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.

According to the Department of Trade Remedies, Ministry of Industry and Trade , market economy is a concept used by some countries when conducting trade defense investigations on imported goods from other countries.

The UK will not apply unfavorable regulations to goods imported from Vietnam... Illustrative photo: Ministry of Industry and Trade

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 production factors such as capital and labor. Therefore, 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 to have a market economy.

As a result, dumping margins are often determined to be higher, leading to much higher trade defense tariffs than in countries considered to be market economies.

In some cases, trade defense tariffs on businesses from countries that are not considered market economies can be as high as 100%.

According to the Trade Defense Department, up to now, Vietnam has been recognized as a market economy by 71 countries and territories through various forms; including many important trade partners.

Therefore, the recognition of a market economy creates conditions for export goods to be treated more fairly, have better conditions to penetrate and expand the market, and for enterprises to have more stable production and business activities. In particular, a stable and transparent environment will attract investment capital, contributing to promoting economic development.

CHUNG VIET