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Anti-dumping mud sticks on firms   2010-04-04 - Vietnam Investment Review

Foreign investors who fled to Vietnam to avoid anti-dumping taxes are contributing to increasing anti-dumping lawsuits against Vietnam’s exports. 

 

Defendants of around 30 per cent of anti-dumping cases against Vietnam’s exports were regional foreign companies who had already been sued for dumping products made in their home countries, the Vietnam Competition Authority (VCA) revealed last week.

Le Sy Giang, deputy head of the VCA’s Trade Remedies Board, said there were signs several foreign investors had set up projects in Vietnam, which mainly focused on assembling and packaging to avoid anti-dumping taxes. He said those companies had triggered many anti-dumping cases which then hurt legitimate Vietnamese producers.

“It is a fact that some Chinese or Taiwanese producers who had been hit with high anti-dumping duties by an import country moved their factories to Vietnam and were later detected and sued again by that country,” said Giang.

For example, a Chinese air conditioner producer was sued by Turkey for dumping products four years ago and last July, Turkey took legal proceedings against that company’s air-conditioners made in Vietnam’s southern Binh Duong province.

Another example, Giang said, was the anti-dumping case initiated by the European Union (EU) against bicycles made in Vietnam in 2004. He said all the bicycle companies sued by the EU were Taiwanese enterprises.

“We welcome foreign businesses to invest in Vietnam, but we must cope with dishonest investors whose actions have badly affected the destinies of many Vietnamese companies,” said Giang.

He stressed that all Vietnamese firms were being punished as anti-dumping mud tended to stick. For example, according to the Vietnam Association of Bicycle and Motocycle, Vietnam’s annual bicycle exports to the EU decreased sharply from $150 million to less than $50 million after the lawsuit in 2004.

“After anti-dumping taxes are imposed again, these foreign companies often leave Vietnam for another country, while Vietnamese producers are in hot water for a long time,” said Giang. He said anti-dumping decisions were often reviewed after five years. However, the practice of moving nations to avoid anti-dumping penalties is common throughout Asia.

Recently, Malaysian carbon steel fastener manufacturers complained they faced unhealthy competition in the EU market from China-made mild-steel fasteners shipped via Malaysia to avoid a high anti-dumping duty of 87.3 per cent imposed by the EU since February, 2009. The Malaysian manufacturers said the unhealthy competition pressured them to lower their selling prices and leave them on the brink of also being slapped with a high anti-dumping duties by the EU.

Tran Huu Huynh, deputy general secretary of the Vietnam Chamber of Commerce and Industry (VCCI), said the VCCI had discovered many cases in which companies used false documents to obtain certificates of origin for agricultural or industrial products transferred from a regional country via Vietnam to take advantage of generalised system of preferences tariffs.

Huynh, who is also head of the VCCI’s Legal Department in charge of granting certificates of origin for Vietnamese exports, said some foreign investors set up business in Vietnam only to do unhealthy goods transfers and avoid anti-dumping taxes. He said the department would remain vigilant against offending foreign enterprises.

Some observers claimed Vietnam’s open policy towards all foreign investors had left it open to abuse. However, in the short-term, Vietnam had no choice but to enhance the capacity and coordination of agencies in charge of granting certificates of origin.



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