Action Needed to Stop Flawed Vietnam Agreement

May 19, 2006 - According to Karl Spilhaus, president of the Northern Textile Association, the United States and Vietnam reached an agreement in principle for the terms under which Vietnam will join the World Trade Organization (WTO). Reports of the agreement indicate that it likely fails to adequately address the crucial issues of Vietnam's state subsidies of its textile and apparel industries and the dire need for an effective safeguard mechanism. Such a flawed agreement will be damaging to the U.S. textile industry.

In 2005, the United States imported 801 million square meters of apparel from Vietnam, making it the sixth larger apparel supplier to the United States (4 percent of all imports of apparel were from Vietnam). Currently the United States has quotas on many textile and apparel articles of Vietnamese origin and the high utilization rate of those quotas indicates that Vietnam has the capacity, in the absence of quotas, to greatly increase shipments to this country.

As a member of the WTO, Vietnam will no longer be subject to U.S. textile and apparel quotas. Also, Vietnam would be a beneficiary of any future U.S. tariff reductions as part of the on-going Doha Round of trade talks.

Spilhaus requests members to contact their senators and representatives to let them know that we must oppose the Vietnam accession agreement unless it has a meaningful textile safeguard procedure in the agreement, like those used to effect against China when that nation threatened to disrupt our textile market when quotas were removed. It is unfair to force our textile industry to compete with the state-subsidized industry of Vietnam.