A bilateral textile agreement that ran from May 1, 2003, until January 11, 2007, imposed quantity quotas on the import of certain categories of clothing imported from Vietnam. Finally, on December 8, 2006, Congress passed legislation granting Vietnam permanent NTR status as of December 29, 2006. On May 6, 2008, the DOC completed its second six-month review of the monitoring data, and once again decided that "there is insufficient evidence to warrant self-initiating an antidumping investigation." While there was no requirement that the DOC take any action following the evaluations of the trade data, the program's continuation arguably will keep the monitoring program an issue of concern for the U.S. clothing manufacturers, the U.S. textile industry, major clothing importers, and large retail outlets in the United States. Among the possible Administration actions that could have been taken were the self-initiation of an anti-dumping investigation on select clothing imports from Vietnam, the opening of negotiations for a new bilateral textile agreement, and/or the termination of the monitoring program. Vietnam was not a member of the World Trade Organization (WTO) so it was not eligible for "normal trade relations" (NTR) status via that mechanism. Also, under U.S. law, Vietnam could only be granted permanent NTR status by the passage of legislation, or granted temporary NTR status by the conclusion of a bilateral trade agreement and compliance with the "freedom of emigration" requirements of the Jackson-Vanik amendment. The Trade Ministry's second letter to the Commerce Department shifts its focus to the negative impact it argues the monitoring program has had and will have on legitimate trade between Vietnam and the United States:
Although the additional information in the second-round proposal mentions the fact that this Program does not aim at restraining legal trade, in fact it has created negative impacts—causing worries and unstable mentality for U.S. importers placing orders in Vietnam right from the very first month of 2007, and making it impossible for Vietnam textile and apparel manufacturers to pro-actively plan their production, and above all, creating instabilities for workers in Vietnam's textile and apparel industries. Results of the First Six-Month Review

On October 26, 2007, the DOC announced that a review of the first six months of data for selected categories of clothing imported from Vietnam "found insufficient evidence to warrant self-initiating an antidumping investigation." Despite repeated changes in U.S. trade policy towards Vietnam—including the conferral of normal trade relations, the imposition of import quotas for selected clothing items, and compliance with Vietnam's WTO accession—there has been steady growth in Vietnam's clothing exports to the United States, and, with it, a rise in Vietnam's overall market share in the United States. First, the Department of Commerce has not publicly responded to requests from some Members of Congress, the Vietnamese government, and some major U.S. clothing importers for the legal basis for establishing the monitoring program. Congress could act to revisit the question of DOC's legal authority for establishing the monitoring program. Third, Congress could investigate Vietnam's compliance with its promise to terminate all WTO-prohibited subsidies to its clothing and textile industry. Fourth, possibly based in part of the results the investigation mentioned above, Congress could choose to pass legislation designed to counteract perceived unfair trade practices by Vietnam in its export of clothing to the United States.
U.S. clothing imports from Vietnam grew from virtually nothing in 2000 to $4.3 billion in 2007. Vietnam was the third largest source of clothing imports for the United States in 2006, behind (in order) China and Mexico.
Much of that growth was the result of the gradual liberalization of U.S. trade policy towards Vietnam. Although the United States terminated its trade embargo on Vietnam in 1994, trade initially remained low because Vietnam did not have "normal trade relations" (NTR) status. The signing of a bilateral trade agreement in July 2000 allowed President Clinton to grant Vietnam temporary NTR status (effective December 2001), leading to a sharp increase in U.S. imports from Vietnam, including clothing. The rise in Vietnamese clothing imports led to the United States to push Vietnam into a bilateral textile agreement in 2003 that set quantity quotas on the import of selected clothing items. The bilateral textile agreement remained in effect until the United States granted Vietnam permanent NTR status on December 20, 2006, as part of its accession into the World Trade Organization (WTO).
The liberalization of U.S. trade policy towards Vietnam raised concerns about possible dumping by Vietnamese clothing exporters. Some Members of Congress and U.S. clothing and textile companies argued that a surge in Vietnamese imports may harm the U.S. clothing and textile industry. In part to secure Senate passage of permanent NTR status for Vietnam, the Bush Administration agreed to establish a "monitoring program" for selected clothing imports from Vietnam. From its inception, there have been questions about the legality and effectiveness of the monitoring program.
On October 26, 2007, the Department of Commerce (DOC) announced the completion of its first six-month review of the monitoring data, finding that there was insufficient evidence to warrant the self-initiation of an antidumping investigation. On May 6, 2008, the DOC announced its second six-month review of the monitoring data had come to the same conclusion.
There are a range of actions that Congress might take with regard to U.S. trade policy towards Vietnam. Congress could take no action. Alternatively, Congress could revisit the question of the DOC's legal authority to establish the monitoring program, as well as examine the issue of the compatibility of the monitoring program with existing WTO agreements and commitments. Congress could investigate Vietnam's compliance with its promise to terminate all WTO-prohibited subsidies. Congress could also enact legislation designed to counteract perceived unfair Vietnamese trade practices. Congress could examine the design and conduct of the monitoring program to ascertain if it provides a reasonable basis for determining the need for an antidumping investigation and/or examine claims that the monitoring program has adversely affected trade with and investments in Vietnam. This report will be updated as circumstances warrant.