Vietnamese honey cannot compete in the US despite the deep reduction in taxes

The beekeeping industry needs to continuously fight for the US side to make a more reasonable adjustment.

Currently, more than 90% of Vietnamese honey is exported to the US market

Progress but not satisfactory

Recently, the US Department of Commerce (DOC) issued the final conclusion on the tax rate in the case of an anti-dumping investigation on honey imported from Argentina, Brazil, India, and Vietnam. Accordingly, the ADD for Vietnamese enterprises has decreased sharply, from 410.93% - 413.99% in the preliminary conclusion to 58.74% - 61.27%.

In May 2021, the DOC officially announced the initiation of an anti-dumping investigation on honey products originating from a number of countries, including Vietnam.

At the end of 2021, the DOC announced the preliminary ADD on Vietnamese honey exported to this market at 412.49%. This tax was double the rate that the American Honey Manufacturers Association originally proposed, which had been 207%.

In the US, there are two agencies involved in an anti-dumping investigation, namely the DOC, which determines the ADD rate, and the US International Trade Commission (ITC), which determines the damage to the domestic industry. Anti-dumping measures will officially take effect on the basis of the final conclusion on dumping and injury of the domestic industry.

Currently, the ITC is investigating the damage and is expected to issue the final conclusion on May 23, 2022. According to ITC statistics, Vietnam's honey output to the US in 2021 reached 56,133 tons with a turnover of about US$82.1 million.

Assessing this figure, Dinh Quyet Tam, Chairman of the Vietnam Beekeeping Association, said that compared with the preliminary conclusion, the dumping margin for Vietnamese enterprises in the final conclusion decreased by nearly seven times. Commercially, however, it doesn't make much sense. Because, while the ADD rate that the US applies to India is only 5.85%, the level applied to Vietnam is 58.74% - 61.27%. These are too high.

“The results are progressive but still not satisfactory. The basis to calculate the figure 410.93% - 413.99% at the beginning and 58.74% - 61.27% now is not reasonable. With this tax rate, Vietnamese honey cannot compete with Indian honey in the US market," said Tam.

Le Trieu Dung, Director of the Trade Remedies Department (Ministry of Industry and Trade), said that during the investigation, the Ministry of Industry and Trade coordinated with the ministries and branches to express their views to the US side many times, asking the US for an objective and fair assessment in compliance with World Trade Organization regulations. The Ministry of Industry and Trade also said that this result did not reflect the reality of Vietnam's honey production and export situation.

Keep fighting

According to Tam, the socio-economic and production conditions of Vietnam and India are similar. Honey products from Vietnam and India are also similar. The number of honey exports of Vietnam and India to the US market is the same (about 50,000 tons), market segments, and prices are not much different. India and Vietnam are in the same target group of the anti-dumping investigation. The US has not yet recognized Vietnam as a market economy and the DOC uses India's price as a substitute for calculation.

“The Vietnam Beekeeping Association and the anti-dumping investigators have both provided all necessary data to the DOC. However, the ADD rate of Vietnam is 10 times higher than that of India. What is the basis for giving such different results? While the per capita income of India, as well as the working days of Indian beekeepers, are higher than that of Vietnam," said Tam.

Mentioning the number of US tax imposition that is not really fair to Vietnamese beekeepers, Tam emphasized the need to continue fighting for the DOC side to have more reasonable calculations.

Even US importers are not satisfied with this number. The current imposition of tariffs will cause damage not only to Vietnam's honey producers and industry, but also to US producers and importers. Over the past 30 years, US importers have been traditional partners, they have used Vietnamese ingredients, market segments and consumers have been familiar with this product. If it is fair, the tax rate applied to Vietnam must be equal to or lower than the ADD rate that the US imposed on India.

Dung affirmed: “In the future, the Ministry of Industry and Trade will continuously coordinate with relevant ministries and branches, the Vietnam Beekeeping Association and Vietnamese honey exporters to discuss with US agencies in the next stages (damage assessment and ADD review) to support the Vietnamese honey industry to be treated fairly in this case in accordance with the regulations of the World Trade Organization, ensuring the legitimate interests of Vietnamese honey exporters.”

In addition to negotiating and recommending to the DOC to reconsider a more reasonable ADD rate, the Vietnam Beekeeping Association and businesses have tried to change the production process, and make suitable products for other markets such as EU and ASEAN. “We cannot change the import market right away, but early signs show promise. State management agencies, associations, industries, businesses, and even manufacturers have initially made changes to suit the new market," said Tam.