Increase barriers of trade remedy

Many cases of trade remedy lawsuits are targeting exported Vietnamese goods. Photo: N.H

Increase in cases

Statistics from the Ministry of Industry and Trade showed that by the end of the first quarter of 2021, 203 cases of trade remedies were initiated to investigate for Vietnamese exported goods by 21 countries/territories, with the number of cases in 2020 39, 2.5 times higher than the total number of cases in 2019. The number of cases of shirking a trade remedy targeting exported goods from Vietnam is increasing. The reason is some countries believe that exported goods from Vietnam use main materials imported from areas where trade remedies are being applied.

In the second quarter, the number of cases continued to increase. Recently, the Ministry of Trade of Turkey has initiated an anti-dumping investigation on polyester fully draw yarn originating or imported from Vietnam and South Korea. Previously, in mid-May, the US Department of Commerce (DOC) initiated an anti-dumping investigation on honey originating from Argentina, Brazil, India, Ukraine and Vietnam. The plaintiff proposed an anti-dumping tax rate of up to 207%.

Dinh Quyet Tam, Chairman of the Vietnam Beekeeping Association, said currently, Vietnamese honey had been exported to many different markets. However, a remarkable point was that more than 95% of Vietnamese honey was exported to the US market. In recent years, many import markets have increased technical barriers to stop Vietnam's honey from being exported, so the anti-dumping investigation of the US and the possibility of imposing tax make the export of honey tougher.

Also during this period, many cases of trade remedies investigation of other nations had gotten results. For example, the Canadian Border Services Agency (CBSA) has issued a Notification on Preliminary Investigation Conclusions in the case of Canada's anti-dumping and anti-subsidy investigation on upholstered seats from Vietnam and China. The CBSA decided to apply temporary anti-dumping and anti-subsidy tax on upholstered seats from May 5, 2021. The anti-subsidy tax rate for Vietnamese firms ranges from 0% to 11.73%. Most of the cooperative firms that answered the questionnaire are entitled to a tax rate of 0%. The anti-dumping tax rate is determined from 17.44% to 89.77%.

Using legal tools

Facing the situation of many Vietnamese products at high risk of being subject to trade remedies in exporting countries, authorities have recommended that firms use legal tools to ensure laws compliance of the host country.

Phan Mai Quynh, Deputy Head of Damage Investigation and Self-Defense Division, Trade Remedies Authority of Vietnam, Ministry of Industry and Trade recommended firms should actively participate in answering questions of the investigating party, fully prepare dossiers for the investigation as required, prepare time, lawyer for interpretation. The proactive cooperation and participation of firms will determine 90% of the results of the investigation.

Not only that, many firms and experts also shared firms should build an advanced and modern management system, stored dossiers and documents fully, study regulations on commerce, international trade remedies or consider for consulting a lawyer who is knowledgeable in international law when necessary. Dinh Van Chung, Deputy Director of Hoa Phat Dung Quat Steel Joint Stock Company, said proactively applying technology in production to improve product quality and being clear about origin is also a decisive factor in the development of the firm.

In particular, in terms of origin, firms are also looking for ways to prove the transparency of goods and products. The Vietnam Timber and Forest Products Association sent a document requesting the authorities in Cambodia and Cameroon to direct the provision of information about the evidence of legal imported wood to Vietnamese importers when bringing wood into Vietnam. According to the Vietnam Wood and Forest Products Association, member firms reflected that recently, some enterprises have imported parts of kitchen cabinets and bathroom cabinets that are high risk items from China to Vietnam. This fraud of origin causes many risks in the context that the US is investigating Vietnamese plywood products.

On the side of authorities, the Trade Remedies Authority (Ministry of Industry and Trade) has also continuously issued warnings and guided firms to obey and respond to foreign investigations. Along with that, many agencies have made plans to protect and support businesses. In particular, in terms of combating origin fraud, according to businesses, sectors and fields need to coordinate more closely and effectively with the Customs sector, because the Customs force plays a leading role in identifying risky items and companies at risk of fraud, counterfeiting of origin and illegal transshipment.

The General Department of Vietnam Customs said that over the past time, the Customs sector has developed a plan to combat origin fraud and illegal transshipment of export goods to the EU and India, especially focusing more on intellectual property infringement and counterfeit goods; or the processing of groups of goods which have a sudden increase in turnover. Besides that, the Post-Clearance Audit force continues to collect business data to serve special projects on key commodities and fields.