Local firms need to study trade remedies for suitable business strategies

Thursday, Dec 13, 2018 09:00

Minister of Industry and Trade Tran Tuan Anh

Many local enterprises have learned about trade remedies and efficient use of those tools during implementing trading activities at home.

Minister of Industry and Trade Tran Tuan Anh told Vietnam News Agency about this issue as well outlining solutions to ensure the best interests for the local businesses in dealing with trade remedies on export markets or using those tools on local market.

What does it mean for local businesses when Viet Nam opens its market and must compete with many products from other countries, especially when joining new generation of free trade agreements such as CPTPP and Viet Nam-EU FTA?

Viet Nam has integrated further in the global economy, taking part in the World Trade Organisation (WTO) and 16 free trade agreements (FTAs), especially FTAs with high liberalisation levels ​like the ASEAN Economic Community (AEC), the Comprehensive Partnership and Trans-Pacific Partnership (CPTPP) and the Viet Nam-EU FTA (EVFTA).

According to commitments, Viet Nam has opened the market and cut import tariffs for many commodities, meaning local businesses will face strong competition from imported goods.

Trade remedies, including anti-dumping, anti-subsidy and safeguard measures, play an important role to ensure that the economy can integrate effectively and minimise negative impacts on local businesses. Those measures allow applications by the WTO and other countries, especially large countries who have often applied them in international trade activities.

Recognising the importance of trade remedies in the process of integration, Viet Nam has actively used these to protect the domestic production.

As of October this year, more than 140 cases of trade remedies were for Viet Nam’s exports, including 81 anti-dumping cases, 14 anti-subsidy cases, 27 safeguard cases and 19 anti-dumping and countervailing duty evasion cases. These cases have affected Vietnamese exports, especially seafood and steel products.

Meanwhile, Viet Nam has promoted investigations and applied remedies for some imported products to protect its domestic production according to WTO rules and international commitments.

In the period from 2016 to October this year, the Ministry of Industry and Trade (MoIT) applied six trade remedies for DAP fertiliser, monosodium glutamate (MSG) and steel products such as steel ingot, long steel, galvanised steel, shape steel and colour coated steel sheet.

These measures have helped to ensure fair competition and encourage domestic production. The tools have also protected interests for workers and supported international payments.

By monitoring the impact of the trade remedy issues, the MoIT has found that massive imports of these products have declined significantly.

Therefore, the application of trade remedies is to protect domestic production and employment as well as to reduce dependence on imported goods.

As a result, the trade remedies that have been applied in time have contributed to preventing negative impacts of the imports and unfair competition on the domestic goods, meaning to maintain the domestic production.

Next year, the ministry will continue to use the trade remedies according to Vietnamese laws and the WTO rules to protect domestic production.

However, these measures should be applied in necessary cases for a period to establish a fair competitive environment and to ensure long-term interests of the whole economy.

Recently, many enterprises in Viet Nam faced commercial lawsuits for their products on export markets. What are your comments on enterprises’ knowledge about trade remedies?

In the past, Vietnamese businesses have paid more attention to trade remedies, both in lawsuits and appeals.

In the term of lawsuits, over 4-5 years, Viet Nam’s enterprises have raised lawsuits to apply trade remedies to import goods, although the legal framework was promulgated 15 years ago. This shows that businesses are more active in the use of trade remedies.

For exports, many of the cases have been successfully appealed, including antidumping for Vietnamese tra fish and shrimp in the US and steel products in Australia and Canada.

Large enterprises, especially foreign invested, are well aware of trade remedies but small- and medium-sized enterprises have not paid enough attention.

It is important that trade remedies protect a manufacturing industry, not a specific enterprise or group of enterprises. Therefore, the investigating agency needs to have information from all enterprises in the industry, from producers, importers, raw material suppliers to downstream producers and the final consumer to be able to make objective and accurate decision on the case.

In some cases investigated, there were enterprises relating to the cases that had not provided information or called for help after the State agency has finished the process of investigating and made final conclusions.

Therefore, we expect businesses and associations to closely monitor and cooperate with the MoIT to ensure the best benefits of the businesses.

What should Vietnamese businesses do to prevent damage from trade remedies?

Business should aim to profit but they must have sustainable development in reaching that goal.

In the process of globalisation and economic integration, enterprises including Vietnamese enterprises will face more and more disputes and trade remedies.

This situation requires Vietnamese businesses to think positively and to actively protect themselves. In both lawsuits and appeals, businesses need to consider trade remedies as a long-term business strategy.

For lawsuits, Vietnamese enterprises should closely monitor commodity prices on the domestic market and learn about legal documents on trade remedies. Then, they could have close coordination with the State agencies and have trade remedy measures immediately when the import goods have had unfair competition on the local market.

For appeals, Vietnamese producers and exporters should focus on improving their competitiveness and reviewing export strategies to reduce risks in facing lawsuits in export markets.

In addition, local enterprises should contact the MoIT regularly for law updates in export markets to ensure stability and development in doing business for long time. — VNS

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