Trade remedies offer Vietnamese firms little protection in international playground

Vietnam has spent 10 years developing legal regulations to deal with trade remedies, but the country seems scared of using these tools to protect local enterprises, especially compared to its international peers, according to a conference organized by the Vietnam Competition Authority and the Vietnam Chamber of Commerce and Industry on June 2.

Vietnamese enterprises and authorities have focused more on trade remedies in the past five years as trade agreements have helped remove tariff barriers. But other countries use non-tariff barriers to protect domestic enterprises and production from anti-dumping, anti-subsidy and safeguarding measures.

Vietnamese enterprises need to impose more trade remedies in the era of international inegration. Photo by Reuters/Kham

Head of the Investigation Department under the Vietnam Competition Authority, Pham Chau Giang, said that Vietnamese enterprises are constantly battling investigations in foreign markets, but do not have the same protection at home.

Once the Trans Pacific Partnership Agreement takes hold in 2018, capital from international investors is expected to increase 25 to 35 percent, and the relationship between foreign and domestic enterprises will be closer.

“Foreign enterprises are likely to import materials or even transfer all their production to Vietnam in order to produce and sell goods here and avoid trade remedies. This could happen when foreign investors can easily prove a close connection with a domestic enterprise,” Professor Pham Tat Thang from the Ministry of Industry and Trade said.

Half of the cases under scrutiny in Vietnam involve steel products. “Vietnam has recently imposed measures on steel imported from China, but other countries applied them a long ago to protect their domestic steel sectors from attack. This shows Vietnam has been slow to protect itself," said Nguyen Phuong Nam, deputy director of the Vietnam Competition Authority.

According to Director of the WTO Center Nguyen Thi Thu Trang, petitioners are mainly dominant enterprises that occupy mostly of the market share. For instance, prior to an investigation into safeguarding measures on vegetable oil, the petitioners accounted for 100 percent of the market share. Recently, in an investigation into anti-dumping of re–painted galvanized iron, the petitioner had a 50 percent market share.

The VCCI said that more than 80 percent of Vietnamese enterprises are small and medium sized. The above-mentioned figures prove that only giant and large enterprises are protected by trade remedies, Trang said.

Trang said the lack of attention paid to trade remedies by Vietnamese enterprises is worrying, but the crucial obstacle is access to information which needs to be provided more to import and export enterprises.

Thang concluded that “to integrate smoothly into the international market and benefit from signed agreements, Vietnam needs to be well-prepared with a legal framework and the necessary resources to cope investigations, and enterprises will need to know when and where to ask the government to enforce counter-measures.”