Exporters debate solution on garment quotas
Viet Nam News, Vietnam
(28-10-2014)
HA NOI — The Ministries of Trade and Industry and the Viet Nam Textile and Apparel Association met with clothing companies in the south of Viet Nam on Thursday to work out solutions to ensure that remaining quotas for exports to the US in the last two months of this year are allocated appropriately.
Participants paid special interest to the quota distribution regime of two garment categories: cotton-knit shirts and cotton trousers.
A representative from US firm JC Penny Co in Viet Nam said that JC Penny had shifted its cotton-knit shirt orders for December this year from Viet Nam to China following a worrying claim that Vietnamese producers may lack quotas for their US-bound exports.
The representative added that if the quota allocation system of Viet Nam was not transparent, the company would be likely to move contracts for November from Viet Nam to China, which would negatively impact on the Vietnamese apparel industry’s development.
The quota volume of cotton-knit shirts and cotton trousers that have not been used so far this year has reached nearly four million dozen – a remarkable quantity.
The current quota distribution system has caused a situation where many companies that have inked deals do not have enough quotas to ship the goods, whereas others have quotas in hand, but face the threat of not attaining contracts.
Director of the quota management board at the Ministry of Trade, Nguyen Duc Thanh, recommended three measures for producers to discuss. These comprised granting quotas automatically, permitting a free quota transfer between enterprises and finally, tougher penalties on businesses that would not use up their quotas.
However, there were exporters were splintered over which method they preferred.
Chairman of Viet Nam Textile and Apparel Association (Vitas) Le Quoc An said that no single solution would satisfy all enterprises and the most significant factor was that they had to rely on the general interest of the majority of both producers and customers.
An petitioned that companies with so-far unused quotas should re-register with the quota management board in the early days of November. The re-registration would have to cover the volume of export goods, names of customers, contract numbers and the goods delivery dates.
According to An, these firms would have to further retain their guarantee fund at commercial banks, because if they did not use up 90 per cent of their total quota, they would not only be fined – losing money from their fund – they would also not be allowed to export in the first quarter of 2014.
An added that the remaining quotas would be distributed automatically to exporters.
Almost all participants agreed with the temporary solution suggested by An. Viet Nam so far this year has exported some $1.78 billion worth of garments to the US market. — VNS
