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US CUTS VIETNAM TEXTILE, APPAREL QUOTAS

WASHINGTON, DC - The Commerce Department is reducing quotas for textile and apparel imports from Vietnam because it says some clothing coming from that market was actually made in other countries.

The DOC said that the quota reductions for 2004 represent about 2.5% of the volume or 4.5% of the value of apparel and textiles covered by the quota system. The reductions, which the department said will vary by quota category, represents the proportion of transshipped goods in the total US textile and apparel imports from Vietnam.

The department said that after a "thorough" investigation it concluded that approximately one million dozen garments were not produced in Vietnam because factories from which the clothing supposedly originated were closed or producers could not accommodate investigators' requests. The decision will trim $80 million from Vietnam's current $1,800 million quota for textile and apparel products.

US textile and clothing producers criticized the decision as "inadequate."

Cass Johnson, president of the National Council of Textile Organizations, is reported as saying that textile export fraud in Vietnam is wider than Commerce's finding would indicate.

According to news reports, in 2003 Johnson and other industry representatives charged that Vietnam illegally shipped Chinese products to establish export levels that would justify higher quotas.

The Commerce Department said, however, that the US Customs and Border Protection bureau, which conducted the investigation, found that Vietnam "has the capacity and is manufacturing large quantities of apparel."

Clothing and textile imports from Vietnam have soared since that country and the United States normalized trade relations in 2001. Last year the Bush Administration concluded a bilateral agreement that allowed the US to impose quotas on imports of 38 categories of clothing and textiles from Vietnam.

The agreement also allows the US to adjust those quotas if an investigation finds that Vietnamese mislabel products made in other countries as their own.

STEEL IMPORTS EDGE HIGHER

WASHINGTON, DC - Six months after the White House scrapped tariffs on foreign-made steel, imports to the US are again moving higher, raising concerns among domestic producers that want to protect their shaky industry.

American companies are heartened by the growing global demand for steel. But the US industry fears that imported steel again could flood the American market, so steel makers are pressing the Bush Administration to set up a permanent system for monitoring imports.
 
The White House imposed steep tariffs on steel imports in March 2002 to ease foreign competition and give the beleaguered US industry breathing room to consolidate and restructure. But in an about-face in December, President Bush eliminated the tariffs midway through their three-year program to avoid a threatened trade war with the then 15-nation European Union.
 
At the same time, the White House held in place a monitoring system for imports that is set to expire in March 2005. Domestic producers are lobbying to make the system permanent, as well as expand its coverage beyond the estimated dozen steel products now covered.

Forty-one steel companies nationwide have declared bankruptcy since 1997.

There has been no indication the department plans to extend the system past next March. The department declined to comment publicly.
 
American companies imported 2.2 million metric tons of steel in April, worth $1.3 billion, according to preliminary data the department released this week. That is close to the 2.4 million tons, valued at $1 billion, imported in April 2001 - a year before the tariffs were enacted.

While the tariffs were in place, monthly imports dropped as low as 1.5 million tons, with values sinking to $778 million. Similarly, the US imported 6.1 million tons so far this year through March, the latest data available - close to the 6.2 million tons imported through March in 2001.
 
By contrast, imports dropped to an annual total of 5.9 million tons through March 2003, the year of the tariffs' most dramatic impact.

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