Managing trade risks for exporters

(VOV) - International trade throws up a number of risks exporters must be better equipped to handle, said Nguyen Chi Mai head of the Vietnam Competition Authority (VCA) at a recent conference in Ho Chi Minh City.

The conference, addressing the trade risks for exporters, was sponsored by the World Trade Organisation's Affairs Consultation Centre in coordination with the Ministry of Industry and Trade's Competition Management Department and the HCM City Business Association.

Since 1994, VCA statistics show there have been 90 trade defence investigations on Vietnam exports, including 47 anti-dumping lawsuits. Markets which most often use trade protection tools include the US (20%) and the EU (15%), followed by India, Turkey, Brazil and Argentina, Mai said.

Complicated lawsuits

Trade defence lawsuits are costly and a waste of time.  An ounce of prevention is worth a pound of cure and businesses should work to implement policies and procedures aimed at preventing lawsuits from happening in the first place.

They should implement policies to insure they fully understand the importing countries' anti-dumping and anti-subsidy regulations and be diligent in staying abreast of the ever changing market conditions.

Most importantly they should invest heavily in technology to add value to their products. Adding value directly correlates to a reduction in anti-dumping lawsuits, Mai said.

But if a law suit is served on them, above all else they must respond promptly to protect their rights. 

managing trade risks for exporters hinh 0

Businesses should raise legal knowledge

Meanwhile the number of trade lawsuits demonstrate that local businesses have not paid sufficient attention to protect themselves while the markets continue to get more and more competitive.

Over the past 10 years, VCA has received complaints from 11 cases, conducted investigation on 3 cases and levied anti-dumping taxes in two situations.

In the coming time after a number of free trade agreements come into effect and a mass of imported products hit the domestic market, better protective measures would need to be put in place to protect the domestic market.

VCA official Nguyen Huu Truong Hung in turn said local businesses have not paid due attention to safeguard measures because they have not been fully aware of their role, and lacked adequate information.

The legal procedures to initiate or defend against a lawsuit are very complicated, requiring careful investment of businesses. Furthermore, local firms are often unable to obtain timely accurate information to demonstrate that foreign products are being dumped in the domestic market.

Thus, to use safeguard measures to deal with unhealthy competition, businesses should raise their legal knowledge, Hung added.

He cited as an example an anti-dumping lawsuit filed last May by two major stainless steel producers, Hanoi-based Inox Hoa Binh and the Republic of Korea's Posco VST, against imports from China, Taiwan, Malaysia, and Indonesia.

After a five-month investigation by VCA, cold rolled stainless steel imported from four countries was found to be subject to anti-dumping tariffs ranging from 6.45% to 30.73%.

Thus, if local firms had been more alert to the improprieties and drawn attention to the unhealthy competition sooner they would have been better off Hung concluded.