| Businesses must proactively avoid trade defense measures. How is the trend of trade protectionism taking place? |
Vietnam's export goods are also under great pressure from trade defense investigation measures (TMR).
Trade protectionism is a global trend.
The 2022 annual report of the Trade Defense Department (Ministry of Industry and Trade) recently released shows that trade protection policies can take many forms, of which tariffs are the main measure used. There are also non-tariff barriers such as: technical standards, hygiene and safety, quotas, exchange controls, import licenses, customs procedures requirements, and strict rules of origin requirements.
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| Exported Vietnamese steel is a product that regularly faces trade defense lawsuits. Illustrative photo. |
According to the report, protectionist trade policies can allow governments to promote domestic trade and production of goods and services, apply tariff subsidies and quotas, or restrict foreign goods and services in the market. However, in the long run, abandoning free trade policies or implementing protectionist measures can have negative effects on countries such as slowing economic growth and increasing inflation.
Trade protection measures can limit the import of goods from foreign countries. When imported goods are imported with high tax rates, the price of those goods will be sold at a high price, reducing the competitiveness of imported goods.
In addition, these policies can protect domestic producers, promote trade and production of domestic enterprises; domestic goods have the opportunity to access less competitive markets because protectionist policies have limited imported goods from abroad.
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| Vietnamese pangasius is often subject to anti-dumping taxes imposed by the US. Illustrative photo |
Notably, protectionism has become a global trend since 2008, when countries used new policies to support domestic businesses in the face of competitive pressure from foreign businesses.
However, in recent years, the world has witnessed the explosion of strong trade protection policies, especially trade conflicts between major economies: China - US; China - Australia; US - EU; EU and China; Russia - Western countries.
Focus on early warning of trade defense
To protect the interests of businesses as well as maintain the flow of trade for export goods, recently, the Ministry of Industry and Trade has implemented many solutions to support businesses on the issue of trade remedies, in which, special attention is paid to early warning work.
Chu Thang Trung, Deputy Director of the Trade Remedies Authority (Ministry of Industry and Trade), said: The Authority has regularly monitored and provided a warning list of some export items at risk of being investigated for trade remedies, investigated for circumvention of trade remedies and origin fraud. This activity has provided relatively accurate predictions, helping state management agencies and enterprises to be more proactive in production, export, prepare resources, and develop effective response plans in many cases.
In addition, the Department of Trade Remedies regularly organizes training courses to raise awareness and knowledge about trade remedies in a general and in-depth manner for manufacturing and exporting enterprises, associations, and related agencies. In addition, the unit closely follows the exchange and provision of information about trade remedies so that related enterprises and associations can update promptly.
Director of the WTO Integration Center - Vietnam Federation of Commerce and Industry Nguyen Thi Thu Trang said that in the context of deep economic integration, many free trade agreements are implemented with tariff incentives, import tax reduction, expanding market access opportunities for businesses, but trade defense measures also exist in parallel.
Being investigated by foreign countries and applying trade remedies will affect general export activities. If businesses do not handle the situation well, their export goods will be subject to high trade remedies taxes, reducing their competitive advantage and leading to the loss of part or all of the export market.
Therefore, businesses need to clearly understand the importance of handling PVTM cases well and the key role of businesses when participating in handling cases. In particular, businesses need to assess and predict the risk of being investigated for PVTM in order to prepare early and proactively handle problems when they arise.
In the last months of 2023, the Trade Remedies Authority will continue to implement the Trade Remedies Law in a public, transparent and fair manner; investigate new Trade Remedies cases upon request from the domestic manufacturing industry, and review Trade Remedies measures currently in effect on imported goods.
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