What is in this article?:
- A trade war between the U.S. and Vietnam continues to brew. The trade conflict holds ever increasing importance to U.S. cotton farmers and textile workers.
A trade war, with ever increasing importance to U.S. cotton growers and U.S. textile workers continues to brew between Vietnam and U.S. textile industries.
The 15th round of the ongoing cotton talks in the Trans-Pacific Partnership trade agreement hearings ended this past fall with much the same results — Vietnam walking out on the negotiations.
The two sides are bitterly divided between two basic marketing principles: The Single Transformation Rule and the Yarn Forward Rule.
U.S. cotton growers are caught squarely in the middle of the fight.
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The U.S. textile industry, U.S. cotton grower’s most loyal customer, favors the Yarn Forward Rule. Vietnam, one of the fastest growing customers of U.S. grown cotton, and China, by far the largest volume buyer of U.S. cotton, support the Single Transformation Rule.
Vietnam is a partner in the Trans-Pacific Partnership talks, but China is not. However, some contend China would be the big winner should the Yarn Forward Rule of Origin loses out in the ongoing negotiations.
China is the largest buyer of U.S. cotton, comprising 42 percent of total export cotton sales last year.
Vietnam was the fifth largest buyer of U.S. cotton last year, with annual purchases near 500,000 bales. The country’s jump from seventh to fifth among U.S. cotton importers makes Vietnam the fastest growing purchaser of U.S. grown cotton.
China typically buys 5-6 million bales of U.S. grown cotton, with Turkey and Mexico combining to account for about 25 percent of export sales. Pakistan and Vietnam each make up about five percent of total exports.
In a report in early February, the Vietnamese Minister for Industry and Trade noted that his country’s export of apparel and textile goods rose to $1.05 billion dollars last year.
The minister termed the increase in production an optimistic sign of Vietnamese economic growth. However, of most concern to U.S. cotton growers, he also urged textile and clothing manufacturers to minimize dependence on foreign import of raw cotton and invest in domestic cotton production.