Trade defense measures (anti-dumping, anti-subsidy and safeguard) are allowed by WTO and FTA agreements to be used to counter unfair competitions activities in international trade (anti-dumping or subsidy of imported goods) as well as to prevent the sudden increase of imported goods, leading to major losses for domestic manufacturing industries, according to experts.
This is an important and legal tool to protect domestic manufacturing industries and enterprises, especially when tax barriers have been lifted according to international agreements.
In the context of Vietnam participating in many FTAs such as ASEAN, ASEAN+, and most recently EVFTA, trade defense measures have been playing an increasingly important role in the economy as well as in domestic manufacturing industries and enterprises, contributing to the implementation of increasing the effectiveness of the international economic integration progress.
For FTA agreements with extremely high tax reduction similar to EVFTA, the competition pressure with Vietnamese enterprises or even EU ones in some industries will be even higher due to the consumption demands of trade defense tools. According to the Ministry of Industry and Trade, when the EVFTA Free Trade Agreement takes effect, the Vietnamese commerce defense will encounter several difficulties.
The commodity commerce between the two countries will increase as the majority of import tax flows will be reduced to 0%, therefore the export turnover between Vietnam and EU will likely increase significantly, resulting in the possibility of increasing the number of commerce defense cases between the two parties (to protect the domestic manufacturing industries against the increase of imported commodity).
EVFTA agreement’s implementation requires enterprises to research and thoroughly understand the Commitments in the Agreement, including those regarding trade defense to prepared to take advantage of the benefits brought about by the Agreement, while simultaneously protecting their legitimate interests.
In addition, increasing the number of trade defense cases may result in a certain number of issues for the trade defense investigating agency of Vietnam due to limitations in resources. Moreover, due to the benefits provided by the EVFTA Agreement being numerous, there might be some enterprises trying to fake the commodity origins or avoid the trade defense measures that the EU is applying to other nations to enjoy illegal interests.
In that context, trade defense activities should focus on warning and preventing these illegal actions. According to the Ministry of Industry and Trade, currently, the Ministry has implemented several solutions to further support exporting enterprises in dealing with foreign trade defense cases as well as coming up with warnings for Vietnamese enterprises.
The protectionism, as well as trade conflict, is developing complicatedly, especially in the relationship between major economies, multifacetedly affecting the global, regional, and Vietnamese economies.
By the end of March 2020, there have been 160 cases of trade defense of 19 countries and territories initiating the investigation of Vietnam's export commodity. In which, countries that initiate the most investigation are the US, Turkey, India, and the EU, etc.
Strengthening research, forecast, and warnings on trade remedies applied to Vietnam's exports, including anti-evasive investigations. Every week there will be an early warning newsletter for public posting, and it will be sent to Business Associations for dissemination to businesses.
Submitting to the Government for the promulgation of the Project on Building and Effectively Operating the Trade Defense Early Warning System to support the Vietnamese business community in proactively using and responding effectively to trade defense measures to protect their benefits.
Promoting the dissemination, guidance, and advice on how businesses deal with foreign-initiated lawsuits;
Actively working, coordinating, and struggling with foreign investigating agencies from the initial investigation stage to protect the legitimate interests of Vietnamese businesses, minimizing the adverse impact of the countermeasures.
The aforementioned efforts on trade defense have contributed to protecting the legitimate interests of the manufacturing and export industries and contributing to the implementation of the export growth goal set by the National Assembly.
>> EVFTA Agreement: Issues that Vietnamese enterprises should pay attention to