The Department of Trade Defense, Ministry of Industry and Trade said that according to statistics from the World Trade Organization (WTO), the United States is currently the world's leading country in investigating and applying trade defense measures and is also the country that investigates and applies the most trade defense measures to Vietnamese export goods.

To date, the United States has investigated 64 cases out of a total of 253 foreign investigations into Vietnam (accounting for 25%), including: 28 anti-dumping cases, 11 anti-subsidy cases, 22 anti-trade defense tax evasion cases and 3 self-defense cases.

The United States is the country that investigates and applies the most trade defense measures against Vietnamese export goods. Photo: Hoa Phat

Accordingly, the Department of Trade Defense said that the US's failure to recognize Vietnam as a market economy could affect the results of anti-dumping and anti-subsidy investigations.

In anti-dumping investigations, according to the Department of Trade Defense, because the United States has not recognized Vietnam as a market economy, the United States will use the costs of a third country (substitute country) to calculate the normal value in anti-dumping cases, causing the anti-dumping tax to increase, not reflecting the true state of our production and export.

Currently, the list of alternative countries for Vietnam is updated by the United States based on 2 criteria: Having an economic development level equivalent to Vietnam; having a significant number of manufacturers of products similar to the investigated product. If there is more than one country that meets both of the above requirements, the United States can choose a single country with the most available and quality data. The latest list updated in August 2023 includes 6 countries: Indonesia, Jordan, Egypt, Philippines, Morocco, Sri Lanka.

According to the new regulation on trade defense investigations officially effective from April 24, 2024 of the United States, when selecting a replacement country to calculate anti-dumping margins for non-market economies (including Vietnam), the US Department of Commerce will exclude and not select countries that widely subsidize exports / have subsidies or are subject to anti-dumping duties related to surrogate value / do not enforce and have weak, ineffective enforcement mechanisms on issues related to intellectual property rights, human rights, labor, and the environment because the surrogate value, benchmark or production costs in these countries are likely to be distorted or inconsistent with market principles.

In the event that no suitable alternative value is proposed from a country with a market economy of a similar level of development to Vietnam, the US Department of Commerce will use the alternative value of a country with a market economy of a unequal level of development.

In addition, this provision also allows that in the event that there is no suitable alternative value proposal from a country that is a significant producer of goods comparable to the investigated goods, the US Department of Commerce may use the alternative value of a country with a market economy that is not a significant producer of goods comparable to the investigated goods. This may lead to the US Department of Commerce choosing a substitute country that is more developed than Vietnam or is not representative for comparison, increasing the alternative value, pushing the dumping margin higher.

The Trade Defense Department said that according to US regulations, relevant parties have the right to submit comments on the selection of alternative countries and values ​​within 30 days before the US Department of Commerce issues a preliminary conclusion of the case (within 140 days from the date of initiation of the investigation - subject to extension). Parties can also propose alternative countries not on the above list for the US Department of Commerce to consider. This is an opportunity for investigated enterprises to propose alternative countries and data sources suitable for their production costs. In fact, many Vietnamese enterprises exporting tra - basa fish, warm water shrimp, tires, etc. have used this right to propose suitable alternative countries and thereby enjoy a 0% anti-dumping tax rate.

In anti-subsidy investigations, the United States also uses the benchmark of the surrogate country when calculating the subsidy margin, causing the anti-subsidy tax rate to increase. For example, the United States can use the loan interest rate or land rent of another country as a benchmark (usually at a high level) to compare with the loan interest rate or land rent of Vietnamese enterprises (usually at a lower level) to calculate the benefits that enterprises receive, causing the subsidy margin to be pushed up.

Therefore, to get the best results, Vietnamese export enterprises when being investigated by the United States for applying trade defense measures should note:

Proactively develop alternative country proposals (on or off the US Department of Commerce List) and appropriate alternative data sources for each cost category as soon as information about the case becomes available.

In addition, enterprises can proactively contact and consult information from associations, enterprises in the industry, foreign or international associations related to the investigated products, importers; consult the experience of associations and enterprises with low tax rates to search and identify alternative countries and data sources that are publicly available, in accordance with the criteria of the US Department of Commerce, appropriate to the investigation stage; build arguments and submit proposals for alternative countries and values ​​within the prescribed time; fully cooperate with the US investigation agency throughout the course of the case.