Agreement Likely to Reduce Vietnamese Garment Import

US official in Hanoi recently told that they are looking forward to sign an agreement with Vietnam by the end of this week in order reduce the Vietnamese garment exports to the US.

An official said that "My understanding is an agreement on principles might be signed by the end of the week in Washington".

The two countries held an opening round of talks in February after US-based textile and apparel manufacturers pushed the administration of President George W. Bush to impose quotas on Vietnamese clothing exports.

But US importers and retailers oppose any move to introduce quotas.

In a letter sent on April 16 to US Trade Representative Robert Zoellick, the US association of importers of textile and apparel (ITA) said they "now face real and significant costs as a result of the apparent determination of the US negotiating team to cut back Vietnam's apparel trade to the United States".

"Our members are now in the position of having to find other countries in which to place their orders..."

"Imposing these onerous restrictions... will neither create nor save a single job in the United states," they added.

The quota negotiations have also drawn accusations of protectionism from Vietnam, where labour costs are much cheaper than in the United States.

Vietnam says its clothing exports to the United States account for a fraction of total US imports and maintains the imposition of quotas would stifle the country's attempts to lift itself out of poverty.

US imports of textiles and apparel from Vietnam stood at 803 million dollars in the 11 months to November 2002, an increase of 1,556 percent over the same period in the previous year, according to official US figures.

Textile exports are Vietnam's second-biggest earner of foreign exchange after crude oil and support around two million jobs, according to the Vietnamese government.

The 10-year international Agreement on Textiles and Clothing among World Trade Organization members expires at the end of 2004. Given that Vietnam is not a member of the global trade body, the Bush administration can impose quotas on Vietnam's clothing exports at any time.