UK to recognise Vietnam as market economy in trade defence investigation

Under the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the UK will recognise Vietnamese manufacturing industries operating under market economy conditions.

On that basis, the UK will not apply unfavorable regulations to goods imported from Vietnam in the event of conducting investigations into trade defense cases.

Market economy is a concept used by some countries when conducting trade defense investigations on imported goods from other countries.

The UK will recognise Vietnam as a market economy in trade defence investigations. (Photo: Cong Hieu)

Determining whether a country has a market economy is often based on an assessment of the level of state intervention in business decisions of enterprises as well as the level of state control and intervention in factors of production such as capital and labor.

A country with too much state intervention may not be considered a market economy. If the exporting country is not considered a market economy, instead of using information on costs and prices of the producing and exporting enterprises themselves to calculate the dumping margin, the importing country will use representative information from enterprises of a third country that is considered a market economy.

As a result, dumping margins are often set higher, resulting in much higher trade defence tariffs than in countries considered to be market economies. In some cases, trade defence tariffs on businesses from countries not considered to be market economies can be as high as 100%.

To date, Vietnam has been recognized as a market economy by 71 countries and territories through various forms, including many important trade partners. Being recognized as a market economy creates conditions for export goods to be treated more fairly, have better conditions to penetrate and expand markets, and have more stable production and business activities of enterprises. A stable and transparent environment will attract investment capital, contributing to promoting economic development.

Cong Hieu

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Source: https://vtc.vn/anh-se-cong-nhan-viet-nam-la-nen-kinh-te-thi-truong-trong-dieu-tra-phong-ve-thuong-mai-ar807701.html