US to sign Vietnam deal despite textile protests

By Doug Palmer

WASHINGTON (Reuters) – The United States will soon sign a
deal paving the way for Vietnam to join the World Trade
Organization, despite U.S. textile industry protests, a top
U.S. trade official said on Monday.

Deputy U.S. Trade Representative Karan Bhatia told
reporters Washington hoped to sign the agreement at a June 1-2
meeting of trade ministers of the Asia Pacific Economic
Cooperation in Ho Chi Minh City, Vietnam. The two sides reached
an agreement in principle earlier this month.

“We’re in the process of working up the legal documentation
– crossing ‘t’s and dotting ‘i’s hopefully — and if we can
get all that done before the June visit … hopefully we would
be able to sign it then,” Bhatia said at a briefing on his
upcoming trip to Taiwan, India and Vietnam.

U.S. textile producers have complained the agreement with
Vietnam will open the U.S. market to heavily subsidized foreign
competition. Washington limits the amount of clothing and
textiles that Vietnam can ship to the United States, but has to
give up those quotas when Hanoi joins the WTO.

Bhatia defended the deal the United States negotiated,
saying it would provide significant new market opening for U.S.
manufacturers and service industry providers in sectors ranging
from banking to telecommunications.

“I believe it is also a good agreement for American textile
manufacturers” because of a commitment Hanoi made to eliminate
all WTO-prohibited subsidies upon joining the WTO, Bhatia said.
The pact allows the United States to reimpose quotas for one
year if Vietnam fails to honor that commitment.

U.S. textile producers say the enforcement mechanism lacks
strong enough teeth to force Hanoi give up its subsidies.

They have pushed for a “safeguard” provision that would
allow the United States to reimpose quotas on Vietnam clothing
and textiles in response to an import surge.

Hanoi still must finish negotiations on a multilateral
agreement with all WTO members before it can join the world
trade group, which is its goal by the end of this year.

Bhatia said the United States had no plans to push for a
textile safeguard measure as part of the multilateral talks.

Congress must approve permanent normal trade relations with
Hanoi as part of the WTO accession deal. The Bush
administration wants lawmakers to vote on that as quickly as
possible after the bilateral deal is signed, Bhatia said.