By David J. Lynch,
USA TODAY
WASHINGTON — An unusual Bush administration maneuver designed to pave the way for congressional approval of normalizing trade relations with Vietnam has triggered an uproar among major retailers.
The administration's dealmaking has imperiled prospects for expanded trade with Vietnam and invited a host of trade-affected industries to seek their own special deals, the retailers say. "We're pretty upset," says Eric Autor, vice president of the National Retail Federation.
The administration wants the Vietnam trade bill passed before President Bush journeys to Hanoi for the Nov. 18 opening of the Asia-Pacific Economic Cooperation (APEC) summit. But Sens. Elizabeth Dole, R-N.C., and Lindsey Graham, R-S.C., had blocked a vote, fearing the impact of low-cost Vietnamese clothing on Carolina mills.
In response, trade officials offered unique protections for the textile industry, including a twice-yearly Commerce Department review of "whether there is sufficient evidence to initiate an anti-dumping investigation of any textile or apparel goods from Vietnam," said a Sept. 28 letter signed by Commerce Secretary Carlos Gutierrez and Susan Schwab, the U.S. Trade Representative.
The letter also said any anti-dumping penalties could be applied "retroactively" to retailers such as Target, Liz Claiborne and The Gap, effectively encouraging them to buy from countries such as Cambodia or Bangladesh rather than Vietnam. If Vietnam exports sag, their ability to buy more U.S. products will be in doubt, Autor says.
Textile industry supporters insist they need new defenses. "Vietnam has a state-owned and state-subsidized textile and apparel sector. They can underprice not only our goods, but those of every other country in the world," says Cass Johnson, president of the National Council of Textile Organizations.
The industry, which blames foreign competition for the loss of 179,000 textile jobs in the past five years, worries that Vietnam will take clothing orders from Central American garment makers who use U.S. yarns and fabrics.
Under anti-dumping law, industries claiming damage from unfairly priced imports must petition the government for an investigation. But they can only complain about foreign makers of the same products they make. So North Carolina's fabric mills can't complain about Vietnamese clothing shipments.
The government has the authority to start investigations on its own, but rarely does. The last case, against Canadian softwood lumber shipments, was in 1991, the Commerce Department says.
Susan Esserman, who administered U.S. anti-dumping law as an assistant secretary of Commerce in the Clinton administration, says the new textile deal "is a very unusual move. It would create uncertainty and risk, and have a chilling effect on trade."
But Esserman, now a partner at Steptoe & Johnson, a Washington law firm, says anti-dumping investigations of Vietnamese shipments won't automatically mushroom. And Stephen Norton, a spokesman for the U.S. Trade Representative's office, rejected the idea that other industries might win similar protection.
"Our commitment is ... specific to Vietnam and specific to this case," he said.
Johnson, however, says textile makers may seek similar protection against Chinese imports when current safeguard measures expire Jan. 1, 2009.
The administration's dealmaking has imperiled prospects for expanded trade with Vietnam and invited a host of trade-affected industries to seek their own special deals, the retailers say. "We're pretty upset," says Eric Autor, vice president of the National Retail Federation.
The administration wants the Vietnam trade bill passed before President Bush journeys to Hanoi for the Nov. 18 opening of the Asia-Pacific Economic Cooperation (APEC) summit. But Sens. Elizabeth Dole, R-N.C., and Lindsey Graham, R-S.C., had blocked a vote, fearing the impact of low-cost Vietnamese clothing on Carolina mills.
In response, trade officials offered unique protections for the textile industry, including a twice-yearly Commerce Department review of "whether there is sufficient evidence to initiate an anti-dumping investigation of any textile or apparel goods from Vietnam," said a Sept. 28 letter signed by Commerce Secretary Carlos Gutierrez and Susan Schwab, the U.S. Trade Representative.
The letter also said any anti-dumping penalties could be applied "retroactively" to retailers such as Target, Liz Claiborne and The Gap, effectively encouraging them to buy from countries such as Cambodia or Bangladesh rather than Vietnam. If Vietnam exports sag, their ability to buy more U.S. products will be in doubt, Autor says.
Textile industry supporters insist they need new defenses. "Vietnam has a state-owned and state-subsidized textile and apparel sector. They can underprice not only our goods, but those of every other country in the world," says Cass Johnson, president of the National Council of Textile Organizations.
The industry, which blames foreign competition for the loss of 179,000 textile jobs in the past five years, worries that Vietnam will take clothing orders from Central American garment makers who use U.S. yarns and fabrics.
Under anti-dumping law, industries claiming damage from unfairly priced imports must petition the government for an investigation. But they can only complain about foreign makers of the same products they make. So North Carolina's fabric mills can't complain about Vietnamese clothing shipments.
The government has the authority to start investigations on its own, but rarely does. The last case, against Canadian softwood lumber shipments, was in 1991, the Commerce Department says.
Susan Esserman, who administered U.S. anti-dumping law as an assistant secretary of Commerce in the Clinton administration, says the new textile deal "is a very unusual move. It would create uncertainty and risk, and have a chilling effect on trade."
But Esserman, now a partner at Steptoe & Johnson, a Washington law firm, says anti-dumping investigations of Vietnamese shipments won't automatically mushroom. And Stephen Norton, a spokesman for the U.S. Trade Representative's office, rejected the idea that other industries might win similar protection.
"Our commitment is ... specific to Vietnam and specific to this case," he said.
Johnson, however, says textile makers may seek similar protection against Chinese imports when current safeguard measures expire Jan. 1, 2009.
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