According to the Ministry of Industry and Trade’s (MoIT) Competition Management Department, trade lawsuits arise from both export growth and economic slowdown.
Vietnam’s ongoing international economic integration means a proactive approach to these disputes is the best option.
The widespread financial and economic crisis has forced down the purchasing power of Vietnam’s key export markets. The fall has inspired some to adopt protective policies designed to shelter their domestic industries.
Vietnam’s key export commodities are employing relatively basic technology with little added value, such as seafood, garments and textiles, footwear, and wood and timber furniture.The success of these commodities is fuelled by low labour costs and the country’s natural advantages.
Price competition has increased the risk of anti-dumping lawsuits. A number of Vietnamese businesses have even engaged in contract price wars with each other, hurting exports more generally and creating more lawsuits.
The Competition Management Department says Vietnam’s World Trade Organisation (WTO) comittments mean it must accept its designation as a non-market economy until 2018. The designation disadvantages Vietnamese businesses, as foreign trade investigation agencies use third-hand cost and price statistics instead of using Vietnam’s own figures to calculate dumping margins.
These calculations often reveal anti-dumping ranges as much higher than the real prices of Vietnamese products, prompting domestic producers in importing countries to file legal challenges.
The MoIT admits that despite the great efforts of exporters and business support units, Vietnamese business capacity for coping with anti-dumping lawsuits remains limited.
Insufficient legal knowledge and anti-dumping regulation misunderstandings exacerbate the problem.
Anti-dumping lawsuits over shrimp, catfish, and leather & footwear exports indicate a rising trend threatening huge losses for Vietnamese businesses already under considerable stress.
The Department argues that apart from improving their competitiveness, domestic businesses should keep their basic anti-dumping knowledge as up to date as possible, standardise their accounts, and preserve all data as evidence that could refute any dumping allegations.
Particular attention should be given to market solutions, such as shifting competition by price to competition by quality and diversifying both products and markets.
Vietnam Chamber of Commerce and Industry Vice Chairman Hoang Van Dung warns the number of business disputes will only rise as Vietnam’s international integration proceeds. Arbitration-based dispute settlement is a better option.
Vietnam International Arbitration Centre (VIAC) Chairman Tran Huu Huynh says international arbitration permits disputing parties to specify the organisation serving as arbitrator, the place of arbitration, and the language in which arbitration is undertaken.
Both national and international laws can be employed to settle disputes. The final verdicts issued by arbitrators are recognised and valid in nearly 150 nations.
A concurring Competitive Management Department representative notes Japanese experiences demonstrate the importance of hiring qualified trade lawyers before initiating any legal action.