In the first four months of 2004, export turnover in apparel reached $644mil, down by 0.6% over the same period of last year.

The decision is expected to trim Vietnam’s current $1.8bil textile and apparel quota by 4.5%, and comes as a punishment for “export fraud” by Vietnamese companies after the DOC found clothing exported from Vietnam that was actually made in other countries.

But with the 2003 quota already considered too low vis-à-vis Vietnam’s production capacity, the reduction will only worsen exporters’ current predicament, said Le Van Dao, General Secretary of the Vietnam Textile and Garments Association (Vitas).

Mr Dao said a representative from the Import-Export Department under the Ministry of Trade (MOT) this morning had told him the ministry is continuing discussions with the DOC about the severity of the reduction.

The US Customs and Border Protection Bureau, which conducted the investigation of Vietnam’s production capacity, found that Vietnam “has the capacity and is manufacturing large quantities of apparel”.

Meanwhile, complaints continue from apparel-makers about the quota’s size and allocation.

Nguyen Ngoc Tri, director of Da Nang Apparel Import-Export Company, said that the information on quota allocation always comes late, causing headaches for the company when it sets up its business plan.

“If we pen the deal, and then the quota runs out, we cannot export the consignment order, and that will make us suffer losses,” said Mr Tri.

MOT should inform apparel companies about the quota volume for the next year by the end of the August of this year, he said, arguing that this would help exporters decide whether to sign the contracts or not.

Yi Dong Huan, General Director of VinaKorea Apparel Company, agreed, noting that State officials were scheduled to finish allocating the quota in April, but have not released any information a month later.

The delays by Government agencies have caused difficulties for enterprises, he said.

Others complain about the high quota fees and unfair decision-making process behind the allocation.

For their part, MOT officials have said complaints will persist until quotas are raised, as the quota “pie” remains is small, while many enterprises are competing for a slice.