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Vietnam takes steps to avoid trade war crossfire

By Dat Nguyen   August 9, 2019 | 04:00 am PT
Vietnam takes steps to avoid trade war crossfire
A woman works in a garment factory in Hanoi. Photo by Shutterstock/Jimmy Tran.
Vietnam will strictly define local goods to prevent tariff circumvention by Chinese firms amidst the U.S.-China trade war.

The Ministry of Industry and Trade is drafting a policy that will define a product as "made in Vietnam" if it has a domestic manufacturing added value of 30 percent of its price. Vietnam has not had a clear standard on what locally made goods is, the ministry said last month. 

The new policy will stop local manufacturers setting their own standards on using the "made in Vietnam" label for their products. Products made with imported material with slight changes will not qualify to claim Vietnamese origin.  

Prime Minister Nguyen Xuan Phuc has already signed a decision to prevent the circumvention of trade defense measures, and local government bodies are implementing this order.

A representative of the Vietnam Directorate of Market Surveillance said Friday that the agency is focusing on reviewing companies that have posted a sudden rise in imports from China.

Ta Hoang Linh, head of the U.S.-Europe Market Department under the Ministry of Industry and Trade, said that the department will comply with the latest policies in Vietnam’s export markets to minimize the risk of having goods investigated.

The U.S. is Vietnam’s largest export market and China is its largest import market. While several global companies have shifted their production from China to Vietnam because of the trade tensions, experts have warned that Vietnamese export items, such as wood and seafood, will become possible targets to be hit with U.S. tariffs if the country fails to prevent fraud related to the origin of goods.

In the first half of this year exports to the U.S. rose 27.3 percent year-on-year, while imports from China rose 18.2 percent, according to Vietnam Customs.

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