Beware of Trade Remedy Cases

Lawyer Nguyen Mai Phuong, member of Mayer Brown JSM, said that the economic crisis is also a time for governments to strengthen the politicisation of trade remedies and protectionism. The objective of this policy is to protect domestic production from the trend of increasing commodity exports of developing countries. From the end of 2012 into early 2013, many warnings have been raised concerning the initiation of trade remedy cases against several Vietnamese exports, including steel products exported to Thailand, cashews to India, and cement to South Africa.

Besides, some countries also tend to conduct "double" cases (both anti-dumping and trade protectionism) to enhance and strengthen its protectionist policies, such as anti-dumping, anti-subsidies on shrimps and steel coat hangers exported to the United States.

 

To address this, she recommended that every business should prepare the necessary strategies and policies to respond reasonably to minimise the possible damage, if unfortunately businesses have to cope with trade remedy cases.

 

Mr Vo Tan Thanh, Director of VCCI-HCM, said with strategic direction to participate in international economic integration in broad and comprehensive ways in accordance with the conditions of the country, Vietnam has negotiated and signed free trade agreements with many partners, especially since 2010, Vietnam has been actively involved in negotiating the Trans-Pacific Trade Agreement. Also in recent years, when facing the situation of the global economic crisis, many countries have increased the application of trade remedy measures such as new barriers to protect domestic goods. Since Vietnam has not been recognized by a number of countries as a market economy, along with the process of deepening economic integration, Vietnam continues to deal with more and more trade remedy cases. Specifically, the Trade Remedy Council (TRC) under the Vietnam Chamber of Commerce and Industry, since 1994 when Columbia sued Vietnam for rice dumping, there have been 50 cases related to anti-dumping and 4 anti-subsidy cases.

 

Anti-dumping and anti-subsidy actions are major challenges in the process of international economic integration, foreign market access and improving production and export of Vietnamese enterprises. In order to overcome these challenges and take advantage of opportunities that integration brings, what businesses need to do first is to understand the inner meaning as well as the context of the developments related to this topic and strengthen links between businesses, associations and competent authorities.

 

Mr Matthew McConkey, partner of Mayer Brown and manager of the firm’s Government and Global Trade practice in Asia, said that most anti-dumping investigations in the United States were initiated by the domestic industry. Therefore, Vietnamese businesses’ opponent in the anti-dumping cases is not the US government but the domestic industry. According to Matthew McConkey’s recommendations, when having information about the case, businesses should be prepared carefully. Once the United States has initiated proceedings, Vietnamese enterprises will lose the opportunity to prepare in advance; then they will face greater possibility of losing the case. In addition, businesses facing a lawsuit should team up, in preparation for the lawsuit. Especially when a trade dispute is already taking place, every business needs to protect themselves against an unreasonable verdict.

 

Head of American Market Department (Ministry of Industry and Trade) Nguyen Duy Khien said that from 2002 to present Vietnam has experienced seven cases with the United States. Not only the United States, but in other import markets such as the EU and Germany, the number of cases has increased in proportion to the trade volume between the two sides. According to Mr Khien, the losses of Vietnamese enterprises in anti-dumping and anti- subsidy cases are mainly due to hiding information about accounting documents and data of business. So before each case, enterprises need to check the accounting documents and data storage. Information about prices, published date, shipping cost, and adjusted prices are the most obvious. Also, information about the costs of production and other costs also has to be transparent.