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"We oppose free trade negotiations with Vietnam" - Johnson, NCTO

Fibre2Fashion | 5 March 2009

"We oppose free trade negotiations with Vietnam - Johnson, NCTO

At a hearing on proposed free trade negotiations with countries in the Trans-Pacific Partnership area (TPP), NCTO [National Council of Textile Organisations] opposed the proposed inclusion of Vietnam in the negotiations and said the textile industry would oppose any agreement that included Vietnam. NCTO urged the Obama Administration to overturn the Bush Administrative initiative to include Vietnam.

Cass Johnson, President of NCTO, stated: "By proposing to include Vietnam, a non-market economy, in free trade negotiations, USTR is turning long standing trade policy on its head. Non-market economies such as Vietnam have long been recognized as posing unique threats to U.S. manufacturers and their workers.

This is because the government controls or strongly influences the basic organs of the economy and can redirect resources to undercut U.S. companies and drive them out of business. On top of that, Vietnam remains a communist country without the right of assembly, free press or a democratic vote. Why are we now offering Vietnam a free trade agreement, the crown jewel of trade liberalization?"

Johnson noted that the admission of Vietnam into the WTO in 2007 had already failed to produce the benefits that the Bush Administration had been promised. Instead, according to U.S. government figures, the trade balance with Vietnam has sharply deteriorated. The trade deficit with Vietnam increased by $2.7 billion in just two years, or 35 percent, to reach a record $10.1 billion. Textile and apparel exports from Vietnam increased by $2.0 billion or 60 percent while the U.S. textile and apparel sector has lost 97,000 jobs.

Johnson said that the textile industry was surprised that the U.S. government would even consider granting Vietnam free trade status. He said, "The government of Vietnam has a non convertible currency, controls the ownership of land, owns all the major banks, sets wage rates and directly subsidizes large portions of its economy, including the textile and apparel sector, which is still guided by Five Year Plans.

Now the U.S. government is proposing to fling open the front door and let Vietnam do its worst. This is not only bad trade policy, but it is bad economic policy and it demonstrates why support for free trade agreements and further trade liberalization has hit historic lows among the American public."

Johnson concluded, "NCTO urges the Obama Administration to begin the hard work of restoring confidence in U.S. trade policy by overturning this bizarre and dangerous initiative from the waning days of the Bush Administration."


Key Facts about U.S. Textile Industry:
- One of the largest manufacturing employers in the United States, the overall textile sector employed over 700,000 workers in 2007. Textile mills alone employed 319,000 workers.
- The 3rd largest exporter of textile products in the world - more than $16.5 billion in 2006.
- Nearly two-thirds of U.S. textile exports during 2007 went to developing countries. The U.S. textile industry exported to more than 50 countries, with 20 countries buying more than $100 million a year.
- Supplies more than 8,000 different textile products a year to the U.S. military.
- U.S. textile shipments totaled $68.5 billion in 2007.
- Invested more than $9 billion in new plants and equipment from 2001 to 2006.
- Has increased productivity by 50 percent over the last 10 years and ranks second among all industrial sectors in productivity increases.
- In 2007, textile workers on average earned 136% more than clothing store workers ($524 a week vs. $222) and received health care and pension benefits


 source: Fibre2Fashion