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Vietnam Trade Monitoring

Jun 1, 2007

American retailers have sharply curtailed orders for apparel from Vietnam since our government began a program of monitoring imports, with an eye to possible antidumping actions, according to the National Retail Federation. At a recent hearing, the NRF urged the administration to immediately narrow the scope of the program.

"Implementation of the monitoring program has had a chilling effect on apparel sourcing from Vietnam," Erik Autor, NRFs VP and international trade counsel said. "Pending orders from Vietnam have plummeted. "At least one prominent retailer has ceased all orders from Vietnam. Another has cut its orders by 80 percent, and many others have cut their orders substantially," he added.

Autor's comments were made at a Commerce Department hearing on the administration's Vietnam Textile and Apparel Import Monitoring Program. The program was started after Vietnam joined the World Trade Organization this January, as part of a deal made last year with textile state senators who opposed permanent normal trade relations status for Vietnam.

Under the deal, the administration agreed to begin monitoring of apparel imports from Vietnam and to consider self initiation of antidumping cases if evidence is found of dumping that harms U.S. manufacturers. David Spooner, assistant secretary of Commerce, said at a recent forum in Washington that the monitoring has not had a negative impact on trade, citing an increase in imports from Vietnam.

But Autor argued that imports delivered in January were based on orders typically made six to nine months earlier, which is before the monitoring had begun. Orders have decreased sharply since the monitoring began, he claimed, and should be reflected in decreased import deliveries this summer.

All of the orders canceled in Vietnam have been diverted to other Asian nations, rather than redirected to U.S. manufacturers, he said, because U.S. companies either don't make the products in question or don't make them at competitive prices.

Autor said the monitoring program's threat of possible antidumping cases and after the fact antidumping duties is driving retailers' decisions to reduce imports from Vietnam. Unlike the filling of quotas, decisions to pursue antidumping actions are not predictable, particularly in a non market economy nation like Vietnam, he said.

"Trade remedy investigations inject a high degree of unpredictability into the sourcing equation," Autor added. "Retailers must worry every day whether the Commerce Department may at some point in the future deem that the price they paid on an order was at a dumped price. The mere threat that an antidumping investigation could be undertaken on a wide range of apparel products is a serious matter and one which is forcing apparel retailers to shift sourcing elsewhere."

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