Vietnamese goods subject to trade remedy investigations are increasing

Overview of the talk.

Every 5 years the number of cases doubles

Vietnam is a country with a strong export scale in recent years, leading to a rapid increase in the number of cases of trade remedy probes against Vietnamese exports. Specifically, between 2005-2010, there were 25 cases related to trade remedies, the period 2011-2015 increased to 52 cases and the period 2016-2021 was 109 cases. By October 2022, there were a total of 224 trade remedy cases against Vietnamese exports.

At the seminar "Risks and solutions to limit investigation and application of trade remedies for Vietnamese exports", organized by the Industry and Trade Magazine on December 21, the director of the Trade Remedies Department under the Ministry of Industry and Trade stated that the number of Vietnamese export enterprises subject to investigation and trade remedy measures is increasing. Statistics show that every 5 years the number of cases doubles, from 25 cases to 52 cases to 109 cases.

According to Chu Thang Trung, besides the increasing number of cases, there are also new features in the process of Vietnamese export enterprises encountering foreign trade remedy investigation cases.

Firstly, in addition to traditional measures such as anti-dumping, anti-subsidy, and self-defense, there are now also cases where foreign countries, especially the United States, are one of the export markets.

Vietnam's main approach is to apply measures to evade trade remedies. This is also a new way of investigation by foreign investigative agencies. Currently, out of 16 cases being handled in 11 from the beginning of 2022, there are also some cases related to the investigation of evasion of trade remedies.

The second nature of the current trends in trade remedy investigations, trade remedies are not limited to a few markets, but may be extended to other markets.

The third feature is that the investigation standards of foreign investigation agencies for enterprises tend to be stricter and more stringent, requiring great efforts of enterprises to be able to meet these requirements of a foreign investigative agency.

Increase anti-circumvention investigation

Sharing the same analysis on this issue, Nguyen Thi Phuong Thao, a lawyer, IDVN Law Office said that in recent times, Vietnam has increased the signing of free trade agreements. The first advantage of free trade agreements is that they will remove or significantly reduce tariff barriers in import markets and create an impetus for Vietnamese exports to penetrate deeper and wider into these markets. That will also create pressure on goods produced in those importing countries.

The second feature is that, when Vietnam becomes a partner of more countries in free trade agreements, it means that Vietnam also becomes a more attractive destination in terms of investment, which means that the foreign enterprises in many countries, including China, which is one of the leading producing and exporting countries in the world, have also moved to Vietnam.

These reasons have also greatly increased the number of cases targeting Vietnam in the recent period, especially in the past three years. In 2022, there is a significant increase in trade remedy cases for a new type of investigation which is anti-circumvention. The consequences of anti-circumvention investigations are very specific. If the importing country determines that there is circumvention, the importing country has the right to apply a trade remedy measure to the same extent as it is applied to the country of origin.

For example, in the most recent case, Vietnam is being investigated by the US for plywood products, for example, the tax rate applied to products from China is up to more than 200%, and the period of anti-circumvention investigation with Vietnamese goods, then Vietnamese goods will be at risk of being applied with a tax rate of 200%.

“It is very different from anti-dumping because anti-dumping will calculate a separate margin for Vietnamese goods, in the period of 2022, US anti-circumvention lawsuits will be initiated. There is a relatively large number of people entering Vietnam and there is an increase," said Nguyen Thi Phuong Thao.

The United States is a pioneer in the investigation and application of trade remedies in the world. As the United States transitions to anti-circumvention or anti-fraud investigations, it may also set a precedent for other countries to consider and choose such a path.

Therefore, Vietnamese businesses will have to be very careful. In addition to concerns about selling prices and production costs, it is also important to pay attention to developments related to cases or measures applied to Vietnamese competitors in the international market.