Pushing-up exports followed by risks of “escalating” Trade remedy lawsuits

VCN – The more rapidly export increase, the more risks it is forecasted to be faced. In deep concern, diversifying export markets, regularly updating early warning information ... are important solutions enabling businesses to effectively respond to trade remedies.
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Pushing-up exports followed by risks of “escalating” Trade remedy lawsuits
To minimize the risk of facing trade remedy lawsuits, enterprises need to diversify products and export markets to spread risks. Photo: N.Thanh

Anti-circumvention investigation increased

According to the latest information from the Trade Remedies Department (Ministry of Industry and Trade), by the end of the first quarter of 2022, Vietnam's exported goods have been the subject of 212 foreign trade remedy investigation cases.

Along with the process of extensive international economic integration, especially participating in FTAs, Vietnam's import-export turnover has increased sharply year by year. If in 2001, the import-export turnover of Vietnam only reached more than 30 billion USD, in 2011 it reached 200 billion USD; in 2021 will reach 668.5 billion USD. Particularly, exports increased from 15 billion USD in 2001 to more than 96 billion USD in 2011 and reached 336 billion USD in 2021.

With such results, Vietnam has become one of the 20 economies with the largest commercial scale in the world. Export has become an important engine for economic growth. However, in addition to such favors, Vietnam's export enterprises are increasingly likely to become the subject of investigation and application of trade remedies

Talking to a reporter from Customs Magazine, Ms. Pham Chau Giang, Deputy Director of the Department of Trade Protection said: "Along with the development of global trade, trade remedies are also being used more and more by countries. Even, many countries consider trade defense as a ‘safety valve’ in foreign trade policy to stabilize domestic production and protect workers' jobs. The markets with high frequency of investigation are the US, India, Turkey, EU, Australia and Canada.

Notably, out of 212 cases of foreign trade remedy investigation, cases of anti-circumvention investigation accounted for 25 cases and have increased in recent times, especially in the context of the US-China international trade conflict and when Vietnam joins many new generation FTAs ​​such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the Vietnam-EU FTA (EVFTA).

Leaders of Trade Protection Department analyzed that when exporting enterprises of a country are applied trade remedies, these enterprises often find a way to overcome it by moving production to another country. Meanwhile, with favorable policies for foreign investment, Vietnam is one of the options of those enterprises to shift production which leads to a dramatic increase in export volume of Vietnam. As a result, Vietnam are easily subject to monitoring, investigation, evasion trade remedies, origin fraud and can be applied the additional trade remedy measures or sanctions from imported ones.

Strengthen early warning system

For Vietnam's export industries, those who are subject to foreign investigation relevant to trade remedy evasion, origin fraud and illegal transshipment will lead to negative impacts such as affecting related industries and enterprises, genuine production/export, especially the reputation of Vietnam's export goods. In the long run, this also negatively impacts on the competitiveness of the whole Vietnamese economy, especially in the context that Vietnam is participating in a series of FTAs with high requirements on origin.

It is forecasted that in the coming time, the risks facing Vietnam's export goods will become larger and larger. Trade Protection Department recommends that businesses always follow information closely; carefully study the export market, regularly update early warning information from the Ministry of Industry and Trade.

“In addition, exporting enterprises also need to perfect the accounting book system according to international accounting standards, manage the book system to achieve even higher efficiency of appeal; coordinate with the Ministry of Industry and Trade in preventing acts of forgery, origin fraud and illegal transshipment, and strictly and thoroughly handle them to protect the common interests of the industry," said Ms. Giang.

From the perspective of the industry, Mr. Nghiem Xuan Da, Chairman of the Vietnam Steel Association shared: “The Vietnam Steel Association realizes that trade lawsuits against Vietnam's exported steel as well as many other goods do not only happen in major markets such as the US, Canada, Australia, and Europe but also occurs more and more in countries in the region such as Thailand, Indonesia and Malaysia. It shows a very clear trend that in the coming time, exported goods from Vietnam can be sued against trade remedies in any country regardless of large or small market, any field or type of goods.

“Businesses should take care of solutions to improve efficiency and reduce risks of facing trade lawsuits such as diversifying export products and markets to disperse risks and avoid export concentration in large volumes into one market. In addition, businesses need to develop value chains, enrich domestic raw materials, improve competitiveness for export products, and develop brands," said Nghiem Xuan Da.

Particularly, in the aspect of preventing acts of evasion, origin fraud, and illegal transshipment, the representative of the Ministry of Industry and Trade informed more, in addition to maintaining effective operations of the early warning system on trade remedies, the Ministry of Industry and Trade has been coordinating with functional agencies to cooperate on preventing evasion and fraud of origin, proposing a number of ideas such as the voluntary export registration mechanism to strengthen the coordinate and share information of Vietnam with other countries in handling this issue, improving the reputation and brand of Vietnam's export products.

By Thanh Nguyen/ Thu Phương

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