Industry Urges Tough Stance on Vietnam

Industry lobbyists urged House Textile Caucus members for restrictions on apparel and textile imports from Vietnam as it seeks to join the WTO.

WASHINGTON — Textile industry lobbyists urged House Textile Caucus members Tuesday to push for continued restrictions on apparel and textile imports from Vietnam as that country seeks to join the World Trade Organization.

U.S. and Vietnamese trade negotiators are meeting here this week for what could be the final round of direct talks to achieve a bilateral agreement before the WTO considers Vietnam’s membership. The subsidies that Vietnam uses to support its manufacturers will figure into the talks, which started Tuesday and are scheduled to run through Thursday, said a U.S. trade official who briefed reporters on condition of anonymity.

“There have been a lot of questions raised about the situation, particularly with respect to the kind of support they provide to their textile sector,” said the official. “We are going to continue to work with Vietnam to try to understand if there are subsidies, what they are and if they are prohibited or illegal subsidies under the WTO rules, and how they intend to deal with them.”

To join the WTO, Vietnam has to wrap up direct negotiations with the Bush administration, be granted Permanent Normal Trade Relations status by Congress and complete multilateral talks with the WTO, when the issue of subsidies might come up again.

“I’m assuming that other people have concerns about Vietnam’s subsidy programs, as well,” said the U.S. trade official. “I assume that the Europeans have problems with their subsidies…given the fact that they’ve just slapped some dumping duties on their footwear.”

Lobbyists with the American Manufacturing Trade Action Coalition and National Council of Textile Organizations briefed the staffers of several caucus members and discussed a letter they plan to send to U.S. Trade Representative Rob Portman and Deputy U.S. Trade Representative Susan Schwab. President Bush last month nominated Schwab to succeed Portman, who has been tapped to be director of the Office of Management and Budget.

A Congressional aide, who attended the briefing but requested anonymity, said the letter would press the administration to either push Vietnam for stricter limits than the ones now in place on apparel and textile imports to the U.S. or negotiate a special textile safeguard similar to the one China agreed to when it entered the WTO. A safeguard would allow the industry to apply for restrictions on imports on a category basis when surges occur.

This story first appeared in the May 10, 2006 issue of WWD.  Subscribe Today.

Textile-state lawmakers also plan in the letter to urge the administration to support a separate textile sectoral in the current round of global trade talks.

“The domestic textile industry does not have any confidence the WTO will hold Vietnam’s feet to the fire [to uphold commitments on eliminating subsidies], so they are asking the administration to get the commitments up front,” said the aide. “There is definitely a sense of urgency because by midsummer, the game could be over.”

Cass Johnson, president of NCTO, said he was concerned that the U.S. government would not be able to find all of Vietnam’s subsidies.

“It’s clear now that goods from Vietnam are enjoying the benefits of huge subsidies, you can see that in their prices,” Johnson said. “We’re going to need a restraint or quotas until we begin to see their prices reflect market realities.”

A proposal for safeguards similar to those China agreed to has not been put on the table and is unlikely, said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel.

“When it came to the China negotiations, all of the other countries wanted to have a safeguard mechanism to deal with the imports from China,” Hughes said. “No other country asked for a special safeguard on Vietnam.”