Local clothing exporters hit by US fraud claim

Some local clothing makers claim they have been stitched up by US fraud allegations

“After a thorough investigation, [the CBP] concluded that approximately one million dozen garments were not produced in Vietnam because factories from which the clothing supposedly originated were closed or could not accommodate investigators’ requests,” a spokesperson for the US Commerce Department said.
“The decision will trim $80 million from Vietnam’s current $1.8 billion quota for textile and apparel products.”
US textile and clothing manufacturers have criticised the decision, saying the practice of forging documentation is more widespread than indicated by the CBP.
“Vietnam is illegally shipping Chinese products to establish export levels that would justify higher quotas,” the president of the US’ National Council of Textile Organisations, Cass Johnson, said.
Under a bilateral agreement on textile and clothing signed last May, Vietnam was given a $1.7 billion quota for exports to the US in 2003, to increase by 7 per cent the next year.
Vietnam’s Deputy Minister of Industry, Bui Xuan Khu, has defended the illegal actions of the domestic companies.
“Illegal transshipments and imitated certificates of origin are indispensable to a transitional economy like Vietnam,” he said.
“However, the agencies that deal with this sector are going to be given more powers to minimise these violations as they damage Vietnam’s image.”
An official from the Ministry of Trade, who did not want to be named, said the ministry had received no official word on the cut from the US Government.
“But the allocation of the US quota to domestic companies has not been changed, so the cut will have a limited effect on the local industry.”
The official said the ministry would meet with US Government officials to discuss the cut.
Le Van Dao, general secretary of the Vietnam Garment and Textile Association, said the cut would make things difficult for the Vietnamese industry.
“With the current quota limit at just $1.7 billion, which is considered too limiting for the industry, the reduction of the quota will mean local enterprises struggle,” he said, adding that the cut was particular significant given the quota would be gone entirely if Vietnam was accepted to the WTO next year.
Dao said domestic companies were afraid the quota reduction would force them to break export contracts they had already signed.
Thang Loi Textile and Garment company (Vigatexco) is one example. The company recently won a $12 million contract with US company Dickies Medical to export four million medical uniforms and two million metres of cloth by the end of this year.
“But the company cannot meet the order because of a shortage of allocated quotas for next year,” Vigatexco deputy general director Ngo Duc Hoa said.
“The Ministry of Trade should clarify the quota allocations after any change in policy or market situation.”
The CBP is continuing to monitor imports from Vietnam and has stopped 100 shipments of garments when the exporter was unable to prove the country of origin was Vietnam.