| Aluminum industry avoids being passive and surprised by trade defense evasion lawsuits. What should Vietnamese businesses do in the face of foreign trade defense investigations? |
Businesses face many risks of being investigated for trade defense.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a new generation free trade agreement with extensive commitments in many economic and trade fields...
The implementation of the agreement over the past five years has helped expand the market, attract investment and bring competitive advantages to exports, but also put Vietnamese businesses at risk of being investigated for trade defense measures.
In fact, the trend of using trade defense tools is increasing in CPTPP member countries. Trade defense investigations are not only more numerous, but also more complex in scale and more diverse in terms of products.
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| Discussion on Limiting Trade Defense Risks When Increasing Exports to CPTPP Markets |
At the Seminar on Limiting Trade Defense Risks When Increasing Exports to the CPTPP Market organized by Industry and Trade Magazine on November 27, Mr. Bui Tuan Hoan - Head of the Americas Department, Department of European - American Markets, Ministry of Industry and Trade shared that there are 4 American countries participating in the CPTPP: Canada, Mexico, Peru and Chile. In addition to Chile, which has a bilateral FTA with Vietnam; Canada, Mexico and Peru are 3 markets that have FTA relations with Vietnam for the first time, so the tariff incentives in the CPTPP have a very positive impact on Vietnam's export activities to these markets.
“It can be said that since the CPTPP Agreement came into effect for Vietnam in January 2019, Vietnam's exports to CPTPP member countries in the Americas have grown strongly,” Mr. Bui Tuan Hoan informed.
This is reflected in the fact that in 2021, exports to the four CPTPP countries in the Americas reached more than 12 billion USD, especially Vietnam's trade surplus of 10.4 billion USD. Of which, exports to Canada reached 5.3 billion USD and increased by 75% compared to the time before the Agreement took effect.
Or for Mexico, exports to this market reached 4.6 billion USD, and increased by over 105% compared to the time before the Agreement came into effect.
Exports to Peru are similar, although they just ratified the Agreement in 2021, also reaching 560 million USD, an increase of 85%. Chile, although it has not ratified the Agreement, also reached 1.7 billion USD, an increase of 63%. So these are very impressive numbers.
According to statistics from Vietnam Customs, Vietnam's exports to CPTPP markets in the Americas in the first 9 months of 2023 reached 8.76 billion USD, down about 15% compared to the same period in 2022. The decrease in turnover was mainly in Vietnam's key export items such as textiles, footwear, seafood, wooden furniture, etc.
Imports from CPTPP markets in the Americas in the first 9 months of 2023 also had a similar decrease of 15%, focusing mainly on machinery, fertilizers, iron, steel, and raw materials.
Mr. Phung Gia Duc, Deputy Head of the Foreign Trade Defense Department - Trade Defense Department, said that for countries with FTAs in general and CPTPP in particular, the number of trade defense cases has increased rapidly. The reason is that when businesses gain advantages and growth momentum from CPTPP in particular and FTAs in general, it will increase the value of Vietnam's exports to many new markets.
Because our goods are popular and highly competitive, they create pressure on the domestic industry of importing countries. Therefore, the domestic industry of the importing country wants the Government of the importing country to apply trade restrictions, the most common of which are trade defense, anti-dumping, anti-subsidy and self-defense measures.
“In addition to the first FTA countries with Vietnam such as Canada, Chile and Peru, many CPTPP members have investigated trade defense measures against Vietnam, such as Australia and Malaysia,” Mr. Phung Gia Duc shared.
Australia has investigated 18 trade defense cases against Vietnam, equivalent to Canada, Malaysia has also investigated over 10 cases; Mexico has 3 new cases and all arose after signing CPTPP.
Thus, this trend is inevitable and unavoidable. When exporting, businesses have joined the global game and must accept that they will have to face trade defense barriers in the future.
In terms of goods, the most vulnerable and most easily investigated goods are those that grow rapidly and strongly. According to statistics from the Ministry of Industry and Trade, goods such as seafood, wood and wood products, steel, aluminum, textiles, chemicals, etc. will be traditional products and are at risk of continuing to be sued for trade defense in the future, even in the CPTPP and other FTAs in general.
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| Items such as seafood, wood and wood products, steel, aluminum, textiles, chemicals... will be at risk of continuing to be sued for trade defense in the future (Illustration photo) |
For businesses, Mr. Vu Van Phu - Vice President and General Secretary of the Vietnam Aluminum Association shared that the aluminum industry has had strong growth in recent years and aluminum businesses have also taken full advantage of the benefits of trade agreements, especially the CPTPP trade agreement with markets such as Canada, Japan and potential markets such as the Americas or Australia, South America... However, businesses in the industry also have to face trade defense investigations.
Enhancing trade defense capacity for businesses
To respond to the increasingly common trade defense investigations, Mr. Vu Van Phu, firstly, on the side of industry associations, the Vietnam Aluminum Association continuously recommends that businesses need to be proactive when being investigated, especially carefully preparing business data files.
As for state management agencies, the Association hopes that the Ministry of Industry and Trade, especially the Trade Defense Department, will maintain the Early Warning Center well to provide information to businesses. Early information is very valuable and precious information for businesses when they are investigated for trade defense.
In addition, the Association really needs support from the Americas - Europe Market Departments, trade counselors in CPTPP markets to connect supply and demand, promote trade for businesses and share information for businesses and industries so that businesses have more opportunities to expand their markets, avoiding dependence on a certain market when being investigated for trade defense.
On the side of the Ministry of Industry and Trade, Mr. Phung Gia Duc emphasized that, aware of the changes in international trade and the increasingly rapid growth of Vietnamese trade as businesses increasingly export abroad, the Ministry of Industry and Trade has been making efforts to promote solutions to support businesses in responding to trade defense.
Specifically, for new markets, the Ministry of Industry and Trade has had in-depth projects on trade defense, seeking the Prime Minister's opinion to establish projects for many years with a long-term view to popularize general knowledge on trade defense. In the coming years, the Ministry of Industry and Trade will limit the target groups and will conduct more in-depth awareness-raising training sessions so that businesses and business associations that do not have enough resources to conduct their own research will have the opportunity to participate.
Second, in those projects, the Ministry of Industry and Trade also emphasizes the regular updating of current legal regulations. One trend that has emerged in the past two years is the trend of investigating and evading trade defense measures. This is an expanded measure to ensure that the effectiveness of the original trade defense measures is maintained and stabilized, and Vietnam is also one of the subjects, one of the countries that is sued a lot.
“The number of lawsuits in the future will increase, and increase very quickly. Therefore, businesses need to regularly update issues related to changes in foreign market laws. We also regularly organize dialogues on trade defense with foreign investigation agencies to understand what they are investigating and how they do it. When there is mutual understanding and dialogue, everything will be easier and businesses will also benefit a lot,” Mr. Phung Gia Duc emphasized.
Next, the Vietnamese Government will protect Vietnamese enterprises but also resolutely prevent enterprises from evading trade defense measures through illegal imports or evading origin, affecting the reputation of enterprises and Vietnamese exported goods.
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