Efforts to Cope with Trade Barriers

The European Commission (EC) repeals antidumping duties on Vietnam’s leather-capped shoes exported to the EU as of March 31, 2011. Antidumping tax on Vietnam’s leather-capped shoes exported to this market had been officially levied at 10 percent from October 5, 2006. However, the EC also decided to extend import monitoring mechanisms on leather-capped shoes for another year to have ready figures for emergency cases.

 

Immediately after the EC made this decision, the Vietnamese Ministry of Industry and Trade appreciated the move from the European Commission, saying that this was a rational decision, as it helped increase benefits and choices of shoes for European consumers while contributing to the development of trade relations between Vietnam and the European Union. This decision is seen as a positive signal in the context that Vietnam and the EU are looking to negotiations for a bilateral free trade agreement.

 

When the tax was in force, the Vietnamese shoe industry with over 500,000 workers, of which nearly 90 percent were women, had to struggle to survive and grow. Indeed, when the antidumping tax was levied more than five years ago, the Vietnamese footwear industry was seriously affected as production and export slumped. Furthermore, the tax imposition also impinged on interests of direct parties in distribution channels and value-added chains like designers, merchants, suppliers and especially consumers in EU nations.

 

The exportation of tra and basa (pangasius) fish to the US market has also reaped initial success. On March 15, 2011, the United States Department of Commerce (DOC) announced a final decision reducing antidumping tax for Vietnamese tra filet exported to the US for the sixth period of administrative review (POR6), from August 1, 2008 to July 31, 2009. Accordingly, antidumping duty on POR6-affected companies decreased significantly compared to preliminary antidumping tariffs that the DOC had previously announced.

 

According to the Trade Remedies Council (TRC) under the Vietnam Chamber of Commerce and Industry (VCCI), faced a total of 36 antidumping lawsuits from 1994 to July 2010. In addition, the country was involved in five trade remedy cases and one subsidy case, primarily related to footwear, agricultural, aquatic, mechanical and industrial products.

Tax rates imposed on five selected mandatory respondents, namely Vinh Hoan, Vinh Quang, Agrifish, ESS LLC and South Vina, are significantly reduced. Specifically, Vinh Hoan, CL-Fish and Vinh Quang are totally free of tax. Agifish, ESS LLC and South Vina enjoyed a tax reduction from US$4.22 per kilo to $0.02 per kilo.

The final rates were very low compared with the proposal of a 130 per cent antidumping tax that was temporarily imposed on September 15, 2010.

 

According to Vietnam Competition Authority (VCA), antidumping cases have seriously impacted the Vietnamese economy because they directly cause exports to contract. Moreover, Vietnamese companies have to pay to hire lawyers and follow proceedings. In the past time, the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Competition Authority, business associations and other agencies actively supported companies to minimise losses in antidumping cases and advise them to avoid possible lawsuits beforehand.

 

In 2010, the EC abolished antidumping duty on Vietnamese bicycles and the United States reduced taxes on Vietnamese shrimps. The EU has considered reducing antidumping duty on Vietnamese steel screws. Vietnam has been successful in two trade remedy cases related to STPP (Sodium Triphosphate) chemicals and bicycle products from India and the Philippines.

 

Nonetheless, Vietnam is not successful in all antidumping cases. It failed to reduce an antidumping tax on shrimp. In 2010, the country brought the US shrimp antidumping case to the WTO. This was the first time Vietnam brought a trade dispute case to this trade club since its entry in 2007. However, on March 15, 2011, the US International Trade Commission (ITC) formally voted in favour of the final decision that antidumping duty would be imposed on Vietnamese frozen warm-water shrimp for another five years. Explaining its decision, ITC said the abolition of antidumping tax on shrimp products imported from Vietnam might lead to repeated or continued dumping, thus causing significant damage on the US shrimp industry.

 

Huong Ly