The current application of a supervision mechanism will become a vital issue for the whole Vietnamese textile and garment industry.
Vietnam becomes an official member of the World Trade Organisation (WTO) from January 11, 2007. Also, from that date, quotas on Vietnamese textile and garment export to the US will be removed.
However, no longer than Vietnamese textile and garment enterprises enjoy post-quota happiness, do they face a risk of anti-dumping lawsuits in the US market.
Export promotion and solutions to prevent risks of such lawsuits represented the main content of a seminar in Hanoi which was chaired by Trade Minister Truong Dinh Tuyen.
Facing a risk of anti-dumping lawsuits
Nguyen Duc Thanh, head of the Department of Textile and Garment, under the Ministry of Trade, said that in 2006, Vietnam’s textile and garment export turnover was estimated at more than US$5.8 billion, up by 22 per cent against that of 2005. The export turnover to the US market was put at around US$2.2 billion, up by around 25 per cent against 2005.
As stipulated by the US, textiles and garments managed with quotas are allowed to witness an increase of six per cent per annum. However, in 2006, thanks to an open and transparent export regulation mechanism, Vietnamese textile and garment makers and exporters have had more partners.
“In 2005, only nine categories were considered as ‘hot.’ In 2006, the hot figure reached 23 out of 25 categories”, said Thanh.
Mark Neuman, lawyer from Mast Industries (the US) – one of the major importers of Vietnamese textiles and garments – said among 42 countries, whose products are imported by Mast Industries, Vietnam had the most open and best quota regulation mechanism. Mast Industries bought products from the countries but preferred the import of goods from Vietnam with a double year-on-year increase in volume. The group’s import value increased to US$217 million from 2001.
The group is expected to import US$400 million worth of products from Vietnam in 2007. Neuman also warned Vietnamese textile and garment exporters of a risk of anti-dumping lawsuits. Le Van Dao, general secretary of the Vietnam Textile and Garment Association, forecast that T-shirts, trousers, swimwear, underwear and sweaters may face anti-dumping lawsuits in the US.
The Vietnam Textile and Garment Association has sent a letter to US President George W Bush, stating that the export of Vietnamese textiles and garments do not impact on and harm the US’s production. Also, the association has proposed the US not to apply a supervision mechanism as proposed by two US parliamentarians. The issue, however, has yet to be settled.
Therefore, from now on, Vietnam should take measures to manage the export of textiles and garments to the US to prevent a possibly sudden growth with low export prices. Dao said importers would no longer buy products if the US began considering anti-dumping lawsuits or investigation.
Price and export growth management in 2007
As Trade Minister Tuyen said at the beginning of the seminar, during negotiations for Vietnam’s WTO accession, many industries had to make sacrifices for the industry, not letting the industry face risks and difficulties due to anti-dumping lawsuits in the US.
Therefore, a supervision mechanism of the export of textiles and garments to the US, proposed by the Ministry of Trade, the Ministry of Industry and the Vietnam Textile and Garment Association, will concentrate on managing factors: export prices and export growth.
With an experience of 20 years, providing consultancy services for the import of textiles and garments with Mast Industries, Neuman stressed that Vietnam should control the minimum price and manage the growth by maintaining an average price for a product because there would be no anti-dumping lawsuits if there were no falls in prices.
According the draft regulations on the management of textile and garment exports to the US, to supervise and update in a timely manner the export landscape, the Ministry of Trade and the Ministry of Industry will apply the granting of export certificates (E/C) to replace visas and enterprises will have to register their delivery plans, including volume and prices.
With the mechanism, Thanh calmed enterprises, saying that procedures for E/C granting were very simple. The granting of E/C has been applied for footwear products exported to the EU and no enterprises have complained about the procedures yet. At the same time, to regulate the export growth to the US, avoiding an overheating growth with a sudden fall in prices of five sensitive categories, supervised by the US, the two ministries have proposed the management of the minimum average price.
As planned, the draft regulations will further gather inputs and comments from enterprises before being issued in late December, because according to enterprises, the application of a supervision mechanism will become a vital issue for the whole Vietnamese textile and garment industry.
Dinh Lan
Vietnamese
