More than two years after the UK-Vietnam Free Trade Agreement (UKVFTA) came into effect, Vietnamese and British businesses have begun to take advantage of the opportunities offered by the agreement.
Bilateral trade between Vietnam and the UK is one of the bright spots, with total two-way import-export transactions reaching 5.87 billion USD in the first 10 months of 2023, up 1.6% over the same period last year.
During this period, many of Vietnam's key export items had significant growth, including rubber products (66%), electric wires and cables (55.5%), telephones and components of all kinds (21%), machinery and equipment (15.5%) and agricultural products such as fruits and vegetables (15.5%), cashew nuts (7.2%) and coffee (5.7%).
However, this also comes with problems. The need to use trade defence instruments and the number of trade defence cases on both sides is increasing because the UKVFTA involves drastic tariff reductions, leading to high competition between businesses.
Therefore, Vietnamese enterprises must thoroughly understand and grasp the commitments in the agreement to prepare and exploit the benefits from the FTA while protecting their legitimate interests.
Currently, Vietnam has a legal system on trade defense in accordance with WTO regulations and international practices to initiate investigations and apply trade defense measures to protect its interests in the context of implementing the Agreements.
The provisions on trade defense in the two Agreements The UKVFTA Agreement is negotiated based on the principle of inheriting existing commitments in the EVFTA Agreement with necessary adjustments to ensure compliance with the bilateral trade framework between the two parties.
The content of trade defense in the two agreements is similar. The two agreements provide provisions on trade defense in Chapter 3 of EVFTA, including 3 Sections and 14 Articles, stipulating commitments between Vietnam and the EU on principles and methods of applying trade defense measures (including anti-dumping, anti-subsidy and self-defense) to exported goods of each Party.
Regarding safeguard measures, this Chapter has separate provisions on bilateral safeguard measures between Vietnam and the EU/UK in addition to global safeguard measures under the WTO.
The chapter on trade defense measures in the two Agreements includes provisions related to the use of traditional trade defense tools in the WTO (including measures: anti-dumping, anti-subsidy and self-defense). Basically, the content of trade defense is based on WTO regulations, while supplementing progressive principles, consistent with our legal system on trade defense, helping the economy and domestic production sectors have legal and progressive "defense" tools, ensuring the effectiveness of participating in the Agreement.
Packing rice for export at Loc Troi Group's factory. Photo: VNA
The new points on trade defense in the Agreement compared to WTO standards are:
- Supplement regulations to limit the use of these tools to avoid abuse and ensure fairness and transparency. These regulations create a more stable and favorable business environment for exporting enterprises. Therefore, in addition to complying with WTO regulations, in the process of initiating, investigating and applying anti-dumping/counterfeiting measures, competent authorities must ensure:
+ Disclosure of information: all necessary information and reference data used to make decisions on trade defense measures must be disclosed immediately after the application of provisional measures and before the final conclusion is made. Disclosure must be in writing and must give relevant parties a reasonable time to comment.
+ Opportunity to comment: Stakeholders have the opportunity to express their views during the investigation (provided that this does not hinder the investigation process and lead to the investigation being overdue).
- The principle of applying lower tax rates, i.e. anti-dumping or anti-subsidy taxes are only at a level sufficient to eliminate injury (while the WTO does not require the use of this rule). This helps both sides limit decisions to impose taxes with unnecessarily high tax rates.
- A noteworthy point is that according to the EVFTA commitment, the two sides will not apply anti-dumping and anti-subsidy measures if this is not in line with public interests (that is, in addition to considering the situation of the domestic manufacturing industry, the investigating country also needs to consider the situation and views of importers, industry associations, consumer representative organizations and downstream businesses).
- Global safeguard measures: EVFTA stipulates that the parties continue to comply with WTO regulations on global safeguard measures, while adding the following commitments:
+ Notification: the party initiating the investigation/preparing to apply measures must notify in writing all basic information and grounds for decision in the case at the request of the other party;
+ Method: Must create conditions for bilateral exchanges between the two sides on safeguard measures and safeguard measures can only be officially applied after 30 days from the failure of bilateral exchanges.
- The 2 Agreements also stipulate a bilateral self-defense mechanism to ensure that tariff reductions under the Agreement do not cause "shocks" to domestic manufacturing industries. The 2 Agreements stipulate a bilateral self-defense mechanism during a transition period of 10 years, creating a legal basis to ensure the rights of the parties to use legitimate self-defense tools to protect domestic manufacturing industries if there is damage or threat of damage due to tariff reductions from the Agreement./.
Thu Ha
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