Vietnamese garment manufacturers have used just over half the total export quota for 25 garment categories to the US according to data from the Ministry of Trade (MoT).

Around 51 per cent of the US export quota and 60-70 per cent of the EU quota in these categories has been taken, the figures show.

Industry officials say that authorities need to allow companies to exchange the quotas to prevent them from being wasted.

Chief of the Vietnam Textile and Apparel Association, Le Quoc An, says the problem is the result of an inappropriate quota distribution system. While demand is high for many types of garments, unused quotas remain for some of the most important clothing categories.

One solution, he says, is that the ministries of Trade and Industry grant export licences automatically for garments or permit companies to trade quotas publicly - a solution used by many nations, including China.

Vietnam's garment exports have so far totalled US$3.93 billion in 2004, up 19 per cent year-on-year. Of this, about $2.25 billion came from the US market, $650 million from the EU and $475 million from Japan.

Vietnam and the EU last Friday agreed that quotas on textile and garment exports to the EU would be removed on 1 January 2005.