Exporters get hot under the collar

The monitoring measures may lead to the imposition of an anti-dumping mechanisms against garment and textile exports to the US if the American government is able to identify any unfair trade practices.
The monitoring mechanism has been proposed by the Bush administration following the actions of two US senators, Elizabeth Dole and Lindsey Graham, who represented the interests of US textile and apparel groups by preventing US congress from giving PNTR to Vietnam.
It was reported that two senators, last week, stepped back from their blocking stance after the administration announced a commitment to the import monitoring system.
Under the mechanism, the US will survey the quantity and price of Vietnamese garments exported to the US and compare them with a third country used as a basis to impose anti-dumping measures against Vietnamese textiles and apparel.
Vietnamese lawyers and a top executive from Vietnam’s garment and textile industry said this is a violation of the MFN (Most-Favoured Nation) obligation of Article 1 of the General Agreement on Tariff and Trade (GATT).
Furthermore, the import price monitoring system arguably fits under the ‘grey area measures’ category, which are prohibited under Article 11 of the Safeguards Agreement.
“This is surely discrimination. However, we should note an exception that a country can raise barriers against products that are considered to be traded unfairly from specific countries,” said Nguyen Dang Viet, a partner of law firm Bizconsult.
He stated that Article 1 of the GATT requires equal treatment with respect not only to customs duties and charges, and methods of levying such duties and charges, but also rules and formalities regarding importation, advantages, privileges or immunity imposed on like products from other contracting parties.
“Therefore, the US’ move will create barriers in Vietnam clothing import procedures, without applying the same measures to other WTO members, therefore the US may be considered to be violating the WTO rules,” he added.
The Vietnamese Ministry of Trade has already registered a very strong objection to the US Embassy in Hanoi, because the textile export sector is a key foreign income earner and thousands of jobs may be at risk.
“AmCham is in the process of preparing a letter to the USTR and the Secretary of Commerce regarding our disagreement with their proposal. However, the details of our letter will not be available until next week,” Thomas O’Dore, chairman of AmCham in Vietnam told Vietnam Investment Review.
Le Quoc An, Vietnamese Garment and Textile Association’s chairman, has forecast that there will be a 50 per cent decline of the number of US orders in Vietnam by 2007.
Because of this response, said An, the proposal of imposing the new mechanisms was not a sound move by the US government.
“I believe that this [anti-dumping measure] is worse than quotas imposed on Vietnamese textile and apparel because the US can impose high duties on Vietnamese textile and apparel at any time. This will cause great difficulties to Vietnamese garment and textile businesses,” An said.
Accordingly, US importers will not be able to predict import prices and will withdraw orders from Vietnam in response, meaning that workers will face difficulties.
Therefore, “we do not accept the PNTR approval by imposing special anti-dumping measures on Vietnamese textile and apparel outside WTO’s framework. Vietnam should not join the WTO at any cost,” An added.
An also said that US importers do not agree with the move, because of disadvantages to US importers and losses to Vietnam’s textile and apparel industry.
Brad Figel, global government and public affairs director for Nike, hoped to expand business in Vietnam, but now faces the issue that any clothing the multi-national firm buys there will be slapped with anti-dumping duties by the Bush administration.
To avoid the chilling effect on the garment sector, Viet said that Vietnam producers and the government need to reassure US importers and retailers with reliable evidence that there shall be no dumping and no government subsidies on Vietnam textile and clothing exports. Mutual cooperation and understanding to settle the case will be better than a dispute, he said.



No. 782/October 9-15, 2006