WASHINGTON — Legislation to grant Vietnam permanent normal trade relations status goes to the full Senate with bipartisan support after receiving the unanimous approval of the Senate Finance Committee on Monday night.
Sen. Chuck Grassley (R., Iowa), chairman of the finance committee, which passed the measure 18-0, with two abstentions, has said the Senate most likely would vote on the bill in September when Congress returns from a monthlong recess. Permanent normal trade relations status gives U.S. trading partners preferential treatment, such as low tariffs.
However, Sen. Elizabeth Dole (R., N.C.) has placed a hold on the legislation “because she is very concerned about the potential negative impact this agreement could have on North Carolina textile jobs,” Katie Norman, press secretary for Dole, wrote in an e-mail.
Dole’s move is intended to prevent the Senate from considering the bill until the leadership addresses her concerns and makes some concessions.
“The Vietnam trade agreement does not provide necessary tools to ensure that the Vietnamese government is a fair player in textile trade,” said Norman, pointing to Vietnam’s subsidized textile and apparel industry and illegal transshipments from China.
Dole is seeking a number of trade remedies to “force the Vietnamese government to abide by fair trading practices, empower the domestic textile industry and prevent dramatic surges in Vietnamese textile and apparel imports,” Norman said.
The remedies include an extension of quotas on Vietnamese textile and apparel imports, expanding the application of antidumping and countervailing duty laws to Vietnam and requiring that the U.S. Trade Representative’s office investigate and combat subsidization of Vietnam’s textile and apparel industry.
Retailers and apparel importers expect Congress to pass the legislation, but many remain concerned about Dole.
Domestic textile producers contend that the bilateral pact with the U.S., a required precursor for Vietnam’s entry to the World Trade Organization, is inadequate because it does not contain a built-in quota safeguard — similar to China’s — nor does it extend existing apparel and textile quotas, which would be eliminated when Vietnam joins the WTO.
“[Dole] is seeking something concrete,” said Cass Johnson, president of the National Council of Textile Organizations, which has lobbied lawmakers on this issue with the American Manufacturing Trade Action Coalition. “The industry was left defenseless against dumped or subsidized Vietnamese imports and she is seeking an answer to that problem.”
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Retail and apparel manufacturing and import groups contend the bill will pass, although the hold by Dole could have an impact.
“We’re heartened by the finance committee’s approval,” said Paul Kelly, senior vice president for federal and state government affairs at the Retail Industry Leaders Association. “We’re happy there weren’t any problematic amendments [in committee], but clearly our concern is about what Sen. Dole is considering.”
Stephen Lamar, senior vice president at the American Apparel and Footwear Association, said, “I don’t know what she will be able to get out of this. Certainly, she can’t change the terms of the Vietnam agreement, she can’t include more safeguards than what are in there now and she can’t keep quotas in place because it would force a renegotiation and those are really undoable things.”
The House Ways and Means Committee has not yet held a hearing on the legislation.