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Removing trade barriers
2010 is expected to bode well for Vietnam’s exports as the world economy is showing signs of recovery. However, businesses will have to face trade barriers, especially anti-dumping suits, set up by importing countries.
Vietnam’s exports to major markets have not bounced back yet as the world economy is just beginning to recover. Many people think when the global crisis brought Vietnam’s exports to a standstill, this would reduce the risks of anti-dumping suits.
In fact, the risks remain imminent, as many countries are applying protectionist measures, including anti-dumping, to maintain domestic production and increase the competitiveness of their products against imports.
As anti-dumping suits against Vietnamese fish, shrimp and plastic bags, lodged by the US and the European Union, have not yet been settled, experts now warn the country of possible new suits against its exports.
In addition, importers have tended to sue multiple exporters of a similar product rather than just one as before, putting Vietnam at a disadvantage. This means it will be confronted with suits against products that are not its key exports.
Although the Agreement on Anti-Dumping Practices (ADP) is observed by World Trade Organisation (WTO) members, it still causes several difficulties for Vietnam, including calculations of the minimum dumping margins or taxes.
According to the WTO, dumping is, in general, a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.
Lawyer Tran Huu Huynh, Head of the Legal Affairs Department under the Vietnam Chamber of Commerce and Industry, says under the regulations, importing countries will file suits without caring about why the imports are offered at lower prices than their products.
Low product prices can be the result of government subsidies, the application of advanced technology, managerial improvements or cost-saving programmes. However, these factors are not included in the WTO agreement, says Mr Huynh.
Over the years, Vietnamese businesses have taken great pains to cope with anti-dumping suits, but their capabilities remain limited. In addition to solutions to increase their competitiveness, the businesses should be well prepared for possible suits in the future, says Huynh.
Peter John Koeing, senior lawyer at the US law firm Squire Sanders, suggests that businesses clearly document financial and accounting activities to show to auditors if required. In addition, they should build more factories in different markets and localities to protect themselves if local authorities want to launch an investigation.
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