The timber industry needs more warning measures on trade remedies

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Mr. Ngo Sy Hoai.

The wood industry is facing more cases related to trade remedies of major export markets. The damage suffered by enterprises in the industry is constantly increasing. What is the cause of this situation, sir?

With the trend of trade liberalization, Vietnam has negotiated and signed many Free Trade Agreements (FTAs) in recent years. This movement caused countries to strengthen trade protection measures.

Besides, in recent years, Vietnam's wood processing and export industry has experienced breakthrough growth. Vietnam became the world's fifth largest wood exporter. Particularly, wooden furniture (such as tables, chairs, beds, cabinets) of Vietnam is the second highest value added group in the world, after China. Therefore, the wood industry has to face more trade remedies.

Regarding specific cases, in the past, the wood industry has faced a number of anti-dumping and anti-subsidy lawsuits from India and Turkey. These two markets have sued and imposed taxes on plywood and plywood products from Vietnam. After that, Korea also investigated dumping of Vietnamese plywood, imposing taxes at around 10%. In 2021, Canada investigated anti-dumping and anti-subsidy for upholstered seats originating from Vietnam with a rather heavy tax rate of about 10%.

In the last few years, Vietnam has faced more risks of trade remedies. In addition to the imposition of anti-dumping and anti-subsidy duties, the timber industry faces safeguard measures such as the US Government's 301 investigation into Vietnam's illegal logging and trade in timber. Recently, the United States initiated an investigation to avoid anti-dumping and anti-subsidy taxes on wooden cabinets imported from Vietnam and Malaysia.

What are the typical difficulties that wood industry enterprises face when dealing with trade remedies lawsuits?

Currently, trade remedies are increasing. Wood is one of ten industries that are often involved in trade remedies lawsuits. Facing the cases, enterprises have two main difficulties in terms of operational techniques and policies.

Firstly, due to technical difficulties, enterprises lack a team of experts who have legal knowledge, good at foreign languages and information technology to be able to monitor and respond flexibly.

In addition, corporate governance is weak, especially for small and medium-sized enterprises with slow digital transformation, not yet applying advanced accounting software with sufficient reliability and high flexibility. In addition, there is still a lack of linkage between Vietnamese enterprises and between Vietnamese enterprises and FDI enterprises.

Secondly, in terms of policy, there is a situation of investment following the movement, which requires better policies and strategic vision. Vietnam's wood industry must enhance efficiency and branding, move to a higher level, not only produce low-priced products, but also diversify products and markets.

What recommendations and suggestions does the association have to help wood enterprises respond more effectively to trade remedies lawsuits in the near future, sir?

The Association wishes to cooperate with the Trade Remedies Administration (Ministry of Industry and Trade), the Center for WTO and Integration (Vietnam Federation of Industry and Trade) to organize short-term training courses to increase the awareness of enterprises about risks when applying trade remedies.

In addition, training and coaching a number of skills for self-defense help businesses respond promptly when an incident occurs. Recently, enterprises are quite confused.

Meanwhile, the time limit of a case from filing a lawsuit to the time of investigation requiring criticism and feedback is often very short, and the extension time is harsh. Businesses are listed as uncooperative or unresponsive, which is very dangerous.

Another important point is that at the national level, it is also necessary to strengthen warning and defense measures. For example, when the product of a neighboring country is investigated for anti-dumping duty, the delay is only two years. For example, for wood and kitchen cabinets, every two years after China is subject to anti-dumping or anti-subsidy tax, the US investigates similar products exported from Vietnam. If Vietnam gives a warning and is clearly aware, it will take timely and appropriate response measures.

Enterprises wish to be able to provide earlier and more complete information by regarding to Vietnamese abroad trade representative agencies, with many warnings and recommendations to associations and businesses.

Thank you very much!