Vietnam - Vietnam warned that lawsuits may be raised against some export items

VietNamNet Bridge – The number of lawsuits for safeguard measures against Vietnamese export items are believed to increase in 2013. Wooden furniture and cashew nuts may be the next defendants in the lawsuits.

The number of lawsuits and investigations for safeguard measures (anti-dumping lawsuits, anti-subsidy and self-defense) tends to increase over the last two years. The trend would be seen in 2013 as well, according to Nguyen Hai from Mayer Brown JSM.

Vietnam faced the first lawsuit of this kind in 1994 with its rice exports to Columbia. Since that day, 49 anti-dumping lawsuits and three anti-subsidies have been raised against the imports from Vietnam. As such, nearly three anti-dumping lawsuits are raised against Vietnam’s products every year.

Especially, the number of anti-dumping lawsuits against Vietnam’s export items in 2011 and 2012 was by far higher than the average level, with six cases in 2011 and seven in 2012, according to the Trade Remedies Council, an arm of the Vietnam Chamber of Commerce and Industry (VCCI).

Hai, in an interview given to Thoi bao Kinh te Saigon, said that in 2013, paper and wooden furniture exports to the US, cashew nut exports to India and colored galvanized sheet metal to Thailand and Malaysia may be the subjects of the anti-dumping lawsuits.

It is undeniable that the increase of the number of trade remedy lawsuits raised by the producers and associations in India, Brazil and Thailand showed that Vietnamese products have become more popular in the world market, and that the demand for Vietnamese products has been increasing.

There’s a noteworthy thing--that while the number of such lawsuits tends to decrease in the markets which favor trade remedies like the EU and the US, the number of the lawsuits tends to increase in Brazil, Malaysia and Thailand.

Vietnam has also applied safeguard measures to fight against the increase of the imports. In 2009, Vietnam conducted the safeguard investigation against the floating glass. Most recently, in December 2012, the Ministry of Industry and Trade released the decision to apply safeguard measures against vegetable oil imports.

The goal of the lawsuits is to protect the domestic production against the competitiveness of imports. While the measures for trade restriction by setting up tariffs and quotas have been cut in accordance with WTO’s rules, trade remedies have become useful measures to reach that end.

Especially, safeguard measures are a legal effective instrument (which does not violate the international commitments) to protect domestic production. This explains why the number of lawsuits tends to increase.

Vietnam has been pursuing a policy on attracting foreign direct investment (FDI). Meanwhile, foreign invested enterprises mostly operate in the fields of processing and manufacturing – the sectors that create big volumes of exports. As such, the more Vietnam exports its products, the higher risk of anti-dumping lawsuits it will face.

To date, most of the Vietnamese trade partners still consider Vietnam a non-market economy NME. Under the Vietnam’s WTO commitments, NME would be removed by 2018.

The NME issue always puts Vietnam into disadvantageous position in the trade remedy lawsuits. The problem is that the trade partners do not recognize the production costs declared by Vietnam when calculating the values of the products.

In the latest news, Coalition of Gulf Shrimp Industries has raised an anti-subsidy lawsuit against the shrimp imports from seven countries, including Vietnam, even though Vietnam’s shrimp is now being imposed the anti-dumping tax.

TBKTSG

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