Trade remedies application should harmonise businesses’ interests

Hanoi,(VNA) – Although trade remedies are necessary amid the strong liberisation of trade, the problem is how to ensure domestic steel producers’ interests while applying these tools, many insiders have said. 

Data from the Vietnam Steel Association (VSA) shows that Vietnam turned out nearly 15 million tonnes of steel products in 2015, up 21.5 percent year on year – and sold almost 17.9 million tonnes (including imported products), up 26 percent annually. 

However, the steel industry faced 12 trade remedy and anti-dumping lawsuits in its export markets last year. It also witnessed an influx of imported steel, with over 13 million tonnes of steel products worth 9 billion USD, compared with 2.8 million tonnes of exported steel valued at 2 billion USD. 

With export destinations to be expanded in 2016, Vietnam ’s steel industry will have more opportunities to ship its products overseas and reach its target growth rate of 15 to 20 percent. 

Nguyen Phuong Nam, Deputy Director General of the Ministry of Industry and Trade’s Vietnam Competition Authority, pointed out that when Vietnam boosts exports, its importing countries will consider that a threat to their domestic industries and thus enhance trade remedies. Even some ASEAN nations like Malaysia , Thailand and Indonesia have launched trade remedy lawsuits against Vietnam . 

He said that although Vietnamese businesses are not strong and experienced enough, they are still capable of coping with trade remedies. Enterprises should cooperate with foreign agencies and be patient when the agencies consider imposing trade remedies, or else these remedies will be levied immediately. 

VSA Chairman Ho Nghia Dung also urged steel firms to gear up their personnel and data for possible lawsuits they will face or launch. 

He added that a sudden and abnormal surge in billet and long steel product imports recently has seriously damaged domestic steel industry. Many companies have requested that the competition authority use trade remedies at a proposed tax rate of 45 percent on steel billets and 33 percent on long steel products. 

However, some steel companies said trade remedy lawsuits will impact their own benefits. 

Le Minh Hai, Chairman of the Board of Directors of the Vietnam – Germany Steel Pipe Joint Stock Company, said he supports trade remedies when local billet factories are able to ensure sufficient billet supplies. 

In reality, domestic billet output is not enough to meet production demand, and imported billets are cheaper, making it easier for his firm to buy foreign products. If trade remedies are applied, imported billet prices will rise, forcing Vietnamese companies to raise their products’ prices, which will affect buyers. 

He said that while trade remedies are essential and legitimate, the VSA and its members should discuss how to launch the remedies at appropriate levels and suitable points of time, since the interests of one company are also associated with those of other firms. 

The tax rate of over 40 percent on imported billets is too high. A rate of 15 to 16 percent should be more reasonable, compared with the current 9 percent, to ensure benefits for all enterprises, Hai suggested.-VNA