WASHINGTON — As Liz Claiborne Inc. pulled its sourcing out of Vietnam, U.S. textile lobbyists, importers and the Vietnamese government offered vastly different recommendations to the Bush administration last week on how to proceed with plans to monitor apparel imports from the country and possibly self-initiate antidumping trade cases.
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“We have advised our Vietnam vendors that we will not continue to source product from Vietnam,” said Francis Kelly, Claiborne’s vice president of international trade compliance and government affairs, in the company’s comments.
“Many of these vendors have manufacturing facilities in other Asian countries,” said Kelly. “Products reallocated from Vietnam will not be sourced from the United States or from the Western Hemisphere. Decades of quotas have not prevented the decline of the U.S. apparel industry. Actions such as monitoring, the threat of antidumping investigations or imposition of antidumping duties will not help bring manufacturing back to the U.S.”
Textile firms are looking for a broad monitoring program that has a better chance of restricting Vietnamese competition while importers begrudgingly said that, if there must be a program, it must be narrowly defined.
The Vietnamese Ministry of Trade, taking different approaches in two separate comments, said it was willing to work with the Bush administration to establish a monitoring system, but also described such a program as “overt discrimination” and in violation of global trading rules.
“The intention of establishing such [a] monitoring program has led to considerable uncertainty for not only Vietnamese textile and apparel manufacturers and exporters, but also the U.S. importers,” said the Ministry of Trade in its comments on the program to the U.S. Commerce Department.
Antidumping cases could cool imports from Vietnam by increasing costs through higher duties, meant to combat competition from unfairly priced imports. For the 12 months ending Oct. 31, Vietnam shipped 1.1 billion square meter equivalents of apparel and textiles to the U.S., valued at $3.4 billion.
U.S. textile groups maintain that Vietnam’s nonmarket economy gives producers in that country an unfair advantage, with dire consequences.
“Vietnam is currently subsidizing its textile and apparel sector through preferential interest rates, wage controls, rent holidays, export subsidies, preferential tax rates and direct investment from the Vietnamese government,” said Daniel LaPre, director of congressional relations of the American Manufacturing Trade Action Coalition.
The group suggested that, in addition to the types of apparel from Vietnam and China that are currently restrained by quotas, any product should be monitored where Vietnam is one of the top 10 suppliers to the U.S. or where it has more than a 1 percent share of the U.S. market of a particular product.
U.S. textile firms maintain they are hurt by Vietnamese apparel imports because the domestic industry produces materials that are shipped to nearby countries, such as those in Central America, and sent back to the U.S. as finished goods. Since they don’t make a product that is in direct competition with Vietnamese imports, textile producers don’t have the standing to bring antidumping cases — a problem the proposed program of monitoring and self-initiation would help them resolve.
Importers have seized on this dynamic and said the monitoring program should require the support of U.S. apparel manufacturers, a suggestion resisted in the comments submitted by Cass Johnson, president of the National Council of Textile Organizations.
“NCTO supports outreach to interested parties, but categorically opposes any preconditions of approval or support by U.S. apparel producers,” said Johnson. “Such a requirement would turn the monitoring or investigatory process into a bullying exercise where importing and retailing interests could use their dominant market power to force small apparel producers in the United States to oppose petitions.”
Two South Korea trade groups, the Korea International Trade Association and the Korean Apparel Industry Association, also voiced their concerns about the proposed program, since their members have investments in the Vietnamese apparel industry.
The two trade groups pushed for, among other things, “procedural safeguards” so interested parties have notice of how the program will work and will have time to offer their input.
“The proposal that the [Commerce Department’s] Import Administration self-initiate investigations essentially places the U.S. government in the position of plaintiff, judge and jury in any proceeding that is initiated,” the South Korean trade groups said in their comments. “Procedural safeguards, including…transparency, are absolutely essential to avoid the program becoming nothing more than a process of politicizing the decision-making process.”