NCTO Dismayed by Customs Results
on Vietnam
- With Jobs on the
Line, Industry May Seek GAO Investigation
-
(Washington
DC)
– According to press reports, after spending a year
investigating allegations of Vietnamese textile and
apparel transshipments, the
U.S.
government announced yesterday that it will only reduce
Vietnamese quotas on textile and apparel by 2.5
percent.
NCTO President Cass
Johnson
noted the American textile industry’s disappointment
with the investigation’s outcome in the following
statement:
The
government’s action flies in the face of available
evidence, and it now appears that substantial illegal
shipments will be officially included in
Vietnam’s
quota levels.
That means more market access for textile and
apparel imports from
Vietnam
and thus fewer orders, less production and even more
lost jobs here in the
United
States. While we are
disappointed in the Administration’s action on
Vietnam,
we do want to recognize and applaud the efforts of our
supporters in Congress, who have been diligent in their
pursuit of a thorough and transparent
investigation.
The
facts are these:
A General Accounting Office (GAO) report last
year revealed that, when Customs takes the time to open
containers, it finds an average fraud rate of 27
percent.
The GAO report also revealed that, on average,
one-half of the overseas factories visited by Customs
are found to be at serious risk of transshipment. And a
Customs analysis received by NCTO earlier this week
found that 81 percent of the apparel factories recently
visited in Hong Kong, 44 percent of those visited in
Egypt and 87 percent of those visited in South Africa
were suspected of being used to illegally
transship.
With
this level of fraud occurring around the world, it is
hard to understand how Vietnam, a country with a history
of corruption and one which staged an import increase so
large that many considered it physically impossible to
achieve, has apparently ended up with the cleanest
record of any major exporter in Asia.
During
the year that the contested shipments took place,
Vietnam’s
exports of textiles and apparel increased by the
equivalent of 700 million shirts (approximately 350
million square meters). An increase in
production
of 700 million shirts in just twelve months’ time – a
ten-fold increase over the previous year – is an almost
unbelievable figure for a country of that size. And yet the
U.S.
government would have us believe that 97.5 percent of
this trade was legal and made in
Vietnam,
and that virtually none of it came from
China,
a country which shares a long land border with
Vietnam
and which Customs tells us is responsible for more than
90 percent of all transshipments occurring today.
(cont.)
May
13, 2004
Page
2 of 2
Transparency
International, the world corruption monitoring body, has
declared that
Vietnam
is one of the world’s most corrupt countries to do
business in.
And it is also interesting to note that, last
June, the Textiles Committee of the Hong Kong Chamber of
Commerce, a group that knows something about
transshipments, declared that
Vietnam
could not have produced
the quantities of textile goods it was claiming, and the
Hong Kong Chamber group warned that a “new chapter in
transshipments” was opening.
Despite
efforts by Representative Richard Burr and others in
Congress, this
U.S.
government investigation has been shrouded in
secrecy.
The American textile industry repeatedly sought
to discover what standards the government was using, how
detailed the investigation was and what level of
resources were being applied. Our concerns
were heightened in January, when the GAO published the
results of a nine-month investigation of Customs’
efforts in curbing illegal textile and apparel
transshipments.
Those GAO findings revealed major problems at
almost every level of Customs’ efforts on the textile
and apparel transshipment front.
The
domestic textile industry and our workers still need to
know the facts behind this result. Some of the
questions we are still asking are:
1) What percentage
of trade do the “nearly” 100 factories visited
represent?
2) On what
basis were those factories chosen?
3) What were the
results from those particular
factories?
4) How did
Customs extrapolate the results from those factory
visits to the rest of textile and apparel trade?
5) What standards
were used to determine whether a product was actually
produced in Vietnam?
These
are not merely academic questions. Hundreds of
thousands of jobs in the
United
States
depend on how thoroughly and how carefully Customs does
its work and thwarts illegally traded imports. Given the less
that stellar results of recent investigations of Customs
activities, the
U.S.
textile industry needs to be assured that this
particular investigation was thorough, comprehensive and
well-managed.
If
we cannot be assured of that, NCTO may seek a GAO
investigation of this result.
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