Vietnam Trade Measure Clears Hurdle

Sens. Elizabeth Dole, R-N.C., and Lindsey O. Graham, R-S.C., have dropped their opposition to
legislation granting Vietnam permanent normal trade relations (PNTR) in exchange for a commitment
that the US government will use its anti-dumping trade laws to protect the interests of US
manufacturers. The senators had placed a hold on Senate consideration of the legislation in an
effort to ensure that textile manufacturers would not be harmed when quotas are removed from
Vietnamese imports as a result of PNTR.

The senators praised Commerce Secretary Carlos Gutierrez and US Trade Representative Susan C.
Schwab for making a commitment for the US government to self-initiate anti-dumping actions against
market-disrupting imports. That commitment is particularly significant because the government in
the past has ruled that US textile manufacturers do not have standing in cases involving apparel
imports. As a result, textile manufacturers had been hampered in their efforts to combat a flood of
Chinese apparel imports, which they say is disrupting the market. So, while the commitment was made
in connection with the Vietnam legislation, they believe it could be applied to China as well.

“The North Carolina textile industry has good reason to be concerned about the PNTR for a
communist country that heavily subsidizes its textile and apparel sector,” Dole said. “I am pleased
that we were able to work with the textile industry and the administration to come up with a
procedure that will allow our industry to defend itself against unfair and harmful trade
practices.” Graham added that the changes will help the textile industry compete and will provide
some protection from unfair trade practices by Vietnam, which he said could have as much of an
impact on the textile industry as Chinese trade.

Cass Johnson, president of the Washington-based National Council of Textile Organizations,
said the action provides the US textile industry with a potent line of defense against unfairly
traded imports of apparel from Vietnam. He said the action establishes an important precedent and
could provide the US industry with a potent weapon in dealing with what the industry says are
unfair trade practices by China as well as Vietnam.

Johnson conceded PNTR for Vietnam would have passed both houses of Congress by the end of the
year by large majorities, and while his organization is still is opposed to it, the governments
commitments will be helpful down the road.

On the other hand, Laura E. Jones, executive director of the New York City-based US
Association of Importers of Textiles and Apparel, lashed out at the agreement, charging that US
textile manufacturers have been provided an end-run around US trade rules. Criticizing what she
called a secret deal between the senators and administration trade officials, Jones said the United
States has “pulled the rug out from under Vietnam.” She warned that if Vietnam is not shipping
apparel, its number-one export to the United States, “it is not going to be able to afford our
agriculture products and insurance.”

October 3, 2006