Anti-dumping protectionism: A double edged sword
(VOV) - Despite World Trade Organization (WTO) commitments made by countries around the globe to liberalize trade and fight against protectionism, the tendency to impose trade-restricting measures and harm exports of other countries has been on the upswing.
Against the backdrop of a world economy in recovery, protectionism is particularly important because it runs contradictory to international integration and fuels continuing economic uncertainty. It also damages value chains.
During the past 20 years there have been a total of 80 trade-unfriendly measures, principally anti-dumping lawsuits, lodged against Vietnam according to the Competitiveness Management Department under the Ministry of Industry and Trade.
The number of measures filed affecting Vietnamese exports has been trending upwards, with the US accounting for the highest number, 20%. The European Union (EU) made up 15% of the total cases and India and Turkey, 11%.
The number of incidences for which countries have imposed new export restrictions has also been on the uptick, a trend seen as worrisome for the detrimental consequences such practices can have for both the global commodity markets and value chains.
Typical methods of protectionism are import tariffs, quotas, subsidies or tax cuts to local businesses, new import licensing procedures, reference values, minimum transaction prices or banning trade altogether.
These measures have most seriously impacted the Vietnamese seafood, garment and textile and footwear exporters, causing them to lose markets.
Notably, however, protectionism measures have not been that well understood nor utilized by Vietnam. As of September, Vietnam had conducted merely three anti-dumping investigations on imported goods.
The only measure that was successful resulted in Vietnam imposing an anti-dumping duty on cold-rolled stainless steel from China, Malaysia, Indonesia and Taiwan (China) from October 5, 2014 forward.
Vietnamese exporters should increase links amongst themselves and seek information on international legal regulations to reduce losses to the manufacturing sector by unfair trade practices, said Nguyen Huu Truong Hung at the Competitiveness Management Department.
Trade protection measures are a valid tool the WTO allows its member countries to use legally if member countries fail to strictly comply with agreements of the WTO on anti-dumping, anti-subsidy and self-defence capital.
Deputy Minister of Industry and Trade Do Thang Hai in turn noted many countries have used anti-dumping lawsuits quite effectively as tools to fight against unfair competitiveness of foreign importers.
If found guilty of unfair trade practices a foreign company would be prohibited from exporting to the Vietnam market for a period of five years, which could be extended if investigations show the practices were continuing.
Anti-dumping lawsuits and other measures should not be viewed as protectionism measures, but rather as trade policy tools to protect fair and balance trade, Hai underscored.