Women’s Wear Daily
04.20.2014
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fashion-features

Debate Builds on Vietnam WTO Bid

A trade battle over Vietnam's 11-year effort to join the World Trade Organization is flying just below the radar in Washington.

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WASHINGTON — A trade battle over Vietnam's 11-year effort to join the World Trade Organization is flying just below the radar in Washington.

The stakes are high for the apparel and textile industry and lobbyists on both sides are mustering their forces.

Domestic textile producers fear Vietnam's entry into the WTO would eliminate its quotas, unleashing an apparel and textile industry supported by a managed currency and subsidies from Vietnam's Communist government. The U.S. industry is pushing for the Bush administration to make safeguard quotas, similar to those levied on China last year, a condition of Vietnam's accession to the global trade body.

"It's ludicrous to expect that they're going to make substantial reform and modification at a reasonable pace toward an open market economy if we give them accession to the WTO," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. "That should be the carrot that is used to, in essence, force them to adopt a more open trading environment or a more market-based economy."

Importers, denying the utility of safeguards in protecting the domestic industry and remembering the headaches of working under them in China, fear their inclusion in any Vietnam deal.

"There is a great deal of industry concern on both sides of this issue," said Scott Quesenberry, special textile negotiator in the U.S. Trade Representative's office, who spoke at the WWD Sourcing Leadership Forum earlier this month.

"To say whether it's going to happen is way premature," he said of the possibility of a textile safeguard in Vietnam's accession agreement.

Even though restrained by quotas since 2003, Vietnam's imports to the U.S. rose 5 percent last year to 950.6 million square meter equivalents, worth $2.9 billion, making it the 12th-largest supplier of apparel and textiles to the U.S.

Where U.S. textile firms see shades of China in Vietnam, importers see an opportunity to diversify their sourcing in Asia.

"They don't have the same number of people, the same number of facilities," said Brenda Jacobs, counsel for the U.S. Association of Importers of Textiles & Apparel, comparing Vietnam to China. "They don't have the same level of vertical integration. They're not going to make the same wide range of products."

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