Early warning information, a special “asset” for trade defense in the aluminum industry

In fact, the number of trade defense cases against Vietnam's export goods has increased rapidly in recent years, including aluminum products. Sharing about this issue, Mr. Vu Van Phu - Vice President and General Secretary of the Vietnam Aluminum Association said that early warning information from the Ministry of Industry and Trade and especially from the Department of Trade Defense or from trade counselors in other countries will be extremely valuable for businesses and industries.

Could you share about the characteristics of some trade defense cases that the aluminum industry has had to deal with recently and what advantages and difficulties the aluminum industry has encountered in the process of responding to trade defense cases in foreign markets, sir?

Recently, the Vietnamese aluminum industry has faced a number of trade defense cases, two of which stand out.

The first case is the anti-dumping case against aluminum profiles originating from China (case code AD05) and the second case is the lawsuit filed by US enterprises against extruded and extruded aluminum products originating from Vietnam. Both cases are very important to Vietnamese aluminum enterprises.

Mr. Vu Van Phu - Vice President and General Secretary of Vietnam Aluminum Association

With the AD05 case, this is a very important final review for aluminum industry enterprises. Because before the decision to review anti-dumping tax on aluminum products originating from China in 2019, the Vietnamese aluminum market was overwhelmed by a large amount of Chinese aluminum products, and Vietnamese aluminum factories at that time reduced their capacity by 50-60%. After the decision to impose anti-dumping tax by the Ministry of Industry and Trade, Vietnamese enterprises recovered very quickly and retained the market.

Regarding the case of US enterprises requesting to sue Vietnamese enterprises for extruded and post-extruded aluminum products, the US has officially initiated an investigation into the case (case code A552837). This is also a very important case for Vietnamese aluminum enterprises, because the US is a very large export market and the scope of this investigation is very wide, affecting many aluminum enterprises.

In terms of advantages and disadvantages, aluminum is a diverse and abundant commodity and is used in most industrial and civil fields. Therefore, the market for aluminum products is very wide and diverse. Vietnamese enterprises are very flexible and quick to apply science , technology and especially the technical labor in Vietnamese enterprises has relatively high skills.

However, there are still many difficulties. First of all, regarding the policy mechanism, up to now there has not been any policy to encourage the export program of the aluminum industry and even currently, the exported aluminum profile products are subject to a minimum tax rate of 5%. Therefore, the competitiveness of aluminum industry enterprises has also significantly decreased in the international market.

Another difficulty is that the EU and US markets continuously apply trade defense measures. Most recently, the US officially sued Vietnam's aluminum and proposed a tax rate of 53.7%. This will make it very difficult for aluminum businesses to maintain the market, or switching to another market is also quite difficult at the present time.

How has the Aluminum Industry received and acted on information about trade defense warnings? How effective has this information been in adjusting the production and export plans of aluminum industry enterprises to limit the risk of being investigated for trade defense?

Vietnam is deeply integrating into the international economy , participating in many free trade agreements, so the use of trade defense measures by our country or other countries is also a suitable thing according to international practice. Since the beginning of the year, the aluminum industry has continuously faced 4 trade defense cases, causing a lot of pressure on Vietnamese enterprises, especially when the Vietnamese aluminum industry is still young, the experience in responding to and participating in trade defense cases is still very little, limited experience.

Fortunately, the aluminum industry has an organization called the Vietnam Aluminum Association. This is a bridge between aluminum businesses and ministries, branches and especially the Ministry of Industry and Trade. The Association continuously updates information from the Trade Defense Department and the Early Warning Center to grasp the information, through which businesses or the Association will consult opinions and ways to handle trade defense cases.

In particular, recently, we have coordinated with the Department of Trade Defense to organize a training program for aluminum industry enterprises to improve their understanding of international trade, and how to handle trade defense when being sued or imposed anti-dumping tax by other countries. Through this, enterprises also have a deeper understanding of how to respond in such situations and have plans to adjust their production and business plans accordingly, especially being ready to prepare data to participate in such lawsuits, protecting the legitimate rights of their enterprises and their industries.

Early warning information, a special “asset” for trade defense in the aluminum industry - Photo: Tien Dat

In order for businesses in the aluminum industry to minimize the risks of being subject to trade defense measures in export markets in the coming time, from the industry's perspective, what additional support do we need, especially in the matter of early warning?

The aluminum industry has been popular for all businesses that in the context of strong integration, the economy is both volatile and difficult as it is today, the trend of protecting domestic production is increasingly popular, this is a trend that must be accepted.

On the business side, we also disseminate to businesses the need to proactively equip themselves with full knowledge of trade defense and use trade defense measures as a tool to protect their industry and their business.

Enterprises also need to diversify their products to diversify their markets and not depend on any traditional market. In particular, we encourage and recommend that manufacturing enterprises should not compete on price, because competing on price increases the risk of being investigated for trade defense.

The aluminum industry also needs the continuous support of the Ministry of Industry and Trade and especially the Department of Trade Defense in providing information, guidance, dissemination and updating of knowledge for businesses and industries so that businesses are ready to enter larger playgrounds. We consider such information as a special asset that those who know early will have an advantage. Therefore, early warning information from the Department of Trade Defense and from trade counselors in other countries will be extremely valuable to our businesses and industries.

In addition, we also have some wishes and suggestions for the Ministry of Industry and Trade, the Ministry of Planning and Investment and localities. When calling for investment, we should focus on attracting investment in industries and products with advantages in technology and clean production so that the products have more advantages in the international market, avoiding attracting investment in industries with excess capacity such as the current aluminum industry, leading to avoiding some foreign investors coming to Vietnam to wash their origin, avoiding trade defense measures that affect the reputation of domestic manufacturers.

Thank you!

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