VietnamNet Bridge
By Tuoi Tre
July 23, 2009

VietNamNet Bridge – Vietnam is facing accusations that its exporters are ‘dumping’ tra, basa, shrimp and now even plastic bags into the world market. Here, talking with a Tuoi Tre reporter, Dr Hoang Phuoc Hiep, Director of the International Law Department at the Ministry of Justice, argues that rather than complain about anti-dumping actions, Vietnam’s exporters must learn to ‘dump smarter.’

Hiep said that the World Trade Organisation (WTO) does not prohibit dumping goods, that is, selling them in other countries below their cost of production. Enterprises of the US, EU, Japan and Canada, which are the four ‘key players’ in world trade, dump their products regularly. The difference is that they do it with clear goals and plans that assure them a profit.

It seems that Vietnamese businesses do not understand this. Vietnam has focused on criticizing anti-dumping tax decisions against our products. What our businesses should realize is that they can ‘dump’ in ways that will not trigger an antidumping investigation and imposition of penalties.

Tuoi Tre: What can Vietnamese businesses do to limit anti-dumping duties on their products?

Nguyen Phuoc Hiep: A made-in-Vietnam product that is sold in the EU will be considered as ‘dumped’ if the sale price of the product in the EU is lower than the production cost in Vietnam.

The first trigger for an investigation there is if an imported product holds seven percent or more of the market share in a specific member country. Therefore, if Vietnamese enterprises diversify their export markets, the possibility of facing an antidumping investigation will be low.

Second, even if our tra fish is sold in the US market at a little lower than the production cost in Vietnam, a ‘dumping value’ of up to two percent would be regarded as inconsiderable, and therefore the dumping would not be investigated.

In case Vietnam’s businesses must dump products, they should never sell at lower than 75 percent of the production cost. If anti-dumping duties of 25 percent are later imposed, the products will not lose competitiveness completely.

TT: A lot of Vietnamese enterprises do not know how to answer while they are investigated…

Hiep: That’s true. In the tra and basa [catfish] case, when American officials came to Vietnam to investigate, many enterprises could not answer their questions in the most advantageous way. We well know that tra and basa fish are being farmed in Vietnam at a high technical level. However, when they were asked about the water flow through fish cages, the average temperature in cages and about the impurities in the water, farmers could not answer. As the result, Vietnam’s fish is thought as ‘natural’ fish.

When an investigator asked why farmers could sell fish at such low prices, a farmer said that it was because all the children helped in the fish farming. As the result, the investigators proposed not only to impose anti-dumping duties but also to prohibit imports from Vietnam as being produced in violation of US laws against child labor.

TT: Some US congressmen have protested against an antidumping duty on Vietnam’s tra and basa for fear that Vietnam may retailate against beef imports from the US. Is it a ‘case of give and take’?

Hiep: WTO has five rules, but none include retaliation. If it is a matter of negotiations, sometimes if you break a commitment, you could be open to retaliation, but in the playing field of WTO, only those who violate regulations will be punished. Vietnam can start its own antidumping investigation of any import products but it must have enough evidence to prove the dumping.

TT: So, do we have to learn to live with antidumping lawsuits?

Hiep: In some years, China deals with 30-40 antidumping lawsuits. The US also dumps products. Raising antidumping lawsuits is a market measure that is used regularly. Vietnamese businesses have no other choice than getting used to the world’s rules

Vietnamese businesses should say ‘thank you’ to the US, because the publicity from the US anti-dumping lawsuits helped Vietnam’s tra and basa become better known. After that, we were able to export to many other markets. Instead of fearing the lawsuits, we should take initiative in dealing with the cases, using the tools of international trade to protect our interest and minimize losses.

Knowledge always brings benefit. Countries that understand the rules of world trade can take full advantage of their knowledge to protect their interests.

US chicken is very cheap, imported at less than $1 per kilo. When Vietnam established the rules on import of US chicken to Vietnam, we set a high phytosanitary standard on bacteria in the US chicken. The US then made a survey in Vietnam and proved that the Vietnamese-raised chicken have bacteria levels much higher than the level set for US chicken. Citing the principle of no discrimination on goods, the US successfully demanded modification of the standard.