Tyre exports to Brazil encounter difficulty

According to the Ministry of Industry and Trade (MoIT)’s Vietnam Competition Authority (VCA), Brazil's Ministry of Development, Industry and Foreign Trade has announced its final decision on an anti-dumping duty imposed on bicycle tyres imported from China, India and Vietnam.

Under the latest decision, tyres exported by Kenda Rubber (Vietnam) Company Ltd have to pay an anti-dumping duty of US$0.59 per kilo, while products of Link Fortune Tyre Tube Company Ltd along with other Vietnamese tyre exporters are subject to a rate of US$2.8 per kilo.

Brazil launched an anti-dumping investigation into imports of bicycle tyres from Vietnam following a request by the Brazilian enterprise Industrial Levorin SA in September 2012.

The product subject to the investigation was classified as item HS: 4011.50.00. This was Brazil’s third investigation on Vietnamese exports in 2012, after rolled steel and automobile tyres.

Brazilian tyre producers claimed that Brazil’s tyre export growth went up dramatically and made a strong negative impact on their production.

Imported Vietnamese tyres accounted for more than 18.5% of the total market in 2011.

The VCA had earlier warned over the risk of anti-dumping lawsuit in Brazil as Vietnam became the second largest exporter of tyres to the South American market in 2011, second only to China, with total revenue of US$3.8 million, or a year-on-year increase of 34%.

At present, the market economy status of both Vietnam and China has not yet been recognized by Brazil.

Recent statistics showed that the average price of tyres imported from India and China hovered around US$3.5/kg and US$1.81/kg, respectively, while those imported from Vietnam was sold at US$2.86/kg in Brazil.

The anti-dumping tax levied on Vietnamese tyres is lower than similar tyres from India and China.

According to the Vietnam Rubber Association, 830 businesses are operating in the industry with major producers- the Saovang Joint-stock Rubber Company (SRC), the Danang Rubber Joint Stock Company (DRC), and the Southern Rubber Industry JSC company (CSM).

Vietnam is considered a lucrative market for tyre exports which has attracted world-renowned producers such as Bridgestone, Michelin, Kimho, Yokohama and Kenda.

Previously, the industry had primarily served domestic consumption, but since 2010 it has enjoyed strong growth and helped Vietnam secure a firm foothold in the overseas marketplace.

So far, Vietnamese tyres have been exported to 137 markets in which Brazil has seen a rising trade turnover with Vietnam in recent years.

Recently, Brazil has applied many preventive measures against imported products that may harm its domestic production.

In addition to the anti-dumping duty on Vietnamese bicycle tyres, Brazil is also conducting another investigation on imported motor tyres.