Expanding exports is not only a great opportunity but also a challenge for Vietnam's economy. Although Vietnam's export of goods has improved in recent times and there is still a lot of room for market expansion, there are still many difficulties and limitations for businesses. One of the major challenges is that countries conduct investigations and apply trade defense measures to Vietnam's exports.
To date, there have been 263 trade defense investigations initiated by 25 markets on Vietnam's export goods. These include important export products such as seafood, iron and steel, aluminum, wood, fiber, etc. The leading cases are anti-dumping investigations (144 cases), 53 self-defense cases, 38 cases of anti-evasion of trade defense measures and 28 anti-subsidy cases.
On the other hand, opening the domestic market to goods from partner countries also helps the Vietnamese market become more vibrant and competitive. However, when preferential tariffs are rapidly reduced, there is a risk of massive foreign imports or unfair competition into Vietnam, causing damage to domestic manufacturing industries.
Therefore, the use of trade defense instruments is necessary to combat unfair competition in imports and to remedy significant damage caused by these phenomena.
In fact, since the first trade defense case in 2009, Vietnam has conducted 30 investigations and is maintaining the application of 22 trade defense measures on imported goods such as steel, wooden products, plastics, fibers, fertilizers, sugar, MSG, etc.
The total annual revenue of domestic manufacturing enterprises participating in trade defense cases is estimated at 475 trillion VND. The number of direct employees working at enterprises is about 36,000 people. Annual budget revenue from trade defense tax is from 1,200 to 1,500 billion VND.
For export industries, properly handling trade defense investigations has helped businesses take advantage of and maintain the results brought about by the international economic integration process.
Mr. Trinh Anh Tuan, Director of the Department of Trade Defense said: “We are also constantly improving the legal system on trade defense, ensuring that regulations are always in line with international standards and meet the actual requirements of the market. Transparency and effectiveness in trade defense work will help create a healthy competitive environment, where businesses can maximize their potential and contribute to the sustainable development of the country .”
Trade defense tools such as anti-dumping, anti-subsidy and safeguard duties, when used appropriately, in accordance with legal regulations and international commitments, are contributing to supporting domestic manufacturing industries to develop sustainably in an environment of fair competition, ensuring jobs and income for workers, bringing added value to the economy and enhancing the capacity of domestic entrepreneurs.
Appropriate handling of foreign trade defense investigations into Vietnam's export goods has also helped many industries and businesses avoid risks and negative impacts of trade defense measures applied by export markets. Thereby, helping businesses maintain their markets and increasingly participate more deeply in regional and global value chains.
The story of the sugar industry is a typical example. Before 2020, the Vietnamese sugar industry was facing the risk of bankruptcy because the price of imported sugar from Thailand was lower than the cost of domestic production. Sugarcane growing areas and sugar output decreased sharply, forcing many sugar factories to downsize or close.
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| Before 2020, Vietnam's sugarcane growing area and sugar production output decreased sharply, forcing many sugar factories to downsize or close due to dumping of sugar imported from Thailand. Photo: MH |
Under the above pressure, on August 20, 2020, the Vietnamese sugar industry submitted a request for anti-dumping and anti-subsidy measures. On September 21, 2020, the Ministry of Industry and Trade issued an investigation decision. On February 9, 2021, the Ministry of Industry and Trade issued a decision to temporarily impose anti-dumping and anti-subsidy taxes on sugar products imported from Thailand. On June 16, 2021, the Ministry of Industry and Trade issued a decision to officially apply anti-dumping and anti-subsidy measures.
After applying the safeguard measure, Vietnam's sugar output will increase by 161% in the 2023-2024 crop year compared to the 2020-2021 crop year. Consumers benefit as domestic sugar prices are always lower than in the region and the world.
Mr. Tran Vinh Chung - General Secretary of the Vietnam Sugarcane and Sugar Association (VSSA) said: “Sugar output in the 2023-2024 crop year has increased for 4 consecutive crops and increased by 161% compared to the 2020-2021 crop year. Specifically, in 2020-2021, we only produced 689,830 tons. In the 2023-2024 crop year, which was summarized in September, we produced 1,107,777 tons, an increase of 161%. In particular, the Central and Central Highlands regions have a competitive advantage in agriculture and processing industry, which has grown by up to 196% compared to the 2020-2021 crop year”.
Besides the sugar industry, trade defense also has a strong effect on the development of the steel industry.
In recent years, due to various reasons, the global steel industry has been facing a huge problem of overcapacity. According to the calculation of the Global Steel Overcapacity Forum, the current excess steel capacity is about 551 million tons.
Currently, the steel industry is facing the problem of import-export imbalance. This imbalance is about 2.9 million tons, we have a trade deficit more than export. This has created a lot of pressure on the Vietnamese steel industry.
Especially steel imported from China. In 2023, steel imported from China to Vietnam accounted for about 62% of Vietnam's total steel imports. The imbalance in supply and demand has caused many Chinese and foreign steel producers to find ways to deal with inventory by exporting to foreign markets, including Vietnam. They use the strategy of lowering prices to push inventory.
Vietnamese steel enterprises are facing the risk of losing the domestic market. Many steel enterprises are facing the risk of loss and bankruptcy.
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| Vietnamese steel enterprises face the risk of losing the domestic market due to the low price of imported steel from abroad. Photo: MH |
Faced with that situation, the steel industry has been advised by the Trade Defense Department to the Ministry of Industry and Trade to initiate investigations into 12 cases related to stainless steel, color-coated steel, steel billets, 91 steel, cold-rolled steel, and most recently, two initiated cases are galvanized steel and hot-rolled steel, and one case is being reviewed is stainless steel.
Mr. Dinh Quoc Thai, General Secretary of the Vietnam Steel Association (VSA), shared: “When applying these measures, domestic enterprises will regain their competitive advantage, specifically price competition. They will maintain market share, revenue, profit, offset costs as well as reinvest. In addition, the effects of the initial investigation decisions also brought positive signs to the market and improved the domestic market and expanded the domestic steel market share. Trade defense measures also contribute to creating jobs for workers. According to our calculations, hundreds of thousands of direct and indirect workers have been protected.”
According to statistics, in the first 9 months of 2024, Vietnam produced 21.9 million tons of steel, an increase of 8%, and exports increased by 6.8%, equivalent to about 6.4 million tons. Our steel products are currently being exported to over 30 markets around the world. Of which, ASEAN ranks first with about 26%, followed by the EU with 25%, the United States with 15%, and other countries.
In the coming time, the Trade Defense Department said it will continue to support businesses by perfecting trade defense tools, improving investigation and lawsuit handling capacity, and promoting international cooperation to enhance protection for domestic manufacturing industries.
Source: https://congthuong.vn/phong-ve-thuong-mai-tac-dong-tich-cuc-den-cac-nganh-san-xuat-352812.html
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