By Andrzej Zwaniecki
Washington File Staff Writer

Washington -- The U.S. Commerce Department is reducing quotas for textile and apparel imports from Vietnam because it says some clothing coming from that market was actually made in other countries.

In a May 12 fact sheet, the department said that the quota reductions for 2004 represent about 2.5 percent of the volume or 4.5 percent of the value of apparel and textiles covered by the quota system. The reductions, which the department said will vary by quota category, represents the proportion of transshipped goods in the total U.S. textile and apparel imports from Vietnam.

The department said that after a "thorough" investigation it concluded that approximately one million dozen garments were not produced in Vietnam because factories from which the clothing supposedly originated were closed or producers could not accommodate investigators' requests. The decision will trim $80 million from Vietnam's current $1,800 million quota for textile and apparel products.

U.S. textile and clothing producers criticized the decision as inadequate. Cass Johnson, president of the National Council of Textile Organizations, is reported as saying that textile export fraud in Vietnam is wider than Commerce's finding would indicate.

According to news reports, in 2003 Johnson and other industry representatives charged that Vietnam illegally shipped Chinese products to establish export levels that would justify higher quotas.

The Commerce Department said, however, that the U.S. Customs and Border Protection bureau, which conducted the investigation, found that Vietnam "has the capacity and is manufacturing large quantities of apparel."

Clothing and textile imports from Vietnam have soared since that country and the United States normalized trade relations in 2001. In 2003 the Bush administration concluded a bilateral agreement that allowed the United States to impose quotas on imports of 38 categories of clothing and textiles from Vietnam. The agreement also allows the United States to adjust those quotas if an investigation finds that Vietnamese mislabel products made in other countries as their own.

The department also said that the investigation gave the United States the opportunity to engage Vietnamese officials on proper export documentation and ways to deal with illegal transshipments. In response, Vietnam started implementing measures to minimize export fraud, the department said.