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ECONOMYTRADE - SERVICE

Vietnam’s exports face protectionism risks

Updated at Saturday, 09 Jun 2018, 09:07
The Hanoitimes - The return of trade protectionism with clearer signs in the first months of 2018 is a major challenge for Vietnam`s exports in the coming time, officials said.
 Vietnam’s seafood exports to the US decreased by 3% to US$1.4 billion in 2017
Vietnam’s seafood exports to the US decreased by 3% to US$1.4 billion in 2017
According to Vu Ba Phu, Director of the Ministry of Industry and Trade (MoIT)’s Trade Promotion Agency, for the first time in many years, the United States has again applied a global safeguard measure in trade (for washing machines).
The US is also willing to contradict itself, changing the rules of origin that have been recognized by itself and maintained in the country for years to be able to levy anti-circumvention tariffs on Vietnam's certain corrosion-resistant steel products.
The recently announced rate of anti-dumping duties on pangasius was also unexpectedly, which can be said to be excessive protection, causing difficult for the exports of Vietnamese pangasius products, Phu said.
Some other countries are even willing to violate the World Trade Organization (WTO) rules to protect domestic production. Indonesia, for example, only allows the import of smartphones if the company makes that phone also has a production facility in Indonesia, or India bans imports of pepper if prices are lower than the minimum price set by its government.
Exports decline
Domestic exporters have also expressed large concern over the rising trade protectionism, saying that their shipments to large and traditional export markets, especially the US, have been negatively affected.
Truong Dinh Hoe, secretary general of the Vietnam Association of Seafood Exporters and Producers (VASEP), said Vietnam’s seafood exports to the US decreased by 3% to US$1.4 billion in 2017 in the wake of the US catfish inspection program and anti-dumping duties on Vietnam’s shrimp and catfish. The shrimp exports to the US decreased by 7.5 percent and catfish exports fell by 10% last year.
Protectionism has also unnerved wooden furniture manufacturers, though they had a prosperous year in 2017.
According to the Vietnam Timber and Forest Product Association (VIFORES), woodwork exports brought US$8 billion in 2017, with which woodwork ranked seventh among export items with largest export turnover. The satisfactory export results were gained thanks to the US anti-dumping lawsuit against imports from China and the Chinese government’s policy on taxing exports. The labor shortage and high labor costs in China, Malaysia and Indonesia also facilitated Vietnam’s exports.
Sources said the Trump administration is considering imposing a tax on imports from China. If this happens, Chinese businesses are likely to flock to Vietnam to set up production bases and make products for export to the US. If so, exports from Vietnam may soar.
Experts said that timber associations have reported a sharp increase in Chinese investments in the woodwork industry, adding that the move aims to help Chinese enterprises avoid US taxation on Chinese sourced imports.
Meanwhile, in Vietnam-US woodwork trade, Vietnam has a surplus of US$2 billion. The surplus, plus massive Chinese investments in the woodwork industry in Vietnam, would make the US pay more special attention to Vietnam.
Sustained growth
To protect legal interests of domestic producers and exporters, MoIT said that it has coped with trade defense and protectionism that are not in line with international commitments, besides maintaining stable export markets and improving the efficiency of trade promotion.
In addition, MoIT has also taken major measures to sustainably step up exports, including restructuring agriculture, closely controlling supply, and gradually improving the quality of agricultural and aquatic products.
At the same time, the ministry will step up institutional reform, refine legal corridors for export activities, accelerate administrative reform, and clear barriers to payment and credit to ensure there is sufficient capital for manufacturing and export.
Minh Tam
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