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The door to US market narrows to Vietnamese exports   2010-09-30 - Nguoi lao dong

Once the US tightens its laws on trade remedies, export companies, including those in Vietnam, will have even less opportunities to win dumping lawsuits, lawyers have warned.


On September 29 in Hanoi, the Trade Remedies Council (TRC) under the Vietnam Chamber of Commerce and Industry (VCCI) organized a workshop, warning Vietnamese export companies of the big difficulties they may have to face when the US Department of Commerce (DOC) has decided to tighten the laws on anti-dumping and anti-subsidy against non-market economies.


The decision by DOC is believed to create big impacts on Vietnam’s exports to the US market.


What will happen?


William H. Barringer, Lawyer from Winston & Strawn law firm, who participated in the first Vietnam’s anti-subsidy lawsuit and is now following the two biggest lawsuits in China, noted that the US has several aims when building the policy on tightening trade remedies. First of all, it aims to make it more difficult to remove anti-dumping decisions imposed on products. Second, it aims to increase the complexity of procedures, making it a burden for defendants to sue.


In general, the new policy will force export countries to pay higher expenses, but they do not have much chance to win lawsuits.


“My experience is that there will be many more lawsuits against Vietnamese companies,” the lawyer said. In the tra fish case, Vietnamese companies still have not escaped anti-dumping taxation, though final administration review has ended.


In principle, Vietnam has an advantage in exports, thanks to the weak currency. However, in reality, the advantage cannot bring the desired effects because of the characteristics of the non-market economy. For example, in the shrimp lawsuit, the US calculated the production costs by considering the expenses in a third country.


Vietnam advised to be wary of Chinese investment


The lawyer warned that, in the eyes of American producers, Vietnam could be a threat in the future, because many Chinese manufacturers are setting up workshops in Vietnam to avoid anti-dumping duties imposed by the US on their products.


After lawsuits against Chinese air-conditioners, wood furniture products and steel hangers, exports of products from Vietnam have increased sharply.


According to the Competition Administration Department (CAD), an arm of the Ministry of Industry and Trade, the US has officially declared it will investigate the steel hanger case. Vietnam may face accusations of dumping Chinese steel hangers in the US because the products have similar characteristics and the main materials are sourced from China. The sharp increases in volume also occurred right after anti-dumping duties were imposed on China.


Statistics show that Vietnam’s total production capacity was 5000 products in 2009, but firms asked for 15,000 certificates of origin (C/O)


Dinh Thi My Loan, Chair of TRC, also predicts that Chinese enterprises bearing anti-dumping duties would try to invest in Vietnam and other markets instead of China. Therefore, Vietnam should be cautious. Loan added that it would be better for enterprises to contact TRC for advice about investment projects.


To date, only 22 members of the World Trade Organisation have recognized Vietnam’s economy as a market economy.

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