VN products to face trade investigations with more FTAs

Workers at Woodland JSC. a wooden furniture maker in the northern province of Tuyên Quang. VNA/VNS Photo

HÀ NỘI — Vietnamese products are to face numerous trade defence measures in the future despite the large number of free trade agreements (FTAs) the country has signed, according to trade experts and policymakers.

Lê Triệu Dũng, head of the trade defence department under the Ministry of Industry and Trade, said Việt Nam has signed on a total of 15 FTAs so far. While they have opened new markets and improved Vietnamese exporters’ competitiveness, the FTAs were designed with built-in trade defence mechanisms to counter illegal practices such as dumping, subsidy and origin fraud.

For example, countries are allowed to initiate and employ trade defence mechanisms on products exported from one country to another, where they were minimally processed or altered during a brief stop, before being exported again to their intended markets. 

“Greater integration into the global economy and rising trade protectionism means Việt Nam will likely see more trade investigations on its products,” he said. 

Dũng said a higher volume of Vietnamese exports which will eventually displace locally sourced competition will create pressure on local governments to employ trade defence mechanisms to protect their own industries.

By the end of the first quarter of 2022, there were 212 investigations opened against Vietnamese exports. Of which, 25 were on attempts to dodge trade defence by exporters.

The Southeast Asian country reported 15 per cent higher exports to China in 2021, 14 per cent higher to the EU, 15.8 per cent higher to South Korea, 21 per cent higher to India and 42.5 per cent higher to New Zealand, despite the impacts of the pandemic. 

Meanwhile, Việt Nam imported over US$332 worth of products, a 26.5 per cent increase from the previous year. As import tax eventually will be removed, Vietnamese firms should expect fiercer competition on their home turf. 

In order to better cope with future trade disputes and investigations, MoIT has advised Vietnamese firms to conduct comprehensive studies on the trade regulations of their target markets. 

Nguyễn Sỹ Hòe, deputy director-general of Phú Tài JSC., a cabinet manufacturer, said recent US anti-dumping and anti-subsidy investigations against Vietnamese products have hurt the entire industry, even those who were not named.

He said firms should carefully review and make sure all documents were up to standard while building a defence in the event they may be subject to investigation down the line. 

On the other hand, Việt Nam has opened investigations against 25 products, of which 16 were under suspicion of dumping, one of subsidy and eight for signs of trade defence avoidance, according to Dũng. VNS