The Vietnam-U.S. Textile Agreement (CRS Report for Congress)
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| Release Date |
Revised June 18, 2003 |
| Report Number |
RL31470 |
| Report Type |
Report |
| Authors |
Nicole J. Sayres, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
In December 2001, the United States granted Vietnam most-favored-nation status, a key
condition
of the U.S.-Vietnam Bilateral Trade Agreement (BTA) that was approved by Congress and signed
by President Bush earlier in the year. Since the BTA went into effect, U.S. imports from Vietnam
have more than doubled. Most of this increase is due to the sharp rise in clothing imports, which
increased to almost $900 million in 2002, nearly twenty times the $45-$50 million range that
Vietnam had recorded in 2000 and 2001. By dollar value, clothing is now the largest import item
from Vietnam. In 2002, Vietnam accounted for less than 1.5% of U.S. textile and apparel imports,
while about one-third of Vietnam's textile and apparel exports went to the U.S. market.
During the congressional debate over the BTA, many Members urged the Bush Administration
to negotiate a bilateral textile agreement soon after the BTA came into effect. On April 25, 2003,
the United States and Vietnam completed nearly three weeks of intense negotiations by signing a
bilateral textile agreement that places quotas on 38 categories of clothing imports from Vietnam,
including cotton pants and cotton knit shirts/blouses, the two most important items. The deal was
reached after the U.S. side threatened to unilaterally impose more restrictive quotas if the
Vietnamese did not agree to U.S. demands. Additionally, the talks were nearly derailed by an April
2003 finding by the U.S. Customs Service charging that some apparel imports labeled as Vietnamese
were actually produced in China. On labor rights, the agreement calls for Vietnam to reaffirm its
commitments to and cooperate with the International Labor Organization, and to continue its
bilateral programs with the U.S. Labor Department. These provisions are far less detailed and
comprehensive than the labor provisions included in the U.S.-Cambodia textile agreement and the
U.S.-Jordan Free Trade Agreements, which several Members of Congress had suggested as models
for a U.S.-Vietnam textile agreement.
This report analyzes the bilateral textile agreement, U.S.-Vietnam trade in textiles and apparel,
the arguments that have been raised for and against a textile agreement, and the debate surrounding
a proposed labor provision. This report will be updated periodically. For further information on
U.S.-Vietnam relations and the BTA, see the following CRS products: CRS Issue Brief IB98033,
The Vietnam-U.S. Normalization Process , by Mark Manyin; CRS Report RL30416 ,
The
Vietnam-U.S. Bilateral Trade Agreement , by Mark Manyin. Further information on textile
and
apparel issues is available in CRS Report RL31723 , Textile and Apparel Trade Issues ,
by Bernard
A. Gelb. The authors would like to thank former CRS analyst Nikki Sayres, who wrote the original
version of this report.
