US Textile Quotas Weaken Vietnam'S Clothing Industry'S Export To The US

Over the past two years, Vietnamese foreign investors have repositioned Vietnam as a low-cost manufacturing center, which will improve trade relations between Vietnam and the United States.

But in April 2008, they signed an agreement on textiles and clothing in Washington, which seriously hampered the development potential of Vietnam.

Vietnamese leaders said the only way to help Vietnam expand its exports was Vietnam's accession to the WTO and WTO's abolition of the quota system.

From 1-10 months in 2008, about 55% of Vietnam's clothing and textiles exported to the United States, Vietnam's exports of textiles and clothing to the United States reached 1 billion 700 million US dollars in the same time.

In May 2008, Vietnam's textile and clothing exports to the United States began to decline because the quota system of the United States came into effect.

American retailers import textiles and clothing from Vietnam to help Vietnam gain a larger share of the US market.

The US agreement provides for the import of 38 Vietnamese textiles and clothing, and Vietnam's textile and clothing exports to the US are estimated at US $1 billion 700 million.

In the next few years, cotton quotas will increase by 7% every year, and the quota of wool products will increase by 2%.

Vietnamese officials have designed a complex quota allocation scheme, which will be based on past pactions, current production capacity and foreign customers' signing of export production companies.

However, such regulations result in quota fraud. Manufacturing companies complain that factory quotas are too large, while other companies have too few quotas.

Some investors spend more money to meet export orders in the European market. Some manufacturing companies turn their attention to Australia, Japan and other non quota markets.

Other companies try to turn to non quota varieties in the US, but the demand for these products in the US market is not very large.

Vietnam's other strategy is to use these limited quotas to produce high value-added and highly profitable products for US exports.