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Cutthroat trade moves hit
Vietnam
By Tran Dinh Thanh Lam
HO CHI MINH CITY - First it was Vietnam's rice,
then its footwear and catfish exports. Now, its gas
lighters have come under scrutiny by the country's
trading partners, a trend that shows how cutthroat trade
maneuvers can be under a free-market system.
The
latest trade issue that is keeping Vietnam's officials
busy is the upcoming visit this month of a European
Union (EU) investigating team to look into charges that
the country is dumping its exports of gas lighters to
the EU market.
Vietnamese Trade Ministry
officials believe they have a strong case. "The
complaint is not very accurate," one of them said, which
makes it easier to handle.
According to the
Trade Ministry, of the six Vietnamese businesses accused
by the EU of selling gas lighters at dumping prices,
five have never produced or exported these items and the
one firm that does export gas lighters to the EU has
only a small market share.
The EU probe comes
even as Vietnamese seafood exporters are still busy
answering US investigators' questions after an
anti-dumping complaint filed in June by American catfish
farmers.
The same problem fell on Vietnamese
footwear makers. The Canadian Association of Leather and
Shoes Makers recently accused them of joining their
colleagues in Hong Kong and Macau in dumping prices of
waterproof shoes in Canada.
"All these cases are
currently under investigation," said Nguyen Van Hoa, an
official at the Ministry of Trade. "We must prove that
our products have been exported at their real value, and
that their prices have no impact on the importer's
market."
Since communist Vietnam began opening
up its economy to free-market reforms in 1991-92, the
country has experienced eight anti-dumping cases,
including the three pending.
In 1994, Colombia
accused Vietnam of selling its rice at dumping prices.
Vietnam, a major rice exporter, won the case.
Four years later, the EU filed an anti-dumping
petition against Vietnamese monosodium glutamate and
won, marking the first and so far only such trade
dispute of its nature that Vietnam has lost. The entry
of the Vietnamese product was later taxed at 16.8
percent.
During the same year, the EU charged
Vietnamese footwear makers with undercutting export
prices. This time, it failed because of the small market
share held by Vietnam compared with that of China,
Indonesia and Thailand, and thus had no impact on the EU
market.
All these cases have taught Vietnamese
exporters an important lesson, officials and business
people say. They know they can win anti-dumping lawsuits
if they can prove that the exported items have been sold
at their real value and that there has been no state
intervention to make prices competitive.
The key
issue for Vietnam is to prove that its economy is
operating under free market rules. It is not yet a
member of the World Trade Organization (WTO), a fact
that some developed-country governments use to look
closely at Vietnam's trade practices - and, some say, to
keep its cheap products out.
The EU attache for
commerce to Vietnam, Maurizio Caldarone, says the EU has
only recognized ad hoc that Vietnam has a market
economy, which means the burden of proof is on its
businesses to prove that they are operating under a
free-market mechanism, and that they do not get state
subsidies.
"Vietnam will be recognized as having
a market economy when it becomes a World Trade
Organization member," Caldarone said.
However,
he noted that Vietnam has still had an easier time
compared with China, which is also a communist country
going down the free-market road and which joined the WTO
in December, and recently experienced 200 anti-dumping
cases.
Of the eight cases filed against Vietnam,
only one has been proved accurate.
"It will be
tough to prove that our market is operating under a
market mechanism as the issue is linked with other
political questions," said the Trade Ministry's Nguyen
Van Hoa. "China has not been recognized by the United
States as having a market economy, although the country
has already become a WTO member."
(Inter Press
Service)
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