Exports face many risks due to protectionist trends

In half a month, export goods are involved in 4 lawsuits

Low global economic growth and weak consumer demand caused Vietnam's exports in the first 7 months of 2023 to decrease by more than 22 billion USD, equivalent to a decrease of 10.3% over the same period.

Stainless steel is a product that regularly faces trade defense lawsuits. Photo: Duc Thanh

Not only facing the decline in global trade, Vietnam's export industries are also doubly affected when many markets increase protectionism to protect domestic production. In just the first 15 days of August 2023, the US, EU, and Indonesia initiated 4 lawsuits against imported goods from Vietnam.

In particular, the US initiated an investigation into steel cart wheels imported from Vietnam, the EU initiated two anti-dumping and anti-subsidy tax evasion investigations into cold-rolled stainless steel from Vietnam, and Indonesia investigated anti-dumping on Polypropylene Copolymer products.

According to Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan, when production capacity is large and exports increase, businesses need to proactively monitor the Ministry of Industry and Trade's warnings about products at high risk of being sued, thereby having scenarios to respond to trade defense.

In case of anti-dumping lawsuits against goods, enterprises need to actively cooperate with the investigation agency, provide complete, consistent and timely information, proactively store information, ensure origin, and fully update production data.

Thus, since the beginning of the year, countries have initiated 8 trade defense lawsuits against Vietnam's export goods, including 4 cases initiated by the US.

The trade defense investigations against Vietnam so far are mainly anti-dumping and anti-tax evasion cases from markets that regularly conduct defense investigations such as the US, India, Australia, etc. The investigated products are quite diverse, of which steel and fiber are the products that are regularly investigated following the general trend in the world.

The Department of Trade Defense (Ministry of Industry and Trade) explained that Vietnam's economy is highly open, participating in many free trade agreements (FTAs), tariff barriers are gradually being removed, many export products are growing strongly. Since then, Vietnamese exports have become more competitive in many foreign markets, putting pressure on domestic enterprises in import markets, forcing their governments to use defense tools permitted by the World Trade Organization (WTO) to protect the interests of domestic manufacturing industries.

In addition, participating in regional supply chains makes Vietnam a country that is often sued together with other countries such as China and India, which are countries with large export turnover, are often investigated for trade defense or suspected of illegal transshipment to avoid trade defense taxes.

Adapt more quickly

The annual report on trade defense published by the Ministry of Industry and Trade shows that from July 2020 to June 2022, the US is the country that initiated the most anti-dumping investigations with 101 cases. Next is India with 58 cases, China with 32 cases, Canada with 25 cases...

From January 1, 1995 to December 31, 2022, China was the country with the most anti-dumping investigations initiated, with 1,565 cases.

During the same period, Vietnam was initiated anti-dumping investigations by WTO members with 120 cases, ranking 15th among the economies with the most anti-dumping measures applied in the world.

Mr. Chu Thang Trung, Deputy Director of the Department of Trade Defense, said that with these cases, the Ministry of Industry and Trade has proactively coordinated with ministries, branches, localities, associations, and businesses to handle them effectively.

“The Ministry of Industry and Trade always closely follows the entire process of the case to monitor compliance with international commitments of foreign investigation agencies, as well as support businesses in handling the case, minimizing the negative impact of the case on export activities,” said Mr. Trung.

In recent times, Vietnam has successfully handled many foreign trade defense investigations by proving that enterprises do not dump, the Government does not subsidize enterprises, and does not intervene in the market to create unfair advantages for exporting enterprises. It proves that exporting enterprises do not have acts of evading trade defense measures applied to third countries.

Thanks to that, exporting enterprises are not subject to taxes, have their taxes lifted or are only subject to low taxes, contributing to maintaining and expanding export markets.

Most recently, the US Department of Commerce (DOC) concluded that some steel pipe products imported from Vietnam did not evade trade defense taxes when exported to the US.

In this conclusion, DOC said that products imported from Vietnam do not evade anti-dumping and countervailing duties that the US is applying to similar products from Taiwan (China) because they do not use hot-rolled steel (HRS) originating from Taiwan.

In the investigation into tax evasion on solar panels, about 98% of solar panel exports from Vietnam are not subject to tax, or can use the self-certification mechanism to be exempted from tax. The US also concluded that Vietnam's stainless steel wire does not evade tax.

To reduce the number of cases of Vietnamese goods being investigated for evading defense measures and prevent Vietnam from being used as a transit point to export goods to third countries, manufacturing industries need to protect the reputation of their export goods, while avoiding businesses making insubstantial investments, only performing simple processing stages that do not bring much added value.

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