Which export groups face the risk of being investigated for trade defense?

Many export markets increase trade defense investigations

According to the Department of Trade Defense - Ministry of Industry and Trade, by the end of September 2023, Vietnam's export goods faced 234 trade defense cases initiated by countries. In the first 9 months of 2023 alone, countries initiated 7 trade defense cases against Vietnam's export goods.

Trade defense investigations against Vietnam are mainly anti-dumping and anti-tax evasion, coming from markets that regularly conduct trade defense investigations such as the United States, India, Australia, etc. The investigated items are quite diverse, from export items with turnover of tens of millions to billions of USD. In particular, steel, fiber, etc. are items that are regularly investigated following the general trend in the world .

Countries will tend to apply more and more trade defense measures. Photo: VNA

The Trade Defense Department believes that the fact that Vietnamese exports are facing more and more foreign trade defense investigations is an inevitable consequence of rapid export growth and Vietnam's deeper participation in the global value chain in the context of many fluctuations in the world situation.

Accordingly, Vietnam's participation in many free trade agreements, tariff barriers are gradually being removed, and the export of many of our products is growing strongly. However, this also puts pressure on domestic enterprises in the import market, forcing their Government to use policy tools to protect the interests of domestic manufacturing industries, including trade defense measures, which are tools permitted by the World Trade Organization (WTO).

In addition, participating in regional supply chains makes Vietnam a country that is often sued together with other countries such as China, India, etc., which are countries with large export turnover, are often investigated for trade defense or are suspected of illegal transshipment to avoid trade defense taxes.

It is forecasted that the world and regional situation in the last months of 2023 will continue to be complicated, with global economic growth from now until the end of the year slowing down significantly due to the prolonged and continuous impacts of tight monetary policy as well as restrictive credit conditions, causing protectionist trends in many economies and regions to increase.

In addition, the continued implementation of new-generation free trade agreements (FTAs) such as CPTPP, EVFTA, UKVFTA will help our export goods gain important advantages in export markets, but will also increase competitive pressure in the domestic market, leading to some acts of taking advantage of Vietnamese origin for illegal benefits.

Therefore, countries will tend to apply more and more trade defense measures and Vietnamese exports will also face more and more trade defense investigations from foreign countries.

According to the Department of Trade Defense, Vietnam's export industries at high risk of being investigated and subject to trade defense measures by some countries in the coming time include metals and metal products (such as steel products, aluminum products, copper products), rubber and plastics, chemicals, construction materials, and wood.

“ These are industries that have grown rapidly in recent times and Vietnamese enterprises have competitive advantages in export markets, so they are likely to lead to trade defense investigations, ” said the Trade Defense Department.

For Vietnamese enterprises, being investigated by foreign countries and having trade defense measures applied will have negative impacts. In particular, if a business's export goods are subject to high trade defense tax rates, it will reduce its competitive advantage, leading to the loss of part or all of the export market.

Timely update of early warning information

In the context of the continuous increase in the number of trade defense cases, anti-tax evasion and trade defense measures initiated by foreign countries, to ensure the legitimate rights and interests of exporting enterprises, the Department of Trade Defense recommends that enterprises and industry associations: Actively learn about legal regulations and practices of trade defense and anti-avoidance investigations of exporting countries, especially for target markets.

At the same time, regularly update early warning information from the Ministry of Industry and Trade (Department of Trade Defense) to take early and timely actions and have appropriate export strategies, and establish information channels with partners, associations, and industries to promptly update and handle lawsuits and arising situations; diversify markets, diversify products, avoid overheating export growth in one market, especially for markets that regularly use trade defense tools or have conducted trade defense investigations on Vietnamese export goods.

Along with that, it is necessary to focus on improving the product value chain, gradually shifting to competing on quality and limiting competition on price; having a strategy to control export volume and selling price appropriately to avoid being considered dumping, receiving subsidies; perfecting the corporate governance system, implementing a management system, tracing the origin of raw materials clearly and transparently; applying an accounting system according to international standards, keeping full invoices and documents to be able to prove no dumping, no subsidies, no evasion when being investigated.

In particular, the Trade Remedies Authority noted that businesses need to strictly comply with regulations on certificates of origin; not assist in acts of origin fraud, evasion of trade defense measures; and coordinate with the Ministry of Industry and Trade in preventing acts of counterfeiting, origin fraud and illegal transshipment.

"It is necessary to fully and comprehensively cooperate, provide information and documents as requested by foreign investigation agencies when being investigated; closely coordinate with the Ministry of Industry and Trade (Trade Defense Department) in the process of responding to the incident to receive timely guidance and support" - the Trade Defense Department clearly stated.

The Department of Trade Defense, Ministry of Industry and Trade will continue to promote activities to support export enterprises in foreign trade defense investigations and consider this a key task. In addition, continue to use the early warning system to make early and remote forecasts to help enterprises be more proactive in preparing resources and building effective response plans to foreign trade defense investigations.

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