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Textile News
James A. Morrissey, Washington Correspondent

Textile Industry Unhappy With Vietnam Agreement

By James A. Morrissey, Washington Correspondent

Rob Portman has unveiled a bilateral agreement that will pave the way for Vietnam's entry into the World Trade Organization (WTO). The pact came under immediate fire from US textile interests.

Portman announced an agreement in principal that would be a major step toward Vietnam's accession to the WTO. It calls for a reduction in tariffs and nontariff barriers on US industrial and agricultural products aimed at the Vietnam market. Hailing the pact as a historic step in our bilateral relationship, Portman said Vietnam recognizes the need for economic reform and liberalization.

Under the agreement, the United States agrees to remove all import quotas upon Vietnam's accession to the WTO in exchange for the removal of trade barriers to exports entering Vietnam. Textile lobbyists in Washington see the agreement as a victory for Vietnam at the expense of US textile workers and pledged a major effort with Congress to review options that will protect their interests.

Jim Chesnutt, president and CEO of New York City-based National Spinning Co. Inc. and chairman of the National Council of Textile Organizations, said, "The agreement is a victory for unbalanced and job-destroying trade policy and a severe blow to US textile manufacturers and their workers." He predicted a major flood of heavily subsidized imports that among other things could imperil the Central America-Dominican Republic Free Trade Agreement.

Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said the deal is a disaster for US manufacturing and the US textile industry in particular. He expressed the fear that the agreement will replicate the one with China, which he said has provided advantages to China that have enabled it to run roughshod over US companies.

While textile manufacturers voiced their concern over the agreement, Laura E. Jones, executive director of the New York City-based United States Association of Importers of Textiles and Apparel, hailed it as a historic pact that has tremendous benefits on two fronts. She added that importers will look to place more orders in Vietnam, providing American consumers with more choices, and the agreement will help create capital with which Vietnamese will be able to purchase more American goods and services.

Jones said the agreement will bring Vietnam under the rules of the international trading system, and its textile and apparel products will be controlled by multilateral rules and market forces rather than unilateral quotas. Vietnam's textile exports to the United States have been under quotas since May 2002. She said the agreement is transparent and reasonable, and it responds to the concerns of those who are worried about potential unfair trade advantages. Jones added it also helps to eliminate an atmosphere of uncertainty created by a threat of resumed quotas.

Vietnam currently is the seventh-largest supplier of textile and apparel products to the US market.

May 1, 2006