Proactively turning challenges into opportunities.

With the increasing number of trade defense investigations against Vietnamese export goods, businesses need to strengthen their response to turn challenges into opportunities.

Significant risks from trade defense investigations.

At the seminar "Combating the Evasion of Trade Defense Measures and Maintaining a Sustainable Flow of Export Goods" held on November 1st, organized by the Industry and Trade Newspaper, Mr. Chu Thang Trung – Deputy Director of the Trade Defense Department, Ministry of Industry and Trade – stated that the number of trade defense investigations against Vietnamese export goods is increasing daily. Accordingly, by the end of September 2024, there had been 263 trade defense investigations related to Vietnamese export goods, with half of them being anti-dumping, safeguard, anti-subsidy, and anti-circumvention investigations.

In particular, trade defense investigations are now covering a wide range of goods, especially metals (steel, aluminum), chemicals, plastics; and agricultural and forestry products, notably wood and wood products. “ Most investigations involve goods with high export turnover. For example, the US investigation into tax evasion on wooden cabinets and dressing tables – these are goods with export turnover to the US market reaching $3.4-3.5 billion (in 2023); or the US investigation into anti-dumping of solar panels, which have export turnover exceeding $4 billion (in 2023),” Mr. Trung said.

The number of trade defense investigations against Vietnamese export goods is increasing daily. Photo: Duc Duy/TTXVN

Notably, according to the head of the Trade Remedies Department, in recent times, countries have increased investigations into circumvention of trade defense measures due to the shift in production as well as accusations from markets that goods exported from Vietnam are circumventing trade defense measures applied to goods from other countries. " Previously, investigations into circumvention of trade defense measures focused on fraud and misdeclaration of origin, but now they focus on whether goods produced in Vietnam create significant added value or only perform certain stages of production," said Mr. Chu Thang Trung.

The United States is currently the market initiating the most trade defense investigations and anti-circumvention investigations against Vietnamese exports. Mr. Do Ngoc Hung, Commercial Counselor and Head of the Vietnamese Trade Office in the United States, stated that in October 2024 alone, two Vietnamese products were subject to anti-dumping and countervailing duty investigations by plaintiffs. Consequently, Vietnamese exports have faced four trade defense investigations from the US market in less than 30 days.

According to Mr. Do Ngoc Hung, the US is increasing trade defense investigations due to the sharp increase in Vietnam's exports to this market; in the first nine months of 2024 alone, Vietnamese exports to the US reached over $88 billion. Furthermore, the US has not yet recognized Vietnam as a market economy , so exported goods are often targeted for trade defense investigations.

In addition, Mr. Do Ngoc Hung added that, with the US presidential election approaching, the support and power between the two candidates are very close, and the administration's policies are all focused on domestic issues in the hope of gaining more votes. "Some labor unions representing American workers have voiced their support for the administration, and naturally, businesses in those industries want their support to be worthwhile and reciprocated through protectionist measures and technical safeguards, " Mr. Hung said.

Currently, the negative impact of trade defense investigations, especially those investigating circumvention of trade defense measures against Vietnamese exports, is significant. From the perspective of the wood industry, Mr. Ngo Si Hoai, Vice President and General Secretary of the Vietnam Wood and Forest Products Association, shared that businesses suffer losses even during the initial stages of litigation, and the investigation process leaves them constantly anxious. High tariffs are imposed, effectively creating an "embargo" that prevents exports. Furthermore, being placed on a "blacklist" for trade defense investigations means having to leave the market with substantial losses.

Mr. Chu Thang Trung also clarified that, previously, investigations into circumvention of trade defense measures focused on detecting fraudulent activities and illegal transshipment, often committed by only a few businesses. However, the regulatory systems for combating circumvention of trade defense measures in various countries have now been perfected, shifting from investigation and prosecution to prevention.

"Accordingly, the scope of application of anti-circumvention measures against trade defense measures will be much larger, potentially affecting an entire industry rather than just a few individual businesses. In particular, during the investigation process, businesses that do not proactively provide information or provide inconsistent information will be subject to much higher tariffs," Mr. Trung emphasized.

Seminar "Combating the evasion of trade defense measures and maintaining a sustainable flow of goods exports". Photo: Quoc Chuyen

In every crisis lies an opportunity.

Currently, alongside the process of liberalization and globalization, protectionist policies are re-emerging in many countries in various forms. Developed countries are increasingly concerned about consumer safety, sustainable development, and combating climate change. This has led to the establishment of new standards and regulations related to supply chains, raw materials, labor, and the environment for imported products. In particular, many markets are increasing investigations into the application of trade defense measures and investigations into circumvention of these measures. This context is posing more difficulties and challenges for Vietnam's export activities.

Sharing his views on this issue, Mr. Ngo Si Hoai stated that, in the face of the "wave" of trade defense investigations, businesses are crucial entities and need to prepare themselves with knowledge and skills for defense. Especially when under investigation, they need to cooperate and provide complete information to the investigating agency carefully, and cannot simply "delegate" the entire case to lawyers. " Businesses with trade defense skills can overcome challenges and the risk of being blacklisted is not high. Therefore, in every crisis lies an opportunity; if we strengthen corporate governance, practice accountability, and conduct transparent production, we have the chance to develop markets and achieve sustainable exports," Mr. Hoai said.

Looking ahead, to protect the legitimate rights and interests of businesses and ensure sustainable export activities, Mr. Chu Thang Trung stated that the Trade Remedies Department will continue to work alongside export businesses in handling foreign trade defense investigations through key programs and activities. Specifically, the Department will strengthen capacity building for businesses, implement early warning systems, and analyze and assess high-risk goods susceptible to trade defense investigations from various markets. Simultaneously, the Department will advise the Ministry of Industry and Trade and the Government on effective policies to respond to trade defense investigations from foreign markets.

On behalf of the Trade Office, Mr. Do Ngoc Hung also informed that, from a market perspective, the Vietnamese Trade Office in the United States is committed to always supporting the legitimate rights and interests of export businesses, providing support within its functions and duties so that businesses can achieve the best possible results in the lawsuit. At the same time, the Trade Office will always, and will continue to, monitor import and export data, gather information from various relevant parties to provide early warnings of potential lawsuits. In particular, it will strengthen relationships with experienced law firms to support businesses in such cases.

“The Vietnamese Trade Office in the United States will also utilize information channels to exchange information and work with partners and relevant US agencies, strengthening consultations and expressing views and arguments based on the guidance of the Ministry of Industry and Trade. The Trade Office will also report to the Ambassador and coordinate with relevant units of the Embassy to lobby and exchange information at different levels to support the handling of the case,” Mr. Hung said.

Source: https://congthuong.vn/dieu-tra-phong-ve-thuong-mai-hang-hoa-xuat-khau-gia-tang-chu-dong-bien-nguy-thanh-co-356233.html