Vietnamese exporters urged to respond to trade remedies

Vietnamese honey products will likely bear an anti-dumping investigation by the US International Trade Commission, along with those originating from Argentina, Brazil, India and Ukraine, according to the latest information from the Ministry of Industry and Trade (MoIT)'s Trade Protection Department.

Son Ha steel manufacturing factory in Hanoi. Photo: Le Nam

Honey is one of many Vietnamese products being subject to trade remedy investigation in foreign markets that would cause serious damage to Vietnamese businesses and producers.

Statistics from the MoIT showed that in the 2017-20 period, there were more than 200 trade remedy cases related to Vietnamese products, including shrimp, tra fish and steel, making total loss of US$12 billion. The number of cases in 2020 was 39, 2.5 times higher than the total number in 2019.

Insiders have said that Vietnam is expanding its export market after having signed many new-generation FTAs, in which non-tariff barriers for exporters have made Vietnamese products more competitive in many foreign markets. 

However, many Vietnamese businesses have become subject to trade remedies, which are actions taken in response to subsidies (countervailing duties), sales at less than fair value (antidumping) and import surges (safeguards).

Explaining the reason for the increase of the cases, Nguyen Phuong Nam, Deputy Director of the Trade Protection Department, said the US and EU sides suspect that Vietnam is a production base of Chinese enterprises who send materials and parts to Vietnam, where they are made into complete products and shipped to foreign countries.

It is believed as the form of avoiding tariffs in the US and EU after changing the origin of products, which will then benefit tax policy under the free trade agreements (FTAs) ​​that Vietnam signed, Nam said.

According to Dr. Pham Tat Thang from the MoIT’s Institute of Industry and Trade Policy and Strategy, during the US-China trade war, the US has imposed additional duties of US$200 billion on many Chinese export product, in which wooden products have been imposed high duty rate.

“It will be an opportunity for Vietnam's export wood processing industry because orders and investment activities will gradually shift from China to Vietnam,” Thang added.

“However, if Vietnam was a place for Chinese enterprises to change the origin of their products, our wood and wooden products will be levied anti-evasion tax," he said. 

A proactive action

Shrimp is one of the key product exports in Vietnam. Photo: T&T Group

Although Vietnamese enterprises have won many lawsuits in recent time, their capacity to handle the similar cases remains modest. They haven't taken initiative against trade remedies in foreign markets, especially in the context of trade tensions between the US and China, according to Le Anh Van, Director of the Centre for Legal Assistance and Human Resource Development under the Vietnam Association of Small and Medium Enterprises.

“The legal system, implementation mechanism and coordination among relevant agencies in dealing with trade defense cases are still inadequate. This has made some businesses lose export market share,” he told Hanoitimes.

To avoid damages from lawsuits, Nguyen Thi Thu Trang, Director of the WTO and Integration Trade Center under the Vietnam Chamber of Commerce and Industry (VCCI), said that businesses should regularly contact the MoIT to update the newly-revised laws of foreign markets, thereby ensuring stability and long-term development for their trade.

Director of the Trade Protection Department under the MoIT Le Trieu Dung said that, to avoid lawsuits, local businesses need to equip themselves with basic knowledge of trade protection regulations, strictly comply with rules of origin certification, and not abet origin frauds.

Dung said his department has stepped up early warning system, proactively updating information to businesses who are subject to trade remedies.

“We will this year coordinate with relevant agencies to build up projects on enhancing trade defense-related capacity and coordination,” he said.

Vietnam has won 65 out of 201 trade remedy cases, accounting for more than 30% so far.