The Doha Round negotiations faced an uncertain future in Congress even if trade ministers from the G-6 countries had been able to reach an agreement on “modalities” for the five-year-old talks at a mid-July meeting in Geneva.
Example: 44 members of Congress had written U.S. Trade Representative Susan Schwab asking that the United States (1) split off textile negotiations from the remainder of the Doha Round and (2) establish adequate textile safeguards as a condition for admitting Vietnam into the WTO.
They also said that failure to address those concerns would “substantially impact” their view of trade legislation from this point forward, according to a statement issued by U.S. textile industry groups.
“We thank the Members who signed this letter for their strong expression of support for the U.S. textile industry,” the American Manufacturing Trade Action Coalition, the National Council of Textile Organizations and the National Textile Association said.
“In addition, House Textile Caucus Co-Chairs Howard Coble, R-N.C., and John Spratt, D-S.C., deserve special recognition for their tireless leadership and organizing efforts. The letter’s two requests are crucial to the long-term health and survival of the U.S. textile industry.”
The textile groups said the latest Doha Round text called for unbalanced reductions in U.S. industrial tariffs compared to so-called developing countries like China, adding the only way to exempt textiles from this proposed commitment was to create a separate negotiating sectoral in the non-agricultural market access portion of the Doha talks.
“A textile sectoral is a ‘must-have’ for the U.S. textile industry and the U.S. government must demand one now before they lose the opportunity,” the groups said. A sectoral is the only realistic way to save the tariffs and safeguards that stand as the last line of defense for the U.S. textile industry and its preferential trade partners in Latin America and Africa against unfair trade practices from non-market economies like China and Vietnam.”
The letter also addresses how Vietnam uses China’s formula of predatory non-market economics, subsidies, and pennies-per-hour labor to steal business away from U.S. companies playing by the rules. These unfair policies have allowed Vietnam to seize an additional $3 billion in U.S. textile and apparel import market share since 2001.
“The failure to include an adequate textile safeguard in the recently signed WTO accession agreement between the United States and Vietnam is unacceptable,” AMTA, NCTO and NTA officials said. The U.S. government can and must exercise its power to rectify this job-destroying flaw prior to the finalization of Vietnam’s accession.”
Finally, solving the two problems outlined in the Textile Caucus letter are critical, they said, because the U.S. textile industry effectively lacks legal standing to use anti-dumping and countervailing duty defenses against dumped and illegally subsidized imports. For a variety of reasons, producers in the textile supply chain, the bulk of the U.S. textile industry, are precluded from filing anti-dumping suits for all practical purposes. Moreover, the ability to seek penalty tariffs is also unavailable to the industry because the U.S. Commerce Department has determined that it will not apply countervailing duty law to non-market economies like China and Vietnam.
“It is imperative that effective trade remedies be included in both Vietnam's WTO accession agreement and as part of any ultimate Doha Round package,” AMTAC, NCTO and NTA said. “Absent such action, expect China and Vietnam to keep cheating until they eliminate all other significant U.S. and foreign competition in the U.S. market.”