A bipartisan group of 52 Congressmen urged the Obama Administration to proceed cautiously in negotiations over the Trans-Pacific Partnership lest it trigger another wholesale shift of textile jobs from the Western Hemisphere to China via Vietnam.

 

The warning came despite reports that more global apparel and footwear brands are shifting capacity to the West in anticipation of higher costs in China. The TPP aims to lower trade barriers among Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and the United States.


It is important to recognize that Vietnams textile and apparel production and export model is heavily influenced by its proximity to and its relationship with China, reads a June 1 letter sent to U.S. Trade Representative Ron Kirk by the delegation, which includes 33 Congressmen from Southern textile states.

 

Like China, Vietnam has a large state-owned and subsidized textile sector. Vietnam also has an undervalued currency, weak environmental rules and lax intellectual property enforcement. Finally, Vietnam depends on China for most of its yarns and fabrics, importing $2.2 billion of textile components from China in 2009. Due to the fact that China is the dominant source of Vietnams textile and apparel inputs, their market does not offer significant export opportunities for U.S. yarn and fabric producers.


The letter also notes that Vietnam is already the second largest supplier of textiles and apparel to the U.S. behind China even though importers now pay full duties on its products.  Nearly 60 percent of the U.S. merchandise trade deficit with Vietnam is in textiles and apparel.