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Businesses need to grasp trade remedy measures

In Uncategorized on August 3, 2010 at 3:25 pm

Businesses need to grasp trade remedy measures

QĐND – Tuesday, August 03, 2010, 21:12 (GMT+7)

To protect their legitimate interests, businesses are entitled to ask for investigation and trade remedy measures (TRms) to combat unhealthy competition in imports and request the WTO to deal with lawsuits that can seriously damage them.

Businesses remain “vague”

“Vietnam has not yet used trade remedy measures (TRms) to protect its domestic industries although it has the necessary tools at its disposal,” said Vu Ba Phu, Deputy Head of the Competition Management Department.

According to the Vietnam Chamber of Commerce and Industry (VCCI), only 66 percent of Vietnamese businesses understand the basic content of all WTO agreements and less than 35 percent grasp Vietnam’s WTO commitments that are related to their sectors or business areas.

“This is the weak point of many Vietnamese associations and businesses when applying TRms. They only focus on exports and miss out on the domestic market,” said Tran Huu Huynh, Head of the VCCI’s Legal Department.

Even worse, through a recent seminar on using TRms to protect businesses from a glut of imported goods, did a representative from the Vietnam Construction Association learn about dumping and subsidies. But, in his words, how to apply TRms is another matter.
Apart from coping with anti-dumping and anti-subsidy and TRms lawsuits issued by other countries, Vietnamese businesses have to face with tough competitions from imported goods in the domestic market.

Mr Phu said that TRms are used legally by WTO member countries. Consequently, the application of these measures by member countries must be subject to WTO agreements on anti-dumping, anti- subsidy measures and TRms.

Deputy Minister of Trade Le Danh Vinh underlined the need to provide a comprehensive account of TRms for Vietnamese businesses.

To protect their legitimate interests and ensure the survival and development of businesses in the domestic market when facing unhealthy competition from imported goods, Vietnamese businesses are entitled to ask State management agencies to investigate and apply TRms against imported goods, said Mr Vinh.

Applying TRms on home turf

According to the Ministry of Industry and Trade, over the past seventh months, Vietnam’s import surplus has hit US$7.44 billion, accounting for 19.45 percent of its export turnover. This figure underlines the competitive pressure of imported products and services on domestic production and services.

The Competition Management Department said while attempting to penetrate the Vietnamese market, foreign businesses take account of unhealthy competitive practices including dumping, subsidies or taking advantage of opportunities to flood the Vietnamese market with imported goods. This can cause losses for Vietnamese businesses on their home turf. Therefore, businesses and associations need to be more active when applying legal measures under WTO regulations to raise their competitive capacity in the domestic market.

In the middle of last year, the Viglacera Float Glass Company (VIFG) and the Vietnam Float Glass Company (VFG) officially asked the Ministry of Industry and Trade to investigate the application of TRms against float glass products imported to Vietnam. The investigation was of great importance to the country’s international trade activities as this was the first time domestic businesses had requested State management agencies to protect their interests under the WTO’s rules. This was also the first time, since joining the world’s largest trade organisation that Vietnam had officially conducted an investigation and considered applying TRms in its capacity as an importing country.

Mr Phu said that the investigation helped to reduce the imports of this product which enabled domestic float glass producers to increase their sales volume and restore production.

Being more active in the global market

Since 1994, Vietnam has faced 42 trade disputes, including 35 anti-dumping lawsuits, 10 of which have been imposed by the EU, 6 by India and 5 by the US.

Not only leather capped shoes and bicycles but also plastic bags were faced with anti-dumping taxes in 2009. The lawsuit is likely to be a precedent for other anti-subsidy lawsuits against Vietnam’s major exports to the US and other countries.

Some foreign experts warned that in 2010 wooden products, garments, and steel are likely to face anti-dumping lawsuits in the US and EU. Other products, such as chemicals, mechanic products and plastics may also be investigated.

According to the VCCI’s survey, 66 percent of businesses do not grasp the basic content of WTO agreements and more than half of businesses are not aware of Vietnam’s commitments relating to their products. However, if they learn about the legislation they can lodge a petition with the WTO to deal with disputes. This world body will then consider whether Vietnamese companies are charged with dumping prices or not and give a final decision.

Both domestic and foreign lawyers said that international trade disputes are inevitable so businesses associations should prepare and come up with long-term measures and use international trade law to deal with them.

Experts said that when anti-dumping taxes are invalid, they might be extended, so businesses will be faced with such taxes forever.

For example, Vietnamese footwear products will continue to face an anti-dumping tax of 10 percent in 15 months since January 2010 and probably the EU Footwear Federation will have to ask the EC to extend the deadline.

Dealing with trade disputes under the WTO framework is common and businesses should not consider it a complicated process.

The WTO has an agency to deal with trade disputes. Having become its members for three years, Vietnam has the responsibility and the right to ask the WTO to consider any unjust lawsuit against Vietnamese businesses.

In the first quarter of this year, Vietnam already lodged with the WTO strong protest against the US imposition of anti-dumping taxes on its frozen shrimp. The economic community is optimistic about the possibility of winning the case. After five years of paying these taxes, Vietnam has suffered a lot of losses. If the tax continues to be imposed for the next five years, the US will not be a lucrative market for Vietnamese frozen shrimp.

Source: VOV

Source: QDND