Trade remedies a must for businesses to join integration process

Alongside the efforts of local businesses to improve product quality and diversify markets, their proactive use of trade remedy tools aims to establish a fair competition environment whilst protecting the legitimate interests of many domestic manufacturing industries.

Vietnamese steel is an export item that has had to deal with many trade remedy cases.

As part of the process of international economic integration, the number of trade remedy cases is currently seeing an upward trend, with as many as 208 cases regarding foreign trade remedies being made against Vietnamese exports at present.

Although trade remedies are a relatively new thing for the nation, they have been actively used in recent years with a view to establishing a fair competition environment and protecting the legitimate interests of many domestic manufacturing industries.

Realising that trade remedy-related lawsuits against exported Vietnamese steel, as well as many other goods, not only occur in major markets such as the United States, Canada, Australia, and Europe, but also in regional countries such as Thailand, Indonesia, and Malaysia, Nghiem Xuan Da, chairman of the Vietnam Steel Association, said that the trend is very clear. In line with this, the near future may see exported local goods sued against trade remedies in any country, or in any large or small market relating to any sector and commodity.

The seafood sector has also had to deal with a string of anti-dumping investigations in some export markets, especially the US market.

Nguyen Hoai Nam, deputy general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), shared that since the first lawsuit against the pangasius (tra fish) industry in 2002, domestic enterprises have ran into misunderstandings about anti-dumping measures.

However, the efforts of the business community and competent Vietnamese agencies has helped to bring about positive initial results, with sever major firms pursuing lawsuits to avoid losses.

“Up to now, through three cases of trade remedy, respondent enterprises have all responded positively and received quite good investigation results. It is an opportunity to affirm to US businesses that Vietnam is completely a market economy that has fair competition based on quality," said Nam.

According to Le Trieu Dung, head of the Trade Remedy Authority under the Ministry of Industry and Trade, the nation’s rapid growth in production and export capacity could be the main reason behind trade remedies for exports sharply increasing.

“Especially amid the COVID-19 pandemic, countries have focused on increasing support for a number of domestic manufacturing industries, thus ensuring supply chains in strategic items. Many countries have now enhanced trade defence measures for strategic commodities such as iron, steel, and fertilizers," Dung emphasized.

Market diversification to limit price-based competition

The facts show that in recent years, there has been obvious changes from enterprises in their awareness of trade remedies. The majority of domestic manufacturing enterprises therefore consider trade fairs to be an indispensable tool of the integration process as well as the process of entering foreign markets of each industry and each enterprise in order to compete with imported goods.

Domestic manufacturing industries, when faced with trade remedies, will gradually realise that, providing that they want to ensure effective integration and long-term development, they must "live together" with trade remedy measures, thereby proposing strategies in which to create sustainable development.

There remains plenty of difficulties posed for businesses and industries in the process of participating in and dealing with trade remedy cases.

According to Nguyen Thi Thu Trang, director of the Center for WTO and Integration under the Vietnam Chamber of Commerce and Industry (VCCI), after some initial encounters, at present a number of associations and enterprises have fully grasp issues relating to trade remedies.

“The need to learn and understand about trade remedies and the response capacity of enterprises has improved markedly. However, there are still many difficulties posed for them in the process of participating in and receiving trade remedy cases. Therefore, more communication support on response measures is needed from the Ministry of Industry and Trade as well as competent agencies," suggested Trang.

Concurring with this point of view, Xuan Da said that one of the solutions that businesses must pay attention to is to diversify their products and export markets in order to avoid risks when exporting items in large quantities to a specific market area.

Along with this, it remains necessary to develop value chains and domestic raw materials, improve the competitiveness of key export items, and build brands.

As a means of minimising the negative impact of trade remedy measures, Le Trieu Dung, head of the Trade Remedy Authority, suggested that enterprises enhance competition through product quality and limiting competition based on price. This would make it essential to deliberate on risks of trade remedies when formulating production and business strategies, especially for exports.

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