The USA and Vietnam have extended their deal which increases the number of Vietnamese garments that can be sold in the USA by 8%. The agreement will last a year and works by allowing companies to borrow from next year’s quota.

Last year Vietnam was limited to selling garments worth $1.7 billion to the USA in 2003, with subsequent annual quota increases of between 2% and 7%. Cheap Vietnamese textile and garment exports to the country were valued at $2.46 billion in the first seven months of 2004.

As a non-WTO member, Vietnam faces harsh competition next year when WTO members such as rival China are no longer constrained by quotas.

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