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Dire need for trade defense measures

Released at: 11:07, 18/12/2015

Dire need for trade defense measures

Vietnamese enterprises at risk and need to work together in trade defense matters, conference hears.

by Huong Loan - Luong Nhi

Vietnamese enterprises have almost no trade defense measures in place and technical barriers are weak, Deputy General Director of the Hoa Sen Group, Mr. Vu Van Thanh, told a conference on December 16 on effectively utilizing trade defense measures to protect domestic manufacturing.

Short on knowledge

Knowledge among Vietnamese enterprises about trade defense measures is a major concern, according to Mr. To Thai Ninh from the Market Surveillance Agency under the Ministry of Industry and Trade. A 2014 survey by the Vietnam Chamber of Commerce and Industry showed that 64 per cent of local enterprises had heard of trade defense measures but were not fully aware of what they may be.

Meanwhile, 16 per cent of respondents knew nothing about trade defense and only 1.8 per cent had researched such measures after becoming embroiled in related lawsuits.

“They are disappointing numbers that show the poor knowledge among Vietnamese enterprises,” Mr. Ninh said. He pointed out that enterprises not only find it difficult to conduct lawsuits due to lacking finances but also find it difficult to fight lawsuits instigated against them. Due to conflicts of interest, he explained, gathering enterprises together to conduct joint lawsuits has proven difficult.

In the first nine months of this year Vietnam faced 13 lawsuits regarding trade defense. Among them were eight cases from Southeast Asian countries. Since joining the WTO, meanwhile, Vietnam has used trade defense only twice, whereas Indonesia and Malaysia use it often.

Mr. Thanh said that the difficulties for Vietnamese enterprises in using trade defense stem from ineffective stipulations on technical barriers. Neighboring countries, however, have adopted strict stipulations on technical barriers for Vietnamese exports. Moreover, it often takes a long time to adjust existing technical barriers, he complained. Domestic enterprises have therefore not considered trade defense as a useful measure to protect the manufacturing industry.

The accounts of Vietnamese enterprises cannot prove the damage done by imported goods, he added, and if enterprises don’t get together the damage to their market share cannot be known.

In need of links

The general sentiment at the conference was that Vietnamese enterprises must understand the investigation process and procedures to protect domestic manufacturing from foreign goods.

Deputy Director of the Market Surveillance Agency, Mr. Nguyen Phuong Nam, said that free trade agreements help Vietnamese enterprises have more investment but they will face more trade defense measures from foreign enterprises.

As the market opens up foreign products will come to Vietnam, and due to their poor competitive capacity the smaller domestic enterprises will die and then the larger enterprises. The community spirit among Vietnamese enterprises is poor, but they need to come together to use trade defense measures.

Mr. Nam added that the role of associations in Vietnam and the knowledge of Vietnamese lawyers on trade defense are also poor.

According to lawyer Dinh Anh Tuyet from IDVN, a legal organization, when conducting a lawsuit the enterprises involved not only need to represent 25 per cent of the market share but also require government support.

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