WASHINGTON — After more than a week of contention, the U.S. and Vietnam on Saturday announced an agreement setting limits on Vietnamese apparel imports, but the pact isn’t likely to please either domestic manufacturers or retailers and...
WASHINGTON — After more than a week of contention, the U.S. and Vietnam on Saturday announced an agreement setting limits on Vietnamese apparel imports, but the pact isn’t likely to please either domestic manufacturers or retailers and importers.
The agreement, which goes into effect on May 1 and tentatively ends Dec. 31, 2004, will allow quotas on 38 categories to increase 7 percent annually for cotton products and by 2 percent annually for wool. After that, the agreement continues until Vietnam becomes a member of the World Trade Organization, according to a summary.
In the first 12 months of the agreement, the quotas are expected to limit the value of Vietnamese apparel imports to $1.65 billion. Apparel and textile shipments from Vietnam in 2002 amounted to $952 million, according to Commerce statistics.
The U.S. moved to set limits on Vietnamese imports at the urging of the domestic textile industry. Mills have been alarmed at Vietnam’s steep increases in shipments, in some categories more than 1,000 percent, that threaten to fuel the country’s 3 percent share of the U.S. apparel import market.
Despite the new limits, the pact drew criticism from the domestic manufacturing camp.
"It was not a good agreement," said Jock Nash, Washington lobbyist for textile giant Milliken & Co., a founding member of the American Manufacturing Trade Action Coalition, which is fighting the administration’s aggressive free-trade policies. "We tried to raise the levels every which way from Sunday."
While retailers wanted less restrictions on imports, particularly in the key cotton categories, "this is a pretty balanced agreement," said Erik Autor, National Retail Federation vice president and international trade counsel. "The levels are such they will provide for continued trade with Vietnam."
In Hanoi, Reuters reported discontent among apparel industry officials there over the size of the agreement’s restrictions. Apparel and textiles are Vietnam’s largest export industry, next to oil.
Vietnam’s two largest apparel segments, cotton trousers and cotton knit shirts, are among the 38 categories of apparel to be controlled by quotas. Annual limits of 14 million dozen were set for cotton knit shirts and cotton trousers will be capped at 7 million dozen this year.Also contained in the pact is a clause allowing the U.S. to adjust Vietnam’s quotas if there is evidence of transshipment. During the talks with Vietnam, the U.S. discovered potential evidence that China may have used Vietnam’s quota-less status to channel Chinese-made apparel under a made-in-Vietnam label.
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