Steel produced at Nguyen Tin Steel Joint Stock Company in Thuan Dao Industrial Zone, Long An Province. As exports expand, Viet Nam is facing an increasing risk of trade defence lawsuits. — VNA/VNS Photo Danh Lam

Viet Nam is facing an increasing risk of trade defence lawsuits as exports expand after the country's active international integration and participation in free trade agreements (FTAs).

Most recently, the US Department of Commerce officially announced it would initiate an anti-dumping investigation on polyester texture yarn (PYT) imported from Malaysia, Indonesia, Thailand and Viet Nam.

Viet Nam’s PYT export to the US increased from US$490,000 in 2017 to US$4.5 million in 2019, making up 8.7 per cent of the US’ PTY import in the period from September 2019 to August 2020.

Steel, which had an average export value of $4.2 billion per year, was the product facing the most trade defence lawsuits.

The Ministry of Industry and Trade’s statistics showed that Viet Nam faced 30 trade defence lawsuits in the first nine months of this year, compared to just 10 in the same period last year. Among them, there were six cases related to steel. The investigations were mainly initiated by the US, India, Turkey, Canada and Australia.

According to Deputy Minister of Industry and Trade Tran Quoc Khanh, Viet Nam participated in 14 FTAs, pushing the country’s exports from $15 billion in 2001 to nearly $100 billion in 2011, with exports expected to reach $270 billion this year.

The ministry said that the main cause for the increasing number of investigations targeting Vietnamese exports is their rapid increase.

Many Vietnamese products were creating significant competition in importing markets, meaning industries in foreign countries were requesting investigations and applications of trade defence instruments.

The problem was that while there was an increasing risk of measures from importing markets, Vietnamese enterprises were still not well aware of trade defence policies.

Phan Khanh An from the ministry’s Trade Remedies Authority of Viet Nam, said a recent survey showed about 15 per cent of enterprises did not know anything about trade defence, only two per cent were well aware of the issue, while the rest had heard about trade defence but did not understand it enough.

An said that many Vietnamese exporters did not know that their products were under investigation for trade defence measures or faced higher tariffs.

According to Phan Mai Quynh from the Viet Nam Trade Remedies Authority, Vietnamese enterprises should not be afraid of such measures but participate actively in the investigation process, such as answering questions by investigators and preparing documents as requested.

She said that the active cooperation of enterprises made up 90 per cent of the results of the investigation.

She also urged enterprises to develop advanced and modern management systems with clear records as well as having legal departments to study trade regulations.

In addition, enterprises should actively cooperate with industry associations and State management agencies to cope with trade defence lawsuits. — VNS