Being proactive in international integration, Vietnam has had free trade relations with 55 trading partners in the world through the signing of 13 free trade agreements (FTAs). According to the Ministry of Industry and Trade, as a member of the World Trade Organization (WTO), besides following trade liberalization, Vietnam is well aware of the need for trade defense instruments (anti-dumping, anti-subsidy, or safeguard measures) for domestic manufacturing in both domestic and export markets.
For domestic goods, with a tariff reduction of almost 0% under 13 FTAs, Vietnam has become one of the most open economies in the world. However, along with the advantages brought by FTAs to increase production efficiency, Vietnam also faces many obstacles on its way to sustainable development.
Firstly, the open to major trading partners may cause a shock to some domestic industries and prevent them from adapting to complicated and even unhealthy competition (such as dumping, subsidy, etc.) with goods imported from abroad.
Secondly, Vietnam's exports are also subject to high frequency of trade remedies by other countries. These lawsuits take place not only to goods that are exported in mass, but also to those with low export turnovers. This can have a direct negative impact on manufacturing and export industries, and indirectly impose economic and social burdens.
The Ministry of Industry and Trade said that the law on trade defense of Vietnam was formulated 15 years ago, before Vietnam officially became a member of the WTO. However, only in the last 5 years has Vietnam been truly proactive in using these legal instruments allowed by the WTO and FTAs.
Specifically, since 2013, the Ministry of Industry and Trade has initiated investigations into 16 trade defense cases, including 10 anti-dumping cases and 6 safeguard cases. On the basis of conducting an objective, transparent investigation, complying with legal regulations and in accordance with international commitments, the Ministry of Industry and Trade has issued a decision to apply 13 trade remedies measures for imported goods. Commodities subject to the measures are steel, fertilizer, plastic, textile and foodstuffs. These are mostly commodities that play an important role, and are the backbone in the economy of each country.
Reality shows that trade defense measures have brought positive effects to domestic manufacturing industries, helping the industry to overcome the damage caused by the increase of imports, maintaining production and gradually developing the economy.
Trade remedies that have been applied have protected the benefits of about 120,000 workers in the aforementioned fields, encouraged the development of domestic production and supported the balance of international payments. According to statistics, manufacturing industries that are protected by trade remedies are estimated to contribute about 6.3% to the country's GDP. With the increase in import tax, the applied trade defense measures have also contributed to increasing the revenue of the state budget with the estimated value of trillions of dongs.
By monitoring the impact of trade remedies, the Ministry of Industry and Trade found that mass import growth in these products has decreased significantly. For example, previously, galvanized sheet products were heavily imported, after anti-dumping measures were applied, the amount of imports decreased significantly. Thanks to trade defense instruments, many businesses in several economic sectors have significantly improved their production and business performance, escaped losses and gradually stabilized production such as DAP Fertilizer Company Hai Phong, Viet Trung Steel Company, Viet Y Steel Company, Pomina Steel Company, etc.
Trade remedies also contribute to stabilizing price of input materials for a number of domestic manufacturing industries. Specifically, as for DAP fertilizer, when there is domestic production to create a counterbalance, the price of this item has been lower than before when raw materials were entirely imported. Specifically, before 2009 when there was no DAP production industry in the country, the price of DAP fertilizer (mainly imported from China) was really high (VND 18,000 / kg in 2008), leading high cost of rice production. However, after the two DAP manufacturing plants went into operation, the DAP price dropped continuously to only VND 8,000 / kg by the end of 2017.
Therefore, the application of trade defense instruments to protect manufacturing industries related to agriculture, construction, etc. is both to protect domestic production and employment while reducing the level of dependence on imported goods. Many WTO members, including major economies such as the United States, the EU, Canada, and Australia, have been promoting the application of trade remedies to ensure that domestic production is maintained.
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