Companies suggested staying well-informed to avoid trade remedy risks | Company
Hanoi (VNA) – Australia is a potential export market but also poses risks of trade remedy investigations. Businesses therefore need to stay well-informed to avoid risks, said a recent seminar held in Ho Chi Minh City.
Trade between the two countries has grown steadily, averaging 11.5% annually between 2011 and 2021. Australia was Vietnam’s 10th largest trading partner last year, when bilateral trade turnover grew 49% year-on-year to $12.4 billion. It ranked 7th among Vietnam’s trading partners in the first seven months of 2022, said Nguyen Thi Phuong Nga, head of the Asia-Africa markets department at the Ministry of Industry and Trade.
An advantage of Vietnamese exportersis that the cargo structures of the two countries are complementary, she noted, noting that Vietnam ships agricultural products, fisheries and timber, machinery, transport vehicles and steel to the Australia which in turn exports textiles – clothing and leather – footwear materials, coal, iron ore, dairy products, chemicals and chemical products to the Southeast Asian nation.
In addition, the two are also partners in three Free Trade Agreements (FTAs), namely ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Agreement. Partnership (RCEP), added Nga.
Chu Thang Trung, deputy director of the Vietnamese Trade Remedies Authority (TRAV) at the ministry, pointed out that besides market opportunities, challenges remain, including the risks of trade remedy investigations. If trade remedies are imposed, companies could face higher export tariffs compared to pre-FTA levels and lose part or all of the market to which they export.
The World Trade Organization (WTO) and FTAs allow member states to use trade remedies when necessary, countries therefore tend to use this tool to protect domestic production and workers against the growth of imports. Popular trade remedy instruments include anti-dumping, anti-subsidy, safeguard and anti-circumvention duties, said TRAV’s Phung Gia Duc.
Vietnamese exports had been the subject of 222 trade remedy investigations as of June 2022. Eighteen were by Australia, and all anti-dumping and anti-subsidy investigations, with 61% against steel products and 16.7% against other metals. The number of such cases is still increasing.
Duc argued that close coordination between government agencies, trade associations and companies is necessary to ensure good results for exporters in trade remedy cases.
He called for active cooperation from companies not only during investigations, but also during annual and end-of-term reviews to ease or remove trade remedies altogether.
During the seminar, the experts also recommended that companies consider trade remedy risks when developing production, business and export strategies; promote their competitiveness by improving quality instead of reducing prices; and equip themselves with knowledge of trade remedy regulations to have an appropriate response.
The most important thing in international trade is to strictly abide by rules of origin and not circumvent trade remedies, otherwise companies and their entire sectors will suffer serious financial and reputational damage, they added./.