Mar 08, 2018 / 09:50

Vietnam imposes official safeguard duty on some imported fertilizers

The Ministry of Industry and Trade (MoIT) announced to slap official safeguard measures on DAP and MAP fertilizers imported to Vietnam from March 7 due to its damage to the domestic production.

The ministry said that its investigation and application of safeguard measures on imported DAP and MAP fertilizers was carried out in accordance with the provisions of the World Trade Organization (WTO) Agreement on Safeguards and Vietnam’s Ordinance No.42/2002 on safeguards in the import of foreign goods into the country.
Imported DAP and MAP fertilizers are imposed a tax rate of VND1,128,531 per ton
Imported DAP and MAP fertilizers are imposed a tax rate of VND1,128,531 per ton
Under the final decision stated in the ministry’s Decision No. 686/QĐ-BCT, imported DAP and MAP fertilizer products were officially subject to safeguard measures with tax rate of VND1,128,531 (US$49.6) per ton in two years starting from March 7 this year.
According to the ministry, the tax rate is equivalent to only 60 percent of the rate that Vietnam is entitled to apply in accordance with the provisions of WTO and the nation’s laws. However, the ministry decided to impose the lower rate, which equal to the difference between the actual selling price and the selling price at the break-even point of the domestic industry, as the domestic fertilizer production currently meets only 60 percent of local demand.
Industry insiders said that the tax rate is considered to balance benefits of both local producers and farmers.
According to Le Trieu Dung, deputy director of the MoIT’s Trade Defense Department, safeguard measures have clear objectives, to create an equally competitive market, in which domestic fertilizer enterprises will be competing on a long-term basis with imported products.
Though the tax would initially drive prices up in the market, seemingly hurting farmers’ income, it would create a healthy basis for fair competition when the market readjusts stable input prices, he said.
Earlier, on March 31, some domestic fertilizer producers requested that trade defense measures be applied on a number of imported fertilizer products due to their negative impact on domestic production.
Based on the dossier appraisal results, customs data and provisions of the law on safeguards, on May 12, MoIT issued Decision No 1682A/QĐ-BCT on initiating a fertilizer dumping investigation and considering the application of safeguard measures on DAP and MAP imported fertilizer products into Vietnam.
According to the provision, investigation time limit shall not exceed six months from the date the minister of industry and trade decides to investigate (November 12, 2017). In case it is necessary, the investigation time limit may be extended once for no more than two subsequent months.
On August 4, MoIT issued Decision No 3044/QĐ-BCT to apply a provisional safeguard measures on some DAP and MAP fertilizer products imported into Vietnam.
Therefore, to collect all the relevant information for this case, thoroughly examine the opinions of relevant sides and assess the socio-economic impact comprehensively, the investigation agency has proposed that MoIT extend the investigation time of the case by two more months.
Then, the ministry last November issued Decision No 4236 / QĐ-BCT to extend the deadline for investigating cases of applying safeguard measures for DAP and MAP fertilizers imported into Vietnam before issuing the final report. The deadline for investigation has been extended to January 12, 2018.
The import of such fertilizers has risen sharply since early 2016, which is said to have affected local production and caused heavy losses to domestic fertilizer producers.
Vietnam spent some US$1.1 billion to import 4.15 million tons of fertilizer last year and the main import market was China.