Proactively turn danger into opportunity

The number of trade defense investigations into Vietnamese export goods is increasing, so businesses need to strengthen their response to turn risks into opportunities.

Big risks from trade defense investigations

At the seminar "Preventing evasion of trade defense measures, maintaining sustainable export flows of goods" on November 1, organized by the Industry and Trade Newspaper, Mr. Chu Thang Trung - Deputy Director of the Department of Trade Defense, Ministry of Industry and Trade said that the number of trade defense investigations against Vietnam's export goods is increasing day by day. Accordingly, by the end of September 2024, there were 263 trade defense investigations related to Vietnam's export goods, of which half were anti-dumping, self-defense, anti-subsidy and anti-evasion trade defense investigations.

In particular, trade defense investigations are covering many products, especially metals (steel, aluminum), chemicals, plastics; agricultural and forestry products, notably wood and wood products. “ Most of the investigations are related to products with high export turnover. For example, the US investigation against tax evasion on wooden cabinets and dressing tables - this is a product with an export turnover to the US market of 3.4-3.5 billion USD (in 2023); or the US investigation against dumping of energy batteries, a product with an export turnover of more than 4 billion USD (in 2023)" - Mr. Trung said.

The number of trade defense investigations into Vietnamese export goods is increasing day by day. Photo: Duc Duy/VNA

Notably, according to the leader of the Trade Defense Department, recently, countries have increased investigations against evasion of trade defense measures due to the shift of production as well as markets accusing goods exported from Vietnam of evading trade defense measures being applied by the market to goods from other countries. " If in the past, investigations against evasion of trade defense measures focused on fraud and failure to declare the correct origin, now the focus is on investigating whether goods produced create much added value in Vietnam or only perform some production stages" - Mr. Chu Thang Trung said.

The United States is currently the market that initiates the most trade defense investigations and anti-evasion investigations of trade defense measures against Vietnamese export goods. Mr. Do Ngoc Hung - Commercial Counselor, Head of the Vietnam Trade Office in the United States said that in October 2024, 2 Vietnamese products were requested by the plaintiff to be investigated for anti-dumping and anti-subsidy measures. Accordingly, Vietnamese export goods have faced 4 trade defense investigations in less than 30 days from the US market.

According to Mr. Do Ngoc Hung, the United States increased trade defense investigations due to the sharp increase in Vietnam's export turnover to this market. In the first 9 months of 2024 alone, Vietnam's export of goods to the United States reached more than 88 billion USD; in addition, the United States has not yet recognized Vietnam as a market economy, so exported goods are often targeted for trade defense investigations.

In addition, Mr. Do Ngoc Hung added that in the context of the upcoming US presidential election, the correlation of support and power between the two candidates is very close, the government's policies are all directed towards the US in the hope of gaining more votes. "Some unions representing US workers have voiced their support for the government and of course, businesses in that industry want their support to be worthy and rewarded through protective and technical protection measures, " Mr. Hung said.

Currently, the negative impact of trade defense investigations, especially investigations against evasion of trade defense measures on Vietnamese export goods, is very large. From the perspective of a representative of the wood industry, Mr. Ngo Si Hoai - Vice President, General Secretary of the Vietnam Timber and Forest Products Association shared that right from the stage of filing a lawsuit, businesses have suffered losses and during the investigation process, businesses are always in a state of "restlessness". If high taxes are imposed, it is like being "embargoed" and there is no way to export goods. In particular, when being put on the "black list" of trade defense investigations, it is considered as having to say goodbye to the market with huge losses.

Mr. Chu Thang Trung also pointed out that in the past, anti-evasion trade defense investigations focused on detecting fraudulent and illegal transshipment acts, which were often committed by only a few businesses. However, the system of regulations against evasion of trade defense measures in countries has now been improved, not only focusing on investigation and handling but also on prevention.

“Accordingly, the scope of application of anti-avoidance measures against trade defense measures will be much larger, possibly affecting an entire industry, not just a few businesses. In particular, during the investigation process, businesses that do not proactively provide information or provide inconsistent information will be subject to much higher tax rates,” Mr. Trung emphasized.

Seminar "Preventing evasion of trade defense measures, maintaining sustainable export flow of goods". Photo: Quoc Chuyen

In danger there is opportunity

Currently, along with the process of liberalization and globalization, protectionist policies have reappeared in many countries in different forms. Developed countries are increasingly concerned with issues of consumer safety, sustainable development, and climate change. From there, new standards and regulations related to supply chains, raw materials, labor, and the environment for imported products are established. In particular, many markets are increasing investigations into the application of trade defense measures and investigations against the evasion of trade defense measures. This context is posing more difficulties and challenges for Vietnam's export activities.

Sharing about this issue, Mr. Ngo Si Hoai said that, in the face of the "wave" of trade defense investigations, enterprises are important subjects, need to be prepared with knowledge and defense skills. In particular, when being investigated, it is necessary to cooperate, fully declare information to the investigation agency carefully, especially cannot "leave it all" to lawyers in the case. " Enterprises with trade defense skills can overcome difficulties and the risk of being blacklisted is not much. Accordingly, in danger there is opportunity, if we strengthen corporate governance, practice accountability, transparent production, we have the opportunity to develop the market and export sustainably" - Mr. Hoai said.

In the coming time, to protect the legitimate rights and interests of enterprises, as well as ensure sustainable export activities, Mr. Chu Thang Trung said that the Trade Defense Department will continue to accompany export enterprises in handling foreign trade defense investigations through key programs and activities. In particular, the Department will enhance the capacity of enterprises, implement early warning activities, analyze and evaluate high-risk items for trade defense investigations from markets. At the same time, the Department will carry out activities to advise the Ministry of Industry and Trade and the Government to have effective response policies to trade defense investigations from foreign markets.

On the side of the Trade Office, Mr. Do Ngoc Hung also informed that, from the market perspective, the Vietnam Trade Office in the United States is committed to always supporting the legitimate rights and interests of exporting enterprises, providing support within the scope of its functions and tasks so that enterprises can achieve the best results in lawsuits. At the same time, the Trade Office will always and continue to monitor import-export data, collect information from many related parties to be able to give early warnings of possible lawsuits. In particular, it will strengthen relations with law firms with extensive experience in supporting enterprises in cases.

“The Vietnamese Trade Office in the United States will also utilize information channels to exchange and work with partners and relevant US agencies, increase consultation, express views and arguments based on the direction of the Ministry of Industry and Trade. The Trade Office will also report to the Ambassador and coordinate with relevant units of the Embassy to lobby and exchange at different levels to support the handling of the case,” said Mr. Hung.

Source: https://congthuong.vn/dieu-tra-phong-ve-thuong-mai-hang-hoa-xuat-khau-gia-tang-chu-dong-bien-nguy-thanh-co-356233.html