Bush Administration Offers to Consider Self-Initiating AD Investigations of Vietnamese Textile Imports
In late September 2006, the U.S. Trade Representative and the Secretary of Commerce sent letters to Senators Dole and Graham regarding their constituents' concerns over the possible granting of Permanent Normal Trade Relations (PNTR) to Vietnam and its effect on the domestic textile industry once Vietnam joins the World Trade Organization (WTO).
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(Vietnam is expected to join the WTO at the end of December/early January.)
The letters were in response to the holds placed by these Senators on Vietnam PNTR legislation - which prevented the Senate from considering the measure.
As a result of the Administration's letters, both Senators have withdrawn their holds. (Note that the House voted on Vietnam PNTR legislation during the week of November 13, 2006, but failed to pass it; press reports indicate that the House may try to pass it again in December. See ITT's Online Archives or 11/14/06 and 11/15/06 news, 06111499 1 and 06111599 1, for BP summaries.)
Offer to Monitor Vietnam Textile Imports, Self-Initiate AD Investigations
In their letters to Senators Dole and Graham, the USTR and the Secretary of Commerce offered to take the following actions regarding imports of textile and apparel from Vietnam (partial list):
Biannual review of evidence once Vietnam WTO member. Upon entry of Vietnam into the WTO and for the Bush Administration's duration, the Department of Commerce (DOC) will conclude a review every six months as to whether there is sufficient evidence to initiate an antidumping (AD) investigation of any textile or apparel goods from Vietnam pursuant to section 732(a) of the Trade Act of 1930 (19 USC 1673a(a)), and, if so, whether critical circumstances exist that would allow for preliminary duties to be applied retroactively.
Monitoring program for U.S. imports of Vietnam textiles and apparel goods. DOC will begin a comprehensive program to monitor U.S. imports of textile and apparel products from Vietnam, including the import values and volumes of these goods. In order to do this, DOC will construct, in consultation with industry, production templates for textile and apparel products of interest to determine the inputs and other factors that contribute to the fair market price of a good.
As long as Vietnam is considered a non-market economy for AD purposes, DOC will use a proxy country for this monitoring program in order to assess whether Vietnamese goods may be dumped on the U.S. market.
Self-initiation of AD investigations. If the above-described monitoring process indicates that dumping exists and the domestic textile industry fully cooperates in supplying data available to the domestic industry indicating the existence of material industry caused by such imports, DOC will self-initiate AD investigations with respect to the relevant products.
Sensitivity of certain goods. For the duration of the Bush Administration, DOC will take note of the special sensitivity to the domestic industry of trousers, shirts, underwear, swimwear, and sweaters and DOC will make available to interested private-sector parties as much of the information it gathers as possible.
Other Senators Express Concern - Renewed Interest in Blocking Senate Consideration of PNTR Legislation
In response to the above-described offer from the Bush Administration, Senators Feinstein and Smith issued a letter to Administration officials expressing concern with the government's commitment to Senators Dole and Graham. The letter requests that the Bush Administration address Senators Feinstein's and Smith's concerns prior to the Senate vote granting Vietnam PNTR.
Recent press reports also indicate that Senators Feinstein and Smith have moved to block the Vietnam PNTR bill due to their concerns.
(PNTR legislation faces another hold by Senator Martinez due to Vietnam's detention of an American citizen suspected of plotting against the Vietnamese government. Press reports indicate that the citizen in question returned to the U.S. on November 13, 2006. According to Senate sources, Senator Martinez has not yet lifted his hold on the PNTR legislation, but he is expected to do so when Congress comes back to session.)
(On November 7, 2006, the WTO General Council approved Vietnam's WTO membership, clearing the way for it to become the 150th member once it ratifies the membership agreement. PNTR is necessary for the U.S. to recognize Vietnam as a WTO member. (See ITT's Online Archives or 11/08/06 news, 06110810, for BP summary of the Vietnam's WTO membership approval and various issues surrounding the U.S.' passage of PNTR legislation for Vietnam.)
USTR & Secretary of Commerce Letter to Senators Dole and Graham (dated 09/28/06) available at http://www.apparelandfootwear.org/reports/vietnmatextilesADdolegrahamltrs060928.pdf
Letter from Senators Feinstein and Smith to USTR and Secretary of Commerce (dated 11/03/06) available at http://www.amchamvietnam.com/1137
BP Note
According to a November 21, 2006 Wall Street Journal editorial, with regard to Vietnam, the U.S. textile industry is trying to protect its interest not in the U.S. but in Central America. If the Vietnam PNTR bill passes, apparel from Vietnam may well be able to undercut the price of similar goods from Honduras. Those Central American plants buy U.S. yarn, so the textile lobby is trying to block exports from Vietnam to protect its own exports to Honduras (WSJ, dated 11/21/06, www.wsj.com )