U.S. Clothing Imports from Vietnam: Trade Policies and Performance (CRS Report for Congress)
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| Release Date |
Revised June 27, 2008 |
| Report Number |
RL34262 |
| Report Type |
Report |
| Authors |
Michael F. Martin, Foreign Affairs, Defense, and Trade Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
U.S. clothing imports from Vietnam grew from virtually nothing in 2000 to $4.3 billion in 2007. Vietnam was the third largest source of clothing imports for the United States in 2006, behind (in order) China and Mexico.
Much of that growth was the result of the gradual liberalization of U.S. trade policy towards Vietnam. Although the United States terminated its trade embargo on Vietnam in 1994, trade initially remained low because Vietnam did not have "normal trade relations" (NTR) status. The signing of a bilateral trade agreement in July 2000 allowed President Clinton to grant Vietnam temporary NTR status (effective December 2001), leading to a sharp increase in U.S. imports from Vietnam, including clothing. The rise in Vietnamese clothing imports led to the United States to push Vietnam into a bilateral textile agreement in 2003 that set quantity quotas on the import of selected clothing items. The bilateral textile agreement remained in effect until the United States granted Vietnam permanent NTR status on December 20, 2006, as part of its accession into the World Trade Organization (WTO).
The liberalization of U.S. trade policy towards Vietnam raised concerns about possible dumping by Vietnamese clothing exporters. Some Members of Congress and U.S. clothing and textile companies argued that a surge in Vietnamese imports may harm the U.S. clothing and textile industry. In part to secure Senate passage of permanent NTR status for Vietnam, the Bush Administration agreed to establish a "monitoring program" for selected clothing imports from Vietnam. From its inception, there have been questions about the legality and effectiveness of the monitoring program.
On October 26, 2007, the Department of Commerce (DOC) announced the completion of its first six-month review of the monitoring data, finding that there was insufficient evidence to warrant the self-initiation of an antidumping investigation. On May 6, 2008, the DOC announced its second six-month review of the monitoring data had come to the same conclusion.
There are a range of actions that Congress might take with regard to U.S. trade policy towards Vietnam. Congress could take no action. Alternatively, Congress could revisit the question of the DOC's legal authority to establish the monitoring program, as well as examine the issue of the compatibility of the monitoring program with existing WTO agreements and commitments. Congress could investigate Vietnam's compliance with its promise to terminate all WTO-prohibited subsidies. Congress could also enact legislation designed to counteract perceived unfair Vietnamese trade practices. Congress could examine the design and conduct of the monitoring program to ascertain if it provides a reasonable basis for determining the need for an antidumping investigation and/or examine claims that the monitoring program has adversely affected trade with and investments in Vietnam. This report will be updated as circumstances warrant.
