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Deal Limits Vietnamese Imports

April 27, 2003|From Associated Press

WASHINGTON — The Bush administration announced a deal Saturday to limit Vietnam's shipments of textiles and clothing to the United States, responding to complaints from American manufacturers about a flood of cheap imports.

The agreement, to take effect May 1, will place quotas on 38 categories of clothing and textiles. It is aimed at controlling a surge of shipments from Vietnam since the United States and its former enemy normalized trade relations in December 2001.

Clothing and textile shipments from Vietnam to the United States went from $49 million in 2001 to $952 million in 2002, according to U.S. government figures. Vietnam has become America's sixth biggest foreign supplier of clothing.

While those shipments represented a bonanza for American consumers of knit shirts, pants and other items, the beleaguered U.S. textile and apparel industry complained about a flood of cheap imports.

The agreement followed more than a week of intense negotiations in Washington.

It places quotas based on volume of shipments on the 38 categories involved and is expected to limit shipments for the first 12 months of the agreement to $1.65 billion, far below what shipments from Vietnam probably would have totaled this year had they not been capped.

While U.S. textile companies complained that the agreement was too lenient, the Vietnamese industry complained that it had been forced to accept it.

"We are totally unsatisfied," said Le Quoc An, chairman of Vietnam Textile and Garment Corp., the country's largest textile manufacturer. "They threatened to unilaterally impose the quotas if Vietnam did not agree."

U.S. trade officials, who briefed reporters Saturday on condition their names not be used, said the agreement simply brought textile trade with Vietnam into line with other developing countries already under quotas as part of rules set out by the World Trade Organization.

Quotas faced by China and other nations are set to expire at the end of 2004, but the quota agreement the U.S. reached with Vietnam has a clause that will automatically continue quotas each year until Vietnam becomes a member of the WTO.

The agreement says quotas in most categories will be increased by 7% annually as long as they are in effect.

The boom in Vietnamese textile and clothing shipments occurred last year because the high Smoot-Hawley tariffs that Vietnam had faced as one of the few countries lacking normal trade relations with the U.S. dropped to the much lower tariff levels in effect for other trading partners.

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