Vietnam faces plethora of trade defense suits

By Phuong Anh   October 29, 2020 | 11:00 pm PT
Vietnam ranked 15th globally in the number of trade defense investigations it faced between 1995 and 2019, WTO statistics show.

In the first nine months of 2020 it faced investigations in nearly 200 cases involving exports of $12 billion.

The statistics were provided by Le Trieu Dung, director of the Ministry of Industry and Trade’s Trade Remedies Authority, at a meeting on trade defense on October 27.

Pham Chau Giang, deputy director of the authority, said these cases caused huge damage. "Even at the time of initiating trade investigations, Vietnam's exports decrease significantly. In some cases Vietnam stopped exporting some products after two months of investigation."

Enterprises also risk losing the market in the country that initiates the investigation and other markets due to the widespread effect, she said.

For instance, after the U.S. imposed anti-subsidy tax, some companies producing plastic bags used in supermarkets had to shut down, she said.

"These matters affect not only the economy, but also social security."

Dung pointed out three reasons for the surge in trade defense cases against Vietnam.

"First, Vietnam has deeply integrated into the global economy. Second, Vietnamese goods enjoy many preferences and its increased export capacity threatens the market share of manufacturing enterprises in importing countries. Third, the world is facing an increasing trend of protectionism."

The Ministry of Industry and Trade has recommended that businesses should develop an export strategy that focuses on market diversification.

They need to enhance their competitiveness through quality rather than price, equip themselves with basic knowledge of trade defense laws and prepare resources to deal with the risk of being sued, it said.

In terms of Vietnam's imports too there are some risks of trade remedy cases, Nguyen Thi Thu Trang, director of the WTO and International Trade Center run by the Vietnam Chamber of Commerce and Industry, said.

She cited figures from the Ministry of Finance showing that imports from ASEAN member countries had increased by 12.4 percent from 2015 to 2018, from China by 11.8 percent and from the Eurasian Economic Union by 48.6 percent.

"The amount of goods imported into Vietnam is increasing and will increase sharply thanks to free trade agreements it has signed.

"Vietnam's major import partners are notorious for facing trade defense cases."

In 1995-2019 there were 1,515 cases against China, more than 500 against ASEAN members (Indonesia, Philippines, Thailand, Singapore), 462 against Korea, and 293 against India, she said.

She went on to explain the risks Vietnam faced.

Vietnam imports a lot from these countries, and they could use Vietnam as a transit point to export to third markets, taking advantage of its FTAs, she said.

Vietnam is set to sign 13 free trade agreements that will scrap 70-100 percent of tariffs in the next 10 years.

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