VietNamNet Bridge – The number of trade defense cases against Vietnamese exports is forecast to continue the upward spiral this year, said Nguyen Hai at the law firm Mayer Brown JSM.

Since the first anti-dumping case against Vietnamese rice exported to Columbia in 1994, there have been 49 anti-dumping and three anti-subsidy cases against Vietnamese export items. The number of anti-dumping cases in the last two years is relatively high, six in 2011 and seven in 2012, according to statistics of the Vietnam Chamber of Commerce and Industry (VCCI).

This year, exports of paper and interior furniture to the U.S., cashew to India and color-coated steel sheets to Thailand and Malaysia are facing high risk of anti-dumping petitions, said Hai.

Notably, the number of petitions brought by the markets that often use trade defense instruments like the EU and the U.S. may fall or remain unchanged, while the number of such cases in developing countries such as Brazil, Malaysia and Thailand is forecast to increase.

As trade restrictions are gradually removed in accordance with WTO rules, trade defense becomes a useful and legitimate tool for a country to protect its domestic industry against imports. This explains why the number of trade defense cases is on the rise.

As for Vietnam, the country has been pursuing a policy of foreign direct investment (FDI) attraction, while FDI firms usually operate in manufacturing and processing, generating a large export volume. The more Vietnam exports, the risk of trade defense cases against it will be higher, said Hai.

Another reason is that anti-dumping and anti-subsidy tax evasion is widespread in other countries. It is said that Chinese steel and furniture producers are shifting their production to Vietnam in order to avoid anti-dumping duty imposed by the U.S., said Hai.

Finally, the reason why the number of trade defense cases against Vietnam exports will likely rise in the coming time is that the major trade partners still consider Vietnam a non-market economy (NME), he stated.

Under Vietnam’s WTO commitments, the NME status will be lifted in 2018. Until then, Vietnam will continue to suffer disadvantages in trade defense cases.

The main disadvantage is that when a nation launches a trade defense investigation into Vietnamese products, it does not use Vietnam’s production costs to calculate prices. Instead, it applies the production costs from a third country that is considered as a market economy and equivalent to Vietnam in economic development, usually based on GDP.

This often results in higher dumping margins, Hai said.

Source: SGT