The US and Vietnam have agreed to a one-year extension of their textile and apparel bilateral
textile quota agreement. The new pact, which will run through 2005, has a special provision that
will permit Vietnam this year to borrow up to 8 percent of next year’s quota. That provision will
be helpful to US importers who have already used up much of this year’s quota. During the first
seven months of this year, Vietnam’s exports to the United States amounted to $2.5 billion.
US textile manufacturers have been strongly opposed to the Vietnam agreement ever since it
was negotiated in April 2003. They charged that many of the products used to help determine the
base for establishing quotas were not made in Vietnam. Following a thorough investigation, the US
Customs Service determined that was the case, and it levied a penalty reducing the quota by 2.5
percent. That set off a strong protest from US textile manufacturers who charged that the extent of
the problem was much larger, but no further action was taken.