WASHINGTON — Republican and Democratic lawmakers joined U.S. Trade Representative Susan Schwab on Capitol Hill Tuesday to roll out legislation in Congress that would grant Vietnam permanent normal trade relations status, one of the last major hurdles for membership in the World Trade Organization.
Industry import and retail groups came out to show their support for Vietnam, which exported $2.9 billion in apparel and textiles to the U.S. last year and has been an important sourcing platform for their businesses.
In a separate development, 44 House textile-state lawmakers sent a letter to Schwab opposing the U.S.-Vietnam agreement that was reached as a precursor to the trade legislation. The pact set terms for Vietnam’s WTO membership but did not include an extension of existing apparel and textile quotas or a special textile safeguard similar to one with China.
The House members, including the entire North and South Carolina delegations, wrote, “Failure to address these two critical concerns [a safeguard for Vietnam and a separate textile sectoral in the global round of trade talks] will substantially impact our view of the administration’s legislative trade agenda from this point forward.” The members stopped short of saying they would oppose the legislation normalizing trade relations.
Sens. Max Baucus (D., Mont.) and Gordon Smith (R., Ore.) led a bipartisan group of eight senators, including John McCain (R., Ariz.), John Kerry (D., Mass.) and Chuck Hagel (R., Neb.), in introducing the bill that would give normal trade status to Vietnam.
“Granting permanent normal trade relations status to Vietnam will complete the process of reconciliation begun 15 years ago and worked for by Democrats and Republicans alike on Capitol Hill and in the White House,” Baucus said at a news conference. “I will work hard to secure passage of this legislation by the August recess.”
Reps. Jim Ramstad (R., Minn.) and Mike Thompson (D., Calif.) introduced the legislation in the House with more than 30 bipartisan co-sponsors.
“This is a clear vote in favor of a fair trade mood and one that will resonate,” Schwab said.
Retailers and importers have been lobbying Congress to pass the legislation without any amendments, while the domestic textile industry is pushing for a change to the WTO bilateral deal the two countries reached last month. The accession pact contains an enforcement mechanism that will allow the Bush administration to reimpose apparel and textile quotas for a year if Vietnam does not abolish all “prohibited” subsidies to those industries before joining the WTO or within a year of joining.
In addition to getting permanent normal trade relations status, Vietnam must complete multilateral talks within the WTO.
“Everyone expects the potential for this to be more of an issue in the Senate, but I think there is a lot of Senate support for this,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel. “This is not a free trade agreement and we are not giving them preferences. We are merely doing what we need to do to get Vietnam into the WTO to open up its market and follow the rules of trade.”
Erik Autor, vice president and international trade counsel of the National Retail Federation, said, “We are fairly confident [that] when this comes up for a vote in the House and Senate, it will pass by a comfortable majority.”
Textile officials are considering the legislative options to change the bilateral accession agreement with Vietnam.
“We’re not going to foreclose any options,” said a spokesman for the American Manufacturing Trade Action Coalition.
The industry and Congressional supporters are considering at least two options for an amendment, including one that would require U.S. trade officials to renegotiate the deal with Vietnam and secure a safeguard for textiles and apparel or an extension of existing quotas. Another would change U.S. trade-remedy laws to make it easier for the textile industry to file unfair trade practices cases against countries like Vietnam and China.