Vietnamese firms must be ready to face more trade remedies at home and abroad as the Southeast Asian country is integrating further into the world’s economy, with numerous trade deals with foreign trade partners already signed or about to be clinched, foreign and local experts said at a recent workshop in Ho Chi Minh City.
While trade liberalization has opened up world trade to freer competition, more measures blocking market access on the grounds of unfair pricing by exporters have appeared recently, the experts said, further explaining these are called trade remedy actions, part of a series of trade barriers erected to protect a specific industry of a country from dying out due to cheaper imported goods.
Those trade barriers will be a challenge for Vietnamese firms when they export their products to many markets worldwide, especially the U.S. and EU, they said.
Vietnamese companies have to stand firmly to defend themselves at home as well because of the rising inflow of imported goods following trade deals their country signed or will sign with its partners, delegates said at the “Vietnam in a Borderless World of Trade: Opportunities and Challenges" workshop on Friday.
Getting used to it
One morning, as usual, you walk into your office and start your computer to check your email, only to find a message: your company is officially facing an anti-dumping probe from a specific export market. You will be shocked, wondering why this is happening to your firm, but by that time all formalities for the lawsuit have been completed, and you have no choice but to find ways to cope with it.
This is a story narrated by American expert Matthew McConkey, a partner at the Washington-based law firm Mayer Brown, at the event.
In a borderless world of trade, trade remedies will become more popular and businesses will find that they may unexpectedly get stuck in such circumstances, which seem to appear from nowhere, McConkey said.
As a result, in the course of expanding the market overseas, Vietnamese companies will have to master the international law on trade, especially trade remedies, and be willing to pursue such lawsuits to protect their rights.
Vietnam's economy is growing, accompanied by rising exports to discerning foreign markets, which will result in market expansion and deep penetration into the global market, said Wong Chian Voen, director of Mayer Brown Consulting Pte. Ltd. (Singapore).
In 2013, Vietnamese exports to the U.S. topped $23.9 billion, and the number rose 24 percent to $30.6 billion in 2014, bringing in a trade surplus of $24.9 billion for Vietnam, she said.
By the end of 2014, Vietnam had overtaken Thailand and Malaysia to become the top ASEAN exporter to the U.S. market. In addition, the export value of Vietnam to ASEAN countries also increased sharply.
The flip side
Given rising exports to the U.S. and other key markets, Vietnamese firms will face more challenges in the form of anti-dumping and anti-subsidy probes there, McConkey warned.
So to avoid the damage and risks in the export process, the most effective way for Vietnam's enterprises is to stay updated on legal knowledge in the export markets, he said.
At the same time, they need to understand the nature and process of those lawsuits, mainly against dumping, to take precautions to minimize risks and losses, he added.
According to Pham Chau Giang, an official from the Vietnam Competition Authority under the Ministry of Industry and Trade, Vietnamese exporters must boldly participate in those lawsuits when sued, for if anti-dumping tariffs are imposed on them, it will take five years for a review for the taxes to be lifted, or possibly last for another five-year period.
To prepare for a dumping lawsuit, Vietnamese enterprises and associations should monitor the amount of exports in a coherent way, keep the complete document on the negotiation process, as well as build and maintain good relationships with importers.
Vietnamese businesses and industries need to work closely together to draw out a plan to defend their own interests, Giang said.
Previously, Vietnam faced three or four anti-dumping lawsuits annually, but the number has doubled in three recent years, and rose to 10 cases last year, Giang added.
According to Matthew McConkey, a dumping lawsuit is often initiated by a certain industry, not by the U.S. government.
Accordingly, the plaintiff will apply at the U.S. Department of Commerce (DOC) and the International Trade Commission (ITC) to be evaluated, reviewed, and processed.
After 20 days for DOC and 45 days for ITC from the date of filing the complaint, the two agencies must complete the investigation and confirm whether there is proof of trade injuries caused by imported goods to their domestic industry or not.
Specifically, the two agencies will simultaneously receive petitions from the affected industry of the U.S.
While the ITC will consider the import volumes and prices to assess whether the domestic producers are affected or not, the DOC will conclude that the exporters have dumped by which rates so that U.S. customs authorities will slap corresponding anti-dumping tariffs on them, McConkey said.
If the plaintiff and the defendant do not agree with the decision of the DOC and/or the ITC, they will bring the case to the U.S. Court of International Trade in New York.