Part 1: Overcoming barriers in international trade relations

Part 2:Dealing with difficulties

What are trade barriers? And what is the most import issue that businesses and trade associations should focus on? Trade barriers are technical barriers set up by importing countries to protect their domestically-made products such as duties, standards on food and hygiene, packaging and regulations on chemicals which are prohibited in food products.

More such barriers will be built in the wake of each economic crisis to prevent imported goods and protect domestic production. Consequently, businesses and trade associations should grasp changes and fluctuations in trade barriers to protect domestic production. For instance, tax rate will be lower if there are no anti-dumping law suites but businesses will have suffer a much higher tax rate if anti-dumping duties are imposed. To cope with trade barriers, Vietnamese businesses need to have a thorough grasp of laws, standards and regulations, the markets in exporting countries and use legal services.

In fact, many Vietnamese businesses are not yet fully acquainted with international laws, particularly multilateral and bilateral trade agreements so they easily run into difficulties from trade barriers.

The General Secretary of the Vietnam Association of Wood and Forestry, Nguyen Ton Quyen says that the wood industry is finding ways of overcoming trade barriers to boost exports to the EU. The association is now working with the European Commission to make a list of wood exporting countries which are fully certified and legal for Vietnam’s reference. In addition, Vietnamese businesses should restructure their production to win bigger contracts, Quyen noted.

Lessons drawn from anti-dumping lawsuits on shrimp exports to the US and bicycles and footwear to the EU is to strengthen coordination among businesses and the activeness of business associations. For instance, the Vietnam Leather and Footwear Association (Lefaso) should support businesses because they need to find lawyers or consultancy services to check contracts before signing them. When disputes occur, the association will be a platform to help businesses have a stronger say.

Nguyen Thi Tong, Lefaso Secretary General, said that there are many obstacles when carrying out trade agreements and the association has proposed that the Government work with the EU to stop imposing tariffs to protect the Vietnamese business community. It also asked the Government to hold regular bilateral and multilateral negotiations on international trade because 90 percent of products are for export. Businesses should also share their experiences with each other, strictly follow regulations on branding, limit the use of harmful chemicals and help each other overcome barriers.

State agencies overseas also play an important role in helping businesses. Tran Huu Huynh, Secretary General of the Vietnam International Arbitrator Centre said that an early warning system should be worked out to minimise risks. This could help businesses and associations access market information and expand their market overseas. Markets where businesses are likely to face anti-dumping lawsuits should also be lobbied.

Sharing similar views, Vu Ba Phu, Deputy Head of the Competition Department of the Ministry of Industry and Trade, said that the ministry is making a big effort to create an early warning system based on information from more than 50 foreign markets, to help businesses avoid trade barriers. The system will be submitted in September.

Trade barriers always exist together with trade activities. If businesses want to access the global market, they have to learn ways of overcoming them. They can minimise the impact of trade barriers by grasping and coping with them, actively co-operating with each other. More effective support from the State and trade associations is also needed.