Since 1994 Viet Nam has come up against 80 lawsuits under the WTO's trade defence provisions, a fifth by the US and 22 per cent against the steel industry.

HCM CITY (Biz Hub) — Vietnamese export firms need to improve their awareness and preparations to cope with the World Trade Organisation's trade defence that allows importing countries to take action against exporting nations, a senior official said.

Speaking at a seminar in HCM City yesterday on "Sharing experiences on how to cope with and take advantage of the WTO's trade defense and dispute settlement mechanism," Nguyen Phuong Nam, deputy head of the Ministry of Industry and Trade's Competition Department, said: "Knowledge of the WTO's trade defence is very important for export firms to reduce risks and losses in the international trading environment."

The WTO recognises three principal trade defences — anti-dumping, anti-subsidy, and safeguard instruments.

Anti-dumping is designed to allow countries to take action against imports that cause or threaten to cause material injury to the domestic industry.

Anti-subsidy measures allow importing countries to take action against certain kinds of subsidised imports. "Subsidies" are defined as financial assistance from a government to a company.

Safeguard measures are defined as "emergency" actions with respect to increased imports of particular products, where such imports have caused or threaten to cause serious injury to the importing member's domestic industry.

Since 1994 Viet Nam has come up against 80 lawsuits under the WTO's trade defence provisions, a fifth by the US and 22 per cent against the steel industry.

"Because of limited financial and human resources, export firms have limited knowledge of the law and always suffer very big losses in the long term," Nam said.

They also suffer because they do not know foreign languages and are reluctant to face lawsuits, he said.

Trade defense lawsuits hit export companies' competitiveness and exports, often cause them to lose markets and spend huge amounts of money on lawsuits, and see them hit with high import tariffs for five years and more.

"Viet Nam won two anti-dumping lawsuits in 2010 and 2012 by using safeguard measurements," lawyer Dinh Anh Tuyet said.

"However it took one to two years to persuade the Government and companies had to spend a lot and lost many opportunities."

She said enterprises must learn about international laws when they start exporting and be well prepared to avoid lawsuits. — VNS