"Hot" story of trade defense

In just a short period of time, a series of cases related to trade defense against the steel manufacturing industry have occurred. Accordingly, on June 14, 2024, the Ministry of Industry and Trade also issued Decision No. 1535/QD-BCT on the investigation and application of anti-dumping measures against some galvanized steel products originating from China and Korea.

On the same day, June 14, 2024, the Ministry of Industry and Trade also issued a notice on the receipt of a complete and valid dossier requesting an investigation to apply anti-dumping measures on hot-rolled steel products (HRC) from India and China.

Previously, on March 19, 2024, the Department of Trade Remedies (Investigation Agency) received the dossiers of companies representing the domestic manufacturing industry (Requesting Parties) - including Hoa Phat Group (HPG) and Formosa Ha Tinh Steel Corporation, requesting an investigation to apply anti-dumping measures on hot-rolled steel products from India and China.

Currently, the Ministry of Industry and Trade is conducting a final review of the application of anti-dumping measures on cold-rolled stainless steel products (AD01) and color-coated steel products (AD04) to assess the effectiveness of the measures as well as the possibility of extending the measures for another 5 years.

On the other hand, Vietnamese steel is also a product subject to trade defense measures from many countries. By the end of May 2024, of the total 252 foreign trade defense investigations with Vietnam, about 30% of the cases involved steel products. The investigated steel products are quite diverse, including galvanized steel, cold-rolled stainless steel, color-coated steel, steel pipes, steel hangers, steel nails, etc. These lawsuits mostly occurred in Vietnam's major steel export markets such as the United States, EU, Australia, Malaysia, Indonesia, etc.

At the recent Talkshow “Protecting steel manufacturing enterprises in a pincer situation”, Dr. Nguyen Thi Thu Trang, Director of the WTO and Integration Center (VCCI), said that if only counting the WTO group, steel is also the group that is subject to the most trade defense measures. According to the WTO, from 1995 to 2023, there have been 2,123 lawsuits only on dumping, not including other trade defense lawsuits such as anti-subsidy or self-defense. Notably, in the past 5 years, from 2019 to present, the total number of anti-dumping cases on steel accounts for nearly 49% of the cases for all 30 years.

In Vietnam alone, 12 out of 28 trade defense cases have been against steel products, accounting for about 46% of the total trade defense cases ever conducted against all types of products in Vietnam so far. Meanwhile, countries have launched 73 trade defense cases against Vietnamese steel exports. This shows that countries have applied many trade defense measures to protect their markets. There are cases such as with Vietnamese basa fish or shrimp, where countries have applied anti-dumping measures for more than 20 years.

“It is very difficult to determine whether Vietnam’s trade defense measures are sufficient or not. In a context where the risk of unfair import competition is much higher for the steel industry than for other industries ,” Ms. Trang commented.

Domestic steel production (Illustration photo)

How is the quality of Vietnam's defense?

In general assessment of the quality of Vietnam's trade defense measures, Ms. Trang commented that in most trade defense cases, businesses filing lawsuits requesting the application of trade defense measures, especially anti-dumping measures, have been well prepared, with tools and evidence that meet legal requirements.

“ Through our monitoring, all trade defense cases against steel have not been refused to apply trade measures. The extent of application of trade defense measures, the tax rate and the duration depend on each type. This is based on the fact that the imported products being sued for applying trade defense measures, the level of unfair competition, the level of dumping, the level of damage to the domestic manufacturing industry will have corresponding measures. Up to now, we have not received feedback from partners or other members of the WTO about whether Vietnam has not applied correctly or has not ensured the requirements of the WTO,” said Ms. Trang.

According to Mr. Pham Cong Thao, Deputy General Director of Vietnam Steel Corporation, Vietnamese steel enterprises are currently facing many difficulties, especially under great pressure from imported steel. Vietnam imported up to 14 million tons of steel in 2023. Of which, there are products that Vietnamese enterprises have fully met. Currently, commitments under WTO agreements are gradually decreasing, tariff barriers are also gradually decreasing, so steel products have increased penetration into the Vietnamese market.

“ Recently, the State has also had support policies for the steel industry. Especially policies on trade defense. This defense comes from too much pressure on imports. In the past, we have also had a number of trade defense measures such as steel billets, construction steel, stainless steel, color-coated corrugated iron... Recently, businesses have also raised the issue of applying trade defense to some new products and continuing to maintain trade defense for some products such as stainless steel", Mr. Thao said and affirmed that to protect domestic production, applying trade defense measures is good for specific cases.

According to steel manufacturing enterprises, the development of Vietnam's young steel industry cannot be without the support of the State in terms of general overall policies, as well as technical measures and barriers, such as trade defense measures, technical standards, or some other barriers to deal with specific challenges facing the steel industry.

Therefore, the policy of protecting the domestic industry is extremely necessary for an important industry such as the steel industry. The steel industry, as an industry that creates the “bread of industry”, needs the support and protection of the State to be able to develop sustainably, contributing to the development of a self-reliant economy of Vietnam. At the same time, this protection must be long-term to have enough time for the young industry to grow strong enough to compete with other steel powers in the region.

Regarding this issue, in the latest report on industrial production and trade activities, the Ministry of Industry and Trade said that the work of initiating lawsuits, investigating and applying trade defense measures continues to be promoted, re-establishing a fair competitive environment for domestic manufacturing industries. In fact, recently, imported goods have shown signs of dumping or being subsidized, causing serious damage to a number of manufacturing industries, most notably the steel industry.

To date, the Ministry of Industry and Trade has initiated investigations into 28 trade defense cases and applied 22 measures to imported goods.

According to Mr. Chu Thang Trung - Deputy Director of the Department of Trade Defense (Ministry of Industry and Trade), the trade defense measures against imported goods applied in the past have protected domestic production industries and jobs of hundreds of thousands of workers. Thanks to the application of reasonable trade defense measures, in accordance with international commitments, domestic production industries are protected from unfair competition, thereby creating conditions for development, creating more jobs and added value for the economy.

From a consumer perspective, long-term trade defense measures help the economy not to be completely dependent on imports, bringing stability and better resilience to external impacts and shocks.