WASHINGTON — Senate Finance Committee chairman Chuck Grassley said the issue of a possible textile safeguard amendment looms over legislation that would give Vietnam permanent normal trade relations status.

Grassley (R., Iowa), a proponent of the measure granting Vietnam the designation as a precursor to joining the World Trade Organization, said he would move to limit the number of amendments. He discussed Vietnam and outlined the Senate’s potential legislative agenda with reporters Wednesday after the committee passed the U.S.-Oman Free Trade Agreement on a 10-3 vote and sent it to the Senate floor.

A move to attach a textile safeguard amendment to the Vietnam trade relations bill “is very much a possibility,” Grassley said. A decision on when to bring the legislation to the floor “is dependent on some compromise” to ensure that the legislation doesn’t become a vehicle for a flood of amendments on related issues.

The finance committee could schedule a hearing on Vietnam legislation as early as the second week in July, after Congress returns from a weeklong Fourth of July recess, Grassley said.

The domestic textile industry is pressing for a change to the bilateral deal the U.S. and Vietnam reached at the end of May that lays out the accession terms for Vietnam’s WTO entry. The pact contains an enforcement mechanism that allows the U.S. to reimpose apparel and textile quotas for a year if Vietnam does not abolish all “prohibited” subsidies to those industries before joining the global trade body.

The American Manufacturing Trade Action Coalition, the National Council of Textile Organizations and several House textile-state lawmakers contend the accession agreement is inadequate because it does not contain a built-in textile safeguard — similar to one in China’s WTO entry pact — or extend existing apparel and textile quotas, which will be eliminated when Vietnam joins the WTO.

Importers oppose the textile industry’s attempts to add a safeguard or extend existing quotas.

Grassley said he has not decided whether he will seek to keep the bill clear of amendments and plans to hold discussions with senators before he makes a decision. He stressed there is broad bipartisan support for permanently normalizing trade with Vietnam and allowing the Southeast Asian nation’s entry into the WTO.

This story first appeared in the June 29, 2006 issue of WWD. Subscribe Today.

The Bush administration hopes to have Congressional passage of such legislation before the President travels to Hanoi for the Asia-Pacific Economic Cooperation summit in November.

Grassley said the Senate will most likely take up pending trade deals in the following order: Oman, Peru and then Vietnam, but he did not set a timetable. His committee will hold a hearing on the Peru FTA today.

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