Flexible to Cope with Trade Barriers

According to the Trade Remedies Council (TRC) - an advisory body of the Vietnam Chamber of Commerce and Industry (VCCI), from 1994 to July 2010, Vietnam faced a total of 36 antidumping lawsuits, seven safeguard cases and one anti-subsidy case. Main targets were footwear, agricultural products, aquatic products, mechanical products, industrial products.

 

In 2010, the country had to deal with four antidumping cases. Specifically, the United States is investigating tax evasion charged on steel hangers; Argentina and Turkey are probing air conditioners; and India decided to apply an import duty of 64.09 percent on DVD recordable discs in five years dating from July 2, 2010. Then, Vietnamese exporters had to pay a tax amount of US$50,51 for every 1,000 discs.

 

Amongst seven safeguard cases Vietnam confronted, three came from the Philippines, with charges against floating glass, paving tiles and STPP (sodium triphosphate) chemical. Four remainders were accused by India and Canada, with allegation against rolled steel, footwear, bicycle and manioc. The only anti-subsidy litigation was related to PE plastic bags for retailing.

 

According to the Vietnam Competition Authority, antidumping cases have caused serious impacts on the Vietnamese economy because they directly dent export earnings. Moreover, Vietnamese respondents have to spend much on hiring lawyers for their cases. Economic impacts knock not only sued producers but also other related industries. This is a chain reaction of industries accused of antidumping.

 

Tra (or pangasius) fish is confronting highest pressures from trade remedies. In September, the United States raised the antidumping duty on Vietnamese tra fish, nearly doubling the rate in 2008 and 2009. In November, the fish was almost caught in a new trade barrier in the EU when it was added to the Red List - a list of foods recommended not for use by the World Wildlife Fund (WWF) - in six European countries. Most recently, on December 20, Brazilian importers informed that the Vietnamese pangasius had been labelled “special list." Accordingly, the Brazilian government may soon apply a higher tariff on the Vietnamese tra fish which may reach 35 percent.

 

As regards wooden products, Vietnam’s main importers like the U.S. and the EU are building trade remedies to protect their domestic production. The U.S. Lacey Act, which came in effect from April 1, 2010, is divided into three steps. According to the first step which has been applied since 2010, businesses must declare on forms provided by the U.S. Department of Customs. In the near future, the EU Forest Law Enforcement, Governance and Trade (FLEGT), which will take effect from 2012, will force Vietnam to prepare to comply with.

 

Several trade remedies have been intensified in many countries, including the REACH (Registration, evaluation, authorisation and restriction of chemicals) standard - a new European Community regulation on chemicals and their safe use. Seafood exporters are in trouble with IUU Law (Illegal, unreported and unregulated fishing), which was enacted by the EU from January 1, 2010. The U.S. Consumer Product Safety Improvement Act (CPSIA), which was effective from February 10, 2010, has been applied to the garment and textile industry. Indonesia has issued a regulation forcing exporters of fruits and vegetables to have the Council of Architecture (CoA) certificate granted by quarantine authorities.

In the past time, the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Competition Authority, professional associations and many other agencies have supported businesses to reduce damage caused by antidumping lawsuits and advise them to avoid new cases.

 

Recently, the Vietnam Competition Authority has built an early warning system for dealing with foreign antidumping cases against Vietnamese exports. Accordingly, the system will provide database for Vietnam’s five main exporting sectors, namely footwear, garment, seafood, wooden furniture and electric cable as well as risks of litigations.

 

Vietnam has brought a lawsuit against US antidumping measures on imports of shrimp to the World Trade Organisation (WTO). This is the first time the country launched a trade dispute at the global trade arbiter since it became a full member in 2007. Vietnam has recently protested the WWF for branding the tra fish on the Red List. After a short time, the WWF has removed the fish from this negative list.

 

Outbound shipments of wooden products, aquatic products, footwear, garments and agricultural products still went up steadily even when many laws with stricter regulations took effect. This proved that the world was very keen on Vietnamese products. Notably, apparel and textile export topped US$10 billion in the first 11 months; and wooden products raked in over US$3billion, up 32.6 percent over the same period in 2009. Seafood export was expected to beat the annual target by 6.5 percent to reach US$4.9 billion in 2010, up 16.4 percent from 2009.

 

With efforts of Vietnamese exporters, many countries have removed antidumping tax on Vietnamese products in 2010. The EU abolished antidumping duty on Vietnamese bicycles in July; the U.S slashed tax on Vietnamese shrimps and the EU considered reducing antidumping duty on Vietnamese steel screws.

 

Vietnam was also successful in two safeguard cases, namely STPP chemicals and bicycles from India and the Philippines, as Vietnamese exporters proved that the two products did not hurt their home industries.

 

The reduction or abolition of antidumping duty will first of all help consumers in importing countries buy products at lower prices. In addition, this action will help Vietnamese enterprises to survive and develop, not go bankrupt or operate in moderation. These achievements are resulted from efforts and effective coordination of business associations, exporters and authorities to deal with trade barriers.