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(NHAN DAN ONLINE)Lately there have been numerous reports on foreign goods sold at suspiciously low prices in Vietnam, raising doubts that these imports are competing unfairly with Vietnamese products.
The most recent story concerns undersold frozen chicken legs. Although no official statistics have been published, a survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI) suggests that nearly one third of local enterprises believe foreign goods are being sold in Vietnam at prices lower than in their countries of origin.
This phenomenon is ubiquitous across every industry of the economy. The VCCI’s survey also shows that nearly 70% of domestic enterprises attribute cheap imported goods to foreign government-backed subsidy programmes and foreign exporters’ deliberate dumping to dominate the Vietnamese market.
Faced with the flooding of cheap goods from abroad, Vietnam could consider using trade defence instruments to protect the legitimate rights and interests of domestic businesses. Trade defence instruments, part of a national trade policy to protect domestic production against unfair competition, comes in three forms: anti-dumping, anti-subsidy and safeguard measures. If these measures are properly targeted, trade defence instruments will not run counter to trade liberalisation.
For years, trade defence instruments have been used by countries around the world to protect their enterprises against unfair competition from imported goods, but Vietnamese enterprises seem to pay no heed to these instruments. According to the VCCI, as of October 2015, more than ten years since the legal documents concerning trade defence were promulgated, Vietnam has used these instruments only four times, twice leading to safeguard actions. Meanwhile Vietnamese goods have been involved in 94 lawsuits, of which nearly half have culminated in Vietnamese products being subject to defence measures.
It is necessary to enhance the capacity of enterprises and trade associations that would like to seek trade defence measures, as well as amending and perfecting mechanisms related to this area. The first priority should be raising enterprises’ awareness of trade defence instruments by disseminating information through trade associations; incorporating more in-depth knowledge into media reports on trade defence; and improving the ways in which information is communicated. In addition, enterprises should include costs for building capacity on trade defence measures as part of their business strategies. At the same time, legal frameworks on trade defence instruments should be fine-tuned by updating and amending relevant laws in accordance with international commitments.
Vietnam’s global economic integration is deepening with the negotiation and signing of more and more trade pacts, particularly new-generation agreements and the formation of the ASEAN Economic Community at the end of 2015. Opening the domestic market for foreign goods is inevitable but it is also important to use trade defence instruments as a legal measure in line with international practices to protect domestic production and bring success to Vietnam’s economic integration process.
