Contact:  Cass Johnson: 202-822-8025                                                                August 30, 2006
                Missy Branson:  202-822-8026

Vietnam Now Second Largest Supplier to U.S. Market in Quota-Free Apparel Categories

Subsidized Apparel Exports from Vietnam Now Fastest Growing of Any Country

Final WTO Agreement Must Allow U.S. Industry to Defend Itself
 
Washington DC) New trade figures published by the U.S. Commerce Department reveal that during the first six months of the year, apparel exports from Vietnam grew faster than any other major supplier (including China) as Vietnam cut deeply into exports from NAFTA and CAFTA countries.  Vietnam boosted its apparel exports by 30.4% from Jan-June 2006, or by $359 million.  Apparel exports from CAFTA countries and Mexico fell by 14 percent during the same period of time.  The increase from Vietnam was all the more remarkable because most of Vietnam’s apparel exports remain under quota control.

Commerce Department data also confirm that Vietnam has now become the second largest supplier, after China, in apparel products which have been removed from quota control.  Vietnam displaced Mexico and the CAFTA countries – the number two and three suppliers – by increasing its exports $950 million, or 1,186% in quota-free categories over the past five and half years.  Exports from Mexico and the CAFTA countries of apparel made primarily from U.S. yarns and fabrics dropped by $651 million or 36% during the same period of time.

NCTO President Cass Johnson noted, “This new trade data confirms what Vietnam itself has already predicted – that once quotas are removed, Vietnam’s state-owned and subsidized textile and apparel sector will wreak havoc in this industry and in the NAFTA/CAFTA region.  Over 2.2 million jobs in the Western Hemisphere depend on textile and apparel trade.  It is very difficult for our industry to understand why the U.S. government signed a bad agreement with a communist country that puts these jobs at risk and that leaves us completely defenseless against these subsidized imports.”

Johnson continued, “The worst kind of trade policy is one that rewards bad actors and leaves U.S. jobs and U.S. producers defenseless.  Vietnam encapsulates this approach perfectly because under the U.S.-Vietnam bilateral agreement, the U.S. textile industry has no way to fight back against subsidized and dumped apparel exports.  Under this agreement, we are not allowed to take dumping, countervailing duty or safeguard cases against Vietnam once it enters into the WTO.  The Vietnamese government can continue subsidizing its industry while our government tells us to simply close our plants and lay off our workers.”

“Trade policy is in crisis today because most Americans feel that trade agreements cost U.S. jobs.  While the government argues that many U.S. sectors will gain access to the Vietnamese market, it does not mention that these gains will be small compared to U.S. textile job and production losses, and when you include the impact this will have on the entire hemisphere, well the losses are staggering.”

“In testimony before the Senate Finance Committee, USTR Ambassador Bhatia noted that Vietnamese tariffs will be cut on “key U.S. exports” such as autos, motorcycles, computers, medical equipment, telecommunications equipment, chemicals, cosmetics and pharmaceuticals.  According to Department of Commerce trade figures, not one of these “key” export sector totals more than $30 million.  Vietnam, however, predicts its textile and apparel exports to the United States will increase by billions of dollars once the U.S. removes quotas.”

Johnson concluded, “The U.S. government should not repeat the mistakes it make with China PNTR.  In the final multilateral talks underway on Vietnam’s WTO accession package, the U.S. government must insist that the U.S. textile industry is given the right to defend itself against unfairly dumped and subsidized exports from Vietnam.”