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U.S., Vietnam OK generous textile pact

The U.S. government has signed a textile trade agreement with Vietnam that, among other things, would allow Vietnamese manufacturers to ship at least one knit shirt for every adult in the United States in the coming year.

The agreement, which came after three weeks of difficult negotiations, is supposed to cap Vietnamese textile and apparel exports to the United States at $1.65 billion to $1.7 billion a year. But the American Textile Manufacturers Institute says the deal gives Vietnam the “most generous access” to the U.S. textile market ever granted.

“This unfortunate agreement is coming at a very difficult time for the American textile industry,” said Willis C. Moore III, ATMI chairman. “We are deeply dismayed that the U.S. government appears to have abandoned its commitments to the textile industry.

“By granting Vietnam the largest quotas in history for the most sensitive products made by this industry, the U.S. negotiators have ensured that more textile plants will close in the United States and more textile jobs will be lost in this deeply distressed industry.”

Pact as limiting

Officials with the U.S. Trade Representative's office said that without the quota agreement, Vietnam's textile exports to the United States, which grew from $49 million in 2001 to $952 million in 2002, would have exceeded the new quota levels by the end of 2003.

Several large U.S. manufacturers and retailers, including Nike, Gap and K-Mart, sent letters to U.S. Trade Representative Robert Zoellick urging him not to impose quotas on Vietnamese exports.

But ATMI's Moore said the quotas for a wide range of textile and apparel products far exceed any reasonable level for a single country.

“This agreement trades away good paying American jobs to a communist country so that importing interests can save pennies per garment,” he said. “Make no mistake, these quotas are enormous — just one of them sets the knit shirt category at 164 million shirts, or one for every adult person in the United States.”

Moore said the new quota agreement provides Vietnam with import quotas amounting to more than 600 million square meters, an increase of 625 percent from the 83 million square meters of textile and apparel products Vietnam was shipping when the U.S. government announced it wanted to negotiate quotas last September.

More job losses

“In their efforts to get Vietnam to sign an agreement, our negotiators literally doubled and tripled the quota offers they had made just two months ago,” said Moore. “This was after they acknowledged that Vietnam's government-owned and subsidized textile sector posed a potent threat to our workers.”

The agreement came only a few days after the U.S. government reported that the textile industry had lost another 2,900 jobs in February following a sharp drop in industry sales. Over the last two years, the industry has closed more than 150 textile mills and lost more than 90,000 jobs.

ATMI officials seemed especially bitter over what they called a betrayal of promises made by senior administration officials to work with them to prevent the demise of the U.S. textile industry.

“It is increasingly hard for this industry to reconcile the government's action with the words of Commerce Secretary Don Evans 14 months ago when he stood before us and said, ‘We know what you're going through. Know that the textile industry now has a friend in Washington,’” said Moore.

Moore also expressed disappointment that the Office of the U.S. Trade Representative had allowed Vietnam to delay the completion of the negotiations while it built up higher levels of textile shipments.

“This agreement breaks with a 40-year plus history of the U.S. textile program by awarding Vietnam quotas based on current trade rather than on base levels set during the initial negotiation,” he noted.

Delay tactic works

“Despite repeated assurances by U.S. negotiators that Vietnam's tactic of delaying negotiations in order to build ever higher quota levels would not succeed, the new agreement includes all of the trade that Vietnam built up through negotiating delays and even includes hefty increases, ranging from 10 percent to, in one case, 60 percent.”

That resulted in the U.S. providing quotas for woven trousers and knit shirts, the U.S. textile industry's most sensitive products, for the equivalent of $1.1 billion or more than half of what ATMI amounts to $2 billion in access to the U.S. market.

“At 164 million shirts, the Vietnamese quota for cotton knit shirts is larger than those of China, Thailand, Bangladesh, Cambodia and the Philippines combined,” said Moore. “The quota is nearly three times the U.S. offer made just two months ago.

“The quota for cotton woven trousers is 84 million trousers, or one pair of trousers for every adult male in the United States. It is bigger than the combined quotas for China, India, Thailand and Pakistan and more than twice the size of the U.S. offer made just two months ago.”

The agreement is scheduled to run through December 2004 but could be extended annually while Vietnam seeks admission to the World Trade Organization, a move it expects in 2005.

It calls for the Hanoi government to permit inspection of Vietnamese factories to confirm production claims in the wake of evidence that China has been transshipping textile and apparel products through Vietnam to the United States. Vietnam has also committed to abide by international rules regulating the use of child labor.

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