China.

Domestic textile producers are furious that the government has not yet acted to restrain China and Vietnam, but importers continue to oppose any limitations. The domestic industry claims the imports hurt not only their industry but also business in the Caribbean and in Mexico, which are big buyers of U.S. yarn and fabrics.

“The situation is totally out of control,” said Charles Bremer, vice president of international trade at the American Textile Manufacturers Institute. “I’m beginning to think our textile trade policy is run by a bunch of masochists, but the only problem is we are the ones getting punished.”

The ATMI made a request last July to reimpose quotas on five categories from China, including bras, dressing gowns, gloves, manmade-fiber luggage and knit fabric. The Commerce Department’s Committee for the Implementation of Textile Agreements is reviewing the request, which was filed under a special deal China made to secure membership in the World Trade Organization.

The ATMI and other domestic industry trade and lobby groups are also calling for immediate action on Vietnam, which is still a small supplier of apparel and textiles to the U.S., but is becoming a major unrestrained supplier in several apparel and textile categories. Retail and import trade and lobby groups argue strongly against placing quotas on products from Vietnam or reimposing quotas on products from China. The key point in their argument is that imports from both of these countries are taking market share away from other Asian suppliers and not from the domestic textile industry.

“The domestic industry wouldn’t get this business [in Vietnam and China] in the first place,” said Erik Autor, vice president of international trade counsel at the National Retail Federation. “If the business isn’t going to Vietnam [because of quotas the U.S. imposes], then it will go to China.”

Jim Leonard, chairman of CITA and deputy assistant secretary for textiles, apparel and consumer goods industries at Commerce, said the group is working diligently on both the Vietnam bilateral pact and the China textile safeguard procedures. He said, emphatically, that CITA is not dragging its feet on either issue.

“I know the domestic industry is unhappy about the time it has taken us to put the [China safeguard process] together, but all I can say is we are working on it,” Leonard said.

CITA plans to first publish procedures on textile safeguard requests against China, in terms of criteria and who has the right to file a request, before it makes a decision on the ATMI’s request, he noted.

“We feel it is important for the process to be transparent and it has taken a while to do so,” said Leonard, in defense of complaints to the contrary from both sides.

On the status of the bilateral textile and apparel negotiations with Vietnam, Leonard said the U.S. tabled a proposal last month and is currently waiting for a counterproposal from Vietnam.

“We have a bilateral [textile and apparel] agreement with most major textile and apparel exporters to the U.S.,” said Leonard. “Vietnam is, in some categories, sending a whole lot more product to the U.S. than a lot of countries with whom we have bilateral agreements.”

He refused to characterize progress on the negotiations, although he noted the U.S. had to cut short the first round of negotiations in Hanoi last month due to weather that delayed the delegation.

“We’ll make a judgement on how negotiations are going and we have the right to impose unilateral quotas if it appears that Vietnam isn’t willing to move the negotiations along,” Leonard said.

Meanwhile, calls on Capitol Hill have increased for the Bush administration action to curb growth.

“With Chinese textile imports surging to historic levels, the rules of the trade game with China clearly must change,” GOP lawmakers from the House Textile Caucus recently wrote administration trade officials.

In addition, caucus members are urging a speedy completion of negotiations with Vietnam and want a Customs investigation of Vietnamese imports due to its history of transshipments.