Vietnam: 80% of Quotas Allotted to Leading Garment Makers

The Ministry of Commerce announced the garment quotas of the U.S. and EU for 2005 in August. According to a governmental official, 80% of 38 categories of the U.S. quota were allotted to leading garment manufacturers, and the remainder were given to manufacturers who use local-make materials (3%), exporters to non-quota areas (3%), manufacturers whose factories are located in regions more than 500 km distance from Saigon and Haiphon (1%), joint ventures of dyeing and production (4%) or investors in these businesses, garment manufacturers who contract with leading US importers (7%), or manufacturers who reserve contracts with them.

Regarding the EU quotas, manufacturers who have exported a lot of garments to the EU market, are granted rights to export 70% of value achieved in 2004; however, this system is valid only for eight categories. The remainder of 21 categories are allotted automatically to garment manufacturers. The EU quotas will be announced after the end of negotiations for 2005.

According to Luong Van Tu, Deputy Minister of Trade, the U.S. ranks Vietnam as the fourth country following Pakistan, India and China in terms of international competitiveness. "The U.S. believes China is superior to other countries in exclusive competitive power for the manufacture of textiles and apparel with inexpensive labor costs in addition to low-priced machinery and materials," said Tu.