Imports threaten local output
Joining free trade agreements should have boosted Vietnam's exports but the anticipated inflow of imports is posing a challenge to local production, urging the use of trade defence instruments.
However, a majority of Vietnamese businesses are still in the dark on trade defence instruments, a conference heard on December 16 by the Vietnam Competition Authority.
Nguyen Phuong Nam, the competition authority's deputy director, said during the rapid international integration process, applying trade defence instruments was a must to protect local production.
Although faced with numerous trade defence lawsuits, Vietnamese firms remained passive in using trade defence instruments even in the home market due to the lack of knowledge and limited capacity and resources, according to Nam.
He added that the lack of co-operation among firms in an industry made competitive pressure fiercer to a single firm.
Nam said Vietnam was among the countries which applied trade defence instruments modestly, damaging domestic production. "Not only enterprises, but government management agencies should also be blamed," Nam said at the conference.
Since the promulgation of the ordinance on trade defence instruments in 2004, Vietnam carried out only three safeguards and one anti-dumping case against imported products.
"Each time, while preparing for a trade defence lawsuit, we feel the intense pressure," Nam said.
To Thai Ninh from the Vietnam Competition Authority cited statistics showing that only 1.8% of surveyed firms said they had studied quite carefully about trade defence while 64% said they were unaware of it, and 16% said they had never heard of it.
Those figures sent alarm bells ringing within domestic firms amid the rapid integration with the anticipated rise in the use of trade defence instruments following liberalisation, in line with free trade agreement commitments, Ninh said.
Ninh urged firms to enhance their awareness of trade defence as well as be more active in using instruments to protect market shares.
Experts at the conference urged firms to join hands to deal with trade defence issues.
Anti-dumping, anti-subsidy and safeguards were trade defence instruments allowed by the World Trade Organisation to protect local production.