DNVN - It is expected that in July, the US Department of Commerce will decide whether Vietnam can change its status from a non-market economy to a market economy. Experts say that Vietnam's recognition as a market economy will create advantages for Vietnamese export enterprises...
On September 8, 2023, the Vietnamese Government officially requested the US Department of Commerce (DOC) to consider recognizing Vietnam as a market economy.
On May 8, DOC held a hearing to review the case and the investigation process. From the date of the official proposal to the date of the decision is 270 days, and it is expected that on July 26, DOC will officially have the final conclusion.
BSC Securities Company believes that the US recognition of Vietnam as a market economy will have a more positive impact in the long term than the short term.
Vietnam will attract more FDI capital, promote economic growth, bring Vietnam deeper into the global value chain, improve labor productivity, avoid the middle-income trap and open up great opportunities for Vietnamese enterprises to develop and compete in the international market.
The US recognition of Vietnam as a market economy will have a positive impact on exports.
Currently, the US still considers Vietnam a non-market economy. In case the US conducts an anti-dumping investigation on Vietnamese exports, the US will use the value of a third country (considered a market economy) to calculate the production costs of Vietnamese enterprises instead of using real data. This makes the calculated figure likely to have a large dumping margin, making the anti-dumping tax rate that Vietnam must bear higher.
If in July this year, the US recognizes Vietnam as a market economy, then in case of investigation, the US will use Vietnam's own production prices, which somewhat more accurately reflects the domestic economy.
According to BSC, the US recognition of Vietnam as a market economy will have a positive impact on exports. Currently, the US is Vietnam's most important export country with an export value of 97 billion USD in 2023, accounting for ~30%. Recognizing Vietnam as a market economy will reduce the risk of anti-dumping taxes in the future, helping Vietnamese goods have a fairer chance to compete in this market.
In addition to the positive impact on the exchange rate, the US recognition of Vietnam as a market economy also has a positive impact on FDI capital flows. The majority of Vietnam's exporting enterprises are FDI enterprises. Reducing risks related to anti-dumping taxes will create a safer and healthier playing field for enterprises. In addition to the trend of shifting production out of China, this will also contribute to attracting more FDI capital flows into Vietnam.
Regarding the seafood sector alone, Ms. Le Hang - Communications Director of the Vietnam Association of Seafood Exporters and Producers (VASEP) assessed that seafood exports would have many advantages if the US recognized Vietnam as having a market economy.
In the past 10 years, seafood exports to the US have fluctuated between 1.5 billion USD - 2.1 billion USD, accounting for a significant proportion, from 18% - 23% of Vietnam's total seafood export turnover. In particular, the US has always been the leading consumer market for key products such as shrimp, tuna, pangasius, etc.
On the other hand, Vietnam is also an import partner for US seafood traders with an import value of 65-70 million USD/year. The prominent imported products are salmon, herring, pollock, flounder, etc.
"If Vietnam is recognized as having a market economy, this will be an advantage for Vietnamese enterprises in the upcoming administrative reviews of anti-dumping taxes on shrimp and tra fish and anti-subsidy investigations.
In addition to issues such as anti-dumping tax, anti-subsidy tax, other barriers and regulations may also be viewed and reviewed with a more relaxed and favorable perspective for the Vietnamese seafood industry. At the same time, it is also an opportunity to attract more investors from the US to the Vietnamese seafood industry, expanding opportunities for seafood trade between the two countries," Ms. Hang assessed.
Meanwhile, according to the Ministry of Industry and Trade, for trade defense cases, the recognition of market economy status is of particular importance. This recognition will help reduce anti-dumping taxes on imported goods from Vietnam, while goods from non-market economies are often subject to higher taxes in anti-dumping tax investigations.
When tariff barriers are removed or relaxed, Vietnamese seafood products will regain their competitive advantage in price in the US market, while helping US consumers have more access to quality and affordable seafood from Vietnam.
It is known that a total of 72 countries have recognized Vietnam as a market economy, including major economies such as the UK, Canada, Australia, Japan, South Korea, etc.
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Source: https://doanhnghiepvn.vn/kinh-te/doanh-nghiep-xuat-khau-duoc-loi-gi-neu-my-cong-nhan-viet-nam-la-nen-kinh-te-thi-truong/20240521094837332
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