Vietnam quotas for garment export to US to be revamped
Thanh Nien Daily, Vietnam
The move followed a meeting last week between the ministry and southern clothing companies to discuss problems of mismatch between export contracts and quotas which was causing Vietnamese firms to lose business.
The ministry follows automatic visa allocation for 25 categories of textiles. Now, they will be issued only for 40 percent of quotas in each category, instead of 70 percent as done earlier
The remaining 60 percent will be allocated to established companies with a strong performance last year. However, their exports will be secured by means of financial guarantees equivalent to 60 percent of their US exports in 2005.
Special emphasis will be placed on the quota mechanism in two categories – cotton-knit shirts and cotton trousers.
A ministry report shows a backlog of a remarkable four million dozens of these two items this year.
But the blame partly lies with the existing quota distribution system. It has left many exporters who have inked deals without enough visas and others with quotas but no contracts.
The US-based JC Penney shifted its cotton-knit shirt orders for December from Vietnam to China for fear that Vietnamese manufacturers may not have enough US quotas.
A company representative added that if Vietnam’s visa system was not made transparent the firm would move November contracts too to China.
The garment industry has increased exports to the US by more than 10 percent to US$1.78 billion so far this year.
The country ranks 16th among 153 clothing exporters and has set its sights on climbing into the top 10 by 2014.
Reported by Mai Phuong – Translated by Ha Viet
