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Textile Group Opposes Vietnam Free Trade Agreement

James A. Morrissey, Washington Correspondent

The National Council of Textile Organizations (NCTO) has issued a strong appeal to the Obama  administration not to include Vietnam in a proposed Trans-Pacific Strategic Economic Partnership Agreement (TPP), claiming that including a non-market economy raises "serious concerns in the US textile industry."

The proposed regional TPP would incorporate include free trade agreements (FTAs) with Singapore, Chile, New Zealand, Brunei Darussalam, Australia, Peru and Vietnam. The United States already has FTAs with Singapore, Chile, Australia and Peru, and all of these include a yarn forward rule of origin that has been supported by US manufacturers. Adding New Zealand and Brunei Darussalam to the mix would not be particularly controversial, but adding Vietnam is.

In a filing with the US Trade Representative's (USTR's) policy committee, NCTO President Cass Johnson questioned both the policy and the process being used in connection with the proposal that was initiated during the waning days of the Bush administration. From a policy standpoint, Johnson said, it would be the first time the US government has proposed a FTA with a non-market economy. He said non-market economies are considered to be  "particularly dangerous" to free market economies and their workers because of their ability to control prices, production and export targets. He  noted that the US Department of Commerce has said such market economies are characterized by lack of currency convertibility, government wage rates, government ownership and control of land and banks, and control of the direction of key sectors of the economy.

"According to these criteria," Johnson said, "Vietnam clearly remains a non-market economy." He believes a FTA with a communist country "undermines the premise of US foreign policy that trade will lead to political liberalization."

In addition, Johnson questioned the process being used to move the proposal forward, claiming that the USTR staff is acting before  a USTR has been appointed and, therefore, there is no political oversight over its actions. He urged the new USTR, when confirmed by the Senate, to reverse the Bush administration's late-term initiative by either declining to participate in the TPP negotiations or requiring that Vietnam withdraw.

USS trade officials have asked their counterparts to delay the March 30 planned negotiations on the TPP because the USTR and other officials have not yet been confirmed.

March 3, 2009