Businesses are no longer passive in the face of trade defense investigations.

Early warning work has helped businesses be more proactive instead of passive when they are investigated for trade defense and only have initial information.

Early warning work is now playing an important role as the number of trade defense investigations against Vietnamese export goods is increasing.

According to the Department of Trade Defense, Ministry of Industry and Trade, by the end of September 2024, there were 263 trade defense investigations related to Vietnam's export goods, of which more than half were anti-dumping investigations, followed by self-defense, subsidy and anti-circumvention trade defense investigations.

Mr. Chu Thang Trung - Deputy Director of the Department of Trade Defense spoke with the Industry and Trade Newspaper about this issue.

Early warning work is considered important in helping businesses avoid risks from trade defense investigations: Photo: VNA

Currently, many countries are increasingly conducting trade defense investigations, especially cases of anti-evasion of trade defense measures against Vietnamese export goods. Could you share more about this reality?

Recently, anti-circumvention investigations of trade defense measures are related to many items, belonging to many different product groups, of which the most are metal items (steel, aluminum, copper); chemicals, plastics, agricultural and forestry products (wood and wood products)... In addition, the cases often involve items with large export turnover. Specifically, such as the US investigation of wooden cabinets and dressing tables - this is an item with an export turnover of about 3.4-3.5 billion USD/year; or the US investigation of anti-dumping of energy batteries - this is an item with an export turnover of more than 4 billion USD in 2023.

It is noteworthy that recently the number of investigations against the evasion of trade defense measures against Vietnamese export goods has shown signs of increasing. The nature of this measure, according to foreign investigation agencies, is that the large increase in Vietnamese goods exports is due to the avoidance of trade defense measures being applied to goods of other countries, and due to the shift of production from countries subject to trade defense measures to Vietnam.

In particular, in the past, anti-counterfeiting trade defense investigations mainly focused on fraud, incorrect declaration of origin, and transshipment of goods from third countries to Vietnam for export. However, in recent cases, these issues have not been limited to these issues, but have focused on resolving the questions raised: Do exported goods have added value in Vietnam? Or does Vietnam only carry out some production stages?

So far, how are investigations into the evasion of trade defense measures on exported goods affecting Vietnamese businesses and manufacturing industries, sir?

Regarding the impact of anti-circumvention investigations on trade defense measures, in our opinion, there are two sides: positive and negative for the domestic manufacturing industry as well as the economy in general.

First of all, on the negative side, if in the past, investigations against evasion of trade defense measures focused on detecting fraudulent acts of enterprises such as origin fraud, false declaration, illegal transshipment... Such acts were often caused by only a few enterprises and when discovered by authorities, they would be handled.

Mr. Chu Thang Trung - Deputy Director of the Department of Trade Defense, Ministry of Industry and Trade. Photo: Quoc Chuyen

However, over time, the legal system of trade defense of countries has been developed and improved. Accordingly, countries not only deal with fraudulent behavior but also focus on preventing the movement of value chains and production chains of a country that has been subject to trade defense measures to another country.

For example, in the investigation of anti-evasion of trade defense measures for wooden cabinets, foreign investigation agencies believe that the use of components from China by Vietnamese enterprises to complete the assembly of wooden cabinets and dressing tables is a case of trade defense evasion. Or in the case of solar panels, investigators believe that FDI enterprises bring photovoltaic cells to Vietnam to assemble and create solar panels for export... this is also an act of trade defense evasion.

Therefore, if the anti-evasion measures against trade defense measures are applied, the scope of impact will be much larger, not only a few individual enterprises but can affect an entire manufacturing industry. In particular, during the investigation process, if enterprises do not proactively provide information, the information is inconsistent, the enterprise will have a great risk, which is to be subject to much higher tax rates. Being subject to high tax rates means that enterprises cannot maintain the same export results as before the investigation.

However, in addition to negative impacts, measures to prevent evasion of trade defense measures also have positive impacts. That is, instead of enterprises producing export products with only a small added value in Vietnam, when enterprises produce products with a high added value in Vietnam for export, it encourages enterprises to invest and increase the added value of the products.

In addition, this is a way for businesses to restructure their production and supply chains to reduce risks related to businesses from countries subject to trade defense measures. On the other hand, businesses continue to improve their management capacity and monitor business activities. At the same time, this measure creates pressure for businesses to build a complete traceability system to meet the requirements of foreign investigation agencies. If businesses pass the investigations, they can continue to ensure their export activities.

Through observing a number of investigations against evasion of trade defense measures that have been concluded, we have found that the export volume of Vietnamese goods has not decreased much but even continued to have a high growth rate. This shows that investigations against evasion of trade defense measures are also an opportunity to screen the manufacturing industry and the economy to promote the increase in value of exported goods in Vietnam.

To support businesses to be more proactive in handling foreign trade defense investigations, the Ministry of Industry and Trade is implementing the Project on Building and Effectively Operating the Early Warning System on Trade Defense (Project 316). So far, what is the effectiveness of this work for businesses, sir?

Regarding early warning work, we have determined that as soon as an industry or enterprise is involved in an investigation, risks arise, affecting the enterprise's orders. Through the time of monitoring, supporting and participating in cases, we have realized the importance of early and remote prediction of trade defense investigations. On that basis, the Ministry of Industry and Trade has proposed to the Government to develop a Project on improving the effectiveness of the Early Warning System.

Currently, the Early Warning System has some important contents. That is, remote warnings based on data analysis, through monitoring import and export between Vietnam and some target markets, major export markets; as well as fluctuations in trade defense investigations in the world to identify items with risk of being investigated. From there, close the areas of items that are susceptible to investigation.

We are monitoring almost all of Vietnam's export products to markets such as: the United States, Canada, the EU, Türkiye, India, Indonesia, Thailand, Australia ... And through that, select nearly 300 export products at risk. On that basis, from there, information is provided to businesses, industries and businesses, industries through partners can learn more about the market information, as well as assess the level of risk that may occur in a certain period.

In addition, the system of Vietnamese Trade Offices abroad regularly reports on the market, especially if there is any assessment of risk with any products, the Trade Office will have early information for domestic agencies to handle promptly. From the warnings of functional units, businesses and associations quickly grasp the information and have prepared business plans and strategies, and have prepared resources when being investigated. Up to now, the warning work has helped businesses to be more proactive instead of being passive when being investigated and only having initial information.

In the coming time, to protect the legitimate rights and interests of businesses, as well as ensure sustainable export activities, what key activities will the Trade Defense Department continue to accompany exporting businesses in handling trade defense investigation cases?

The Trade Defense Department is determined to accompany businesses to successfully handle foreign trade defense investigations with four key tasks: warning, prevention, capacity building and supporting businesses in specific cases.

Specifically, we continue to carry out early warning work. Regarding the group of activities to prevent investigations, we have both direct activities and advice for the Ministry of Industry and Trade, and the Ministry of Industry and Trade advises the Government and other ministries and sectors on appropriate policy mechanisms to minimize and prevent trade defense investigations. For example, we continue to promote the recognition of Vietnam's market economy by some countries, including the United States, to reduce the risks of trade defense investigations.

In the prevention activities, it is necessary to focus on providing information to ministries, branches and localities about groups of goods that have production capacity but currently have foreign investment flows causing production capacity to skyrocket, which will easily become the subject of investigation against evasion of trade defense measures. In addition, it is possible to enhance the detection of acts of trade fraud, fraud of origin, etc.

Regarding improving trade defense capacity, the Department continues to coordinate with industry associations and localities to organize seminars, training courses, and disseminate the most basic knowledge to businesses.

Regarding supporting businesses in specific cases, the Trade Defense Department will have different activities, such as consulting and guiding on how to report information in investigations. In each case, we closely monitor every move of the investigating agency. If there is a problem that is not in accordance with international commitments and FTA commitments, we will advise on early intervention to avoid investigations going off the "track" of serving fair competition as a tool to protect domestic goods, and can even bring the case to the World Trade Organization (WTO).

Thank you!

Source: https://congthuong.vn/canh-bao-som-doanh-nghiep-khong-con-bi-dong-truoc-cac-vu-dieu-tra-phong-ve-thuong-mai-356685.html