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AMTAC Press Statement: Manufacturing Group Calls on Obama Administration to Reconsider Vietnam’s Participation in TPP

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Manufacturing Group Calls on Obama Administration to Reconsider Vietnam’s Participation in TPP

October 10, 2012
CONTACT: Lloyd Wood, Vice President of Public Relations
(202) 803-5811 x1  or lwood@amtacdc.org
WASHINGTON, DC — In light of the U.S. Department of Labor’s recent designation of Vietnam as a perpetrator of abusive child and forced labor practices, the American Manufacturing Trade Action Coalition (AMTAC) sent a letter yesterday to United States Trade Representative Ambassador Ron Kirk calling on the Obama Administration to reconsider whether Vietnam is a suitable partner for any Trans-Pacific Partnership agreement.

Besides the labor report, a host of other factors demonstrate that Vietnam has not yet made the reforms needed to be worthy of further consideration for TPP participation. Vietnam’s intolerance of competing political parties, lack of press freedom, state-owned enterprise-dominated economy, lack of an independent judiciary, and pervasive human rights abuses are each and of themselves reasons why Vietnam’s participation in the TPP should be questioned by the Obama Administration.

A copy of yesterday’s letter is both attached and pasted below.


October 9, 2012

Ambassador Ron Kirk
Office of the U.S. Trade Representative
600 17th ST NW
Washington, DC  20508

Dear Mr. Ambassador:

In light of the U.S. Department of Labor’s recent designation of Vietnam as a perpetrator of abusive labor practices, the American Manufacturing Trade Action Coalition (AMTAC) urges the U.S. government to reconsider whether Vietnam is capable of meeting the baseline political and moral commitments that should be included in any Trans-Pacific Partnership (TPP) agreement.

On September 26, 2012, the U.S. Department of Labor’s Bureau of International Labor Affairs (ILAB)[1] released its fourth annual report, “List of Goods Produced by Child or Forced Labor”.[2] It added Vietnam to the list of countries using both child labor and forced labor in the production of garments.[3]

This report is one more piece of an ever-increasing set of evidence calling into question Vietnam’s ability and willingness to serve as a reputable trading partner worthy of the preferences envisioned in any TPP.
Obviously, the U.S. textile industry strongly supports the U.S. government’s position that child and forced labor should not be exploited in the production of goods. Unfortunately, Vietnam’s failing grade with respect to preventing the abuse of child and forced labor is not the country’s only political, economic, and moral hurdle to their good faith TPP participation. Other significant problems include

  • Vietnam is one of just seven countries legally constituted as a single-party state as of 2012.[4] The others are China, Cuba, Eritrea, Laos, North Korea, and Turkmenistan.
  • Reporters Without Borders annually publishes a worldwide index of countries according to their respect for press freedom.[5] Vietnam ranked 172nd of 179 countries for press freedom.
  • Vietnam ranked 136th of 179 countries in the Heritage Foundation’s 2012 Index of Economic Freedom.[6]
  • Unlike other TPP countries, Vietnam’s economy is dominated by its state-owned enterprises (SOEs). Those entities produce about 40 percent of Vietnam’s Gross Domestic Product (GDP).[7]
  • SOEs hold a privileged place in the Vietnamese state. With respect to Vietnam, the Organization for Economic Co-Operation and Development (OECD) reported in its Southeast Asian Economic Outlook 2011/12:[8]
  • “In addition, in accordance to market regulations and its World Trade Organisation commitments, Viet Nam needs to ensure a level playing field and effective competition for the private sector. Today, SOEs are still given high priority in resource allocation, enjoying capital raised from government bond issuance.”
  • The SOE issue is a long-standing problem within the Vietnamese economy. The OECD report quoted above reaffirms many of the problems uncovered by BizCLIR (Business Climate Legal & Institutional Reform), a project commissioned by the U.S. Agency for International Development (USAID)[9] with a mission to identify and understand “constraints to business entry, operation, and growth” in developing countries. BizCLIR noted in its November 2006 assessment of Vietnam that, “…the lingering and not unsubstantial presence of SOEs continues to distort markets in several ways.” [10]Vietnam’s judicial system still is not independent of the Vietnamese Communist Party (VCP). The Bertelsmann Stiftung’s Transformation Index (BTI) 2012 country report for Vietnam noted:[11]
  • “The judiciary is clearly subject to the VCP. As Vietnam becomes increasingly integrated into international politics, its legal system has undergone some reforms. In general, however, the Vietnamese legal system does not conform to international standards. In addition, Vietnam’s legal system is insufficiently transparent, and lacks consistency, stability, and efficient implementation.”
  • Again, the lack of an independent, transparent judiciary with respect Vietnam is not new. BizCLIR’s 2006 report identified several weaknesses in Vietnam’s judicial system, including:[12]
  • “Transparency throughout the court process can be weak, and decisions are often poorly written and hard to obtain.”
  • “The courts have limited ability to enforce attendance at civil or commercial proceedings.”
  • “The courts have no institutional incentive to ensure that their judgments are enforced.”
  • “Judges do not feel that they have adequate access to or understanding of the new commercial laws. For example, judges report significant gaps in understanding of both the various sources of contract law—including not only the major general sources, but also sources pertaining to property, employment, notaries, and other issues regularly faced by businesses—and the substance of those sources.”
  • The January 24, 2012 U.S. House of Representatives Committee on Foreign Affairs oversight hearing “Examining Ongoing Human Rights Abuses in Vietnam” detailed systematic suppression of minority groups, religion, free emigration and family reunification, and freedom of expression and association.[13]
  • While TPP negotiations were being conducted in 2011, the Vietnamese government prosecuted 33 activists, sentencing them to 180 years in prison, for engaging in peaceful political expression. The sentences were handed down by the Vietnamese government even though it has ratified the International Covenant on Political and Civil Rights.[14]
  • The Vietnamese government sentenced six more activists to prison in late September for attempting to express their views freely.[15]
  • The House hearing also heard graphic testimony of human trafficking via Vietnamese government’s encouragement of citizens to participate in labor export programs.[16]

Despite these glaring and unacceptable shortcomings, Vietnam has made enormous market access demands of the United States and other TPP participants. At the same time, they have been virtually unwilling to consider even minimal changes to their economic, judicial, and political systems necessary to make them a reputable preference trading partner. Their intransigence has almost single handedly brought the entire negotiation to a standstill.

We believe that the challenges confronting Vietnam in transitioning to a transparent and market driven economy, instituting reasonable foreign investment safeguards, and eliminating abusive labor practices are too great for Vietnam to digest at this point. Their refusal to negotiate in good faith is a direct result of their unwillingness to address the serious economic, political, and moral concerns listed above.

As a result, we are calling on the Obama Administration to reconsider the current path of the TPP. It has become abundantly clear that Vietnam is not a suitable candidate for this agreement. We strongly believe that Vietnam should be asked to step back from the negotiation until such time as they make marked improvement in these key areas. To make them beneficiaries of the lucrative market access benefits that will certainly be contained in the TPP would amount to a condoning of their unacceptable behavior in the various areas identified earlier.

We thank you for your careful consideration of this important request.

Sincerely,

Auggie Tantillo
Executive Director
American Manufacturing Trade Action Coalition

 


[1] See: http://www.dol.gov/ILAB/programs/ocft/tvpra.htm

[2] See: http://www.dol.gov/ilab/programs/ocft/2012TVPRA.pdf

[3] The Trafficking Victims Protection Reauthorization Act directs ILAB to “monitor and combat forced labor and child labor in foreign countries.”  ILAB also is required to consult with other departments and agencies of the United States Government to reduce forced and child labor internationally and ensure that products made by forced labor and child labor in violation of international standards are not imported into the United States.  Vietnam was not listed in the 2009, 2010, and 2011 reports not necessarily because child and/or forced labor was not occurring, but because ILAB could not find adequate information to determine that any goods should be placed on the List because very little recent research has been done.

[4] See: http://en.wikipedia.org/wiki/Single-party_state

[5] See: http://www.nationsonline.org/oneworld/press_freedom.htm

[6] See: http://www.heritage.org/index/ranking

[7] See: http://www.indexmundi.com/vietnam/economy_profile.html

[8] See page 129: http://www.oecd.org/dev/49954377.pdf

[9] See: http://www.bizclir.com/cs/about_bizclir

[10] See: http://www.bizclir.com/cs/countries/asia/vietnam/crosscutting_themes

[11] See page 9: http://www.bti-project.de/fileadmin/Inhalte/reports/2012/pdf/BTI%202012%20Vietnam.pdf

[12] See: http://www.bizclir.com/cs/countries/asia/vietnam/crosscutting_themes

[13] See: http://foreignaffairs.house.gov/hearings/view/?1395

[14] http://foreignaffairs.house.gov/112/HHRG-112-FA-WState-JSifton-20120124.pdf

[15] See: http://www.article19.org/resources.php/resource/3455/en/vietnam:-a-dark-week-for-freedom-of-expression

[16] See: http://foreignaffairs.house.gov/112/HHRG-112-FA-WState-PVu-20120124.pdf

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