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NCTO urges US to reconsider FTA with Vietnam
Mar '10
Cass Johnson, President of the National Council of Textile Organizations, testified before the United States International Trade Commission regarding the proposed U.S.-Trans-Pacific Partnership Free Trade Agreement. During his testimony, Johnson raised significant concerns with the inclusion of Vietnam in the agreement and urged the Obama Administration to re-think its proposal.

“NCTO is strongly opposed to the inclusion of Vietnam in the TPP agreement because it would mean the loss of tens of thousands of U.S. textile export jobs in this country,” Johnson stated. Johnson also noted that the agreement puts at risk hundreds of thousands of related apparel jobs in the Western Hemisphere that depend on U.S. textile exports.

Johnson also raised concerns regarding Vietnam's mercantilist trade policy. He noted that in 2006, the Vietnam government provided assurances during the Permanent Normal Trade Relations (PNTR) debate that it would not stop subsidizing its textile and apparel export sector but recently boasted that since 2008 it had pored $3 billion in new investment into the sector. Johnson also presented information on VINATEX, a state-owned conglomerate that is one of the largest garment producers in the world.

Johnson stated, “The VINATEX example is one reason that we urge the Administration to reconsider by selecting a government for a free trade agreement that has largely patterned its economy on China's central planning model. The last thing our economy needs is another China problem.” Johnson noted that, “One quarter of Vietnam's economy is devoted to exporting, a higher percentage than China's, and workers in Vietnam are paid less than half the amount of workers in China. ”

Since Vietnam was granted PNTR and quotas were removed, Vietnam's exports of apparel to the U.S. have increased by 57 percent. Vietnam is now the second largest exporter of apparel after China to the U.S. market. At the same time, exports from the NAFTA and CAFTA regions of virtually the same ypes of apparel dropped by four billion dollars.As a result, thousands of U.S. textile export jobs were lost as orders for yarns and fabrics from those countries disappeared.

“It is no surprise that exports from Vietnam and China, two non-market economies which have poured resources into their textile and apparel sectors, have surged since 2006, while exports from nearly every other country have fallen.” The NAFTA, CAFTA and Andean regions are vitally important export markets for U.S. textile industry, as seventy-five percent of all textile exports go to free trade partners in the Western Hemisphere and whose exports support jobs for nearly one million apparel workers throughout the region.

“We strongly urge the Administration to rethink its strategy of inviting non-market economies like Vietnam to become free trade partners with the United States. This policy move only encourages the “China model” of export dependency and will lead to higher trade deficits and more U.S. Manufacturing job losses.”

National Council of Textile Organizations (NCTO)

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