Take the Americans to the WTO court? Businesses vote ‘yes’
Le Van Quang, General Director of Minh Phu Seafood Company in Ca Mau province, said that he’s all for complaining against the US to the World Trade Organization (WTO). “Absolutely,” echos Nguyen Van Kich, Director of Cafatex in Hau Giang Province. “Vietnam should not give in to the US.”
“We follow the US laws when we export products to the US. However, they (the US) need to apply fair rules,” Kich told.
At issue is the ‘zeroing method’ of calculating dumping duties that is applied by the US when calculating dumping margins. The WTO, in previous cases initiated by India and Thailand, has ruled that the method is unreasonable.
Nguyen Thi Thu Trang, is Secretary of the Trade Remedies Council, a government body. She says the US insistence on using this method forces Vietnamese companies to bear antidumping duties of 4.13 to 25.75 percent. The tax rates imposed on different companies are different: Cafatex pays 4.26 percent, Minh Phu 1.6 percent, while others must pay 20 percent
Tran Thien Hai, Chairman of VASEP, said that it is difficult to reckon up the total amount of US ‘anti-dumping duties’ that Vietnamese companies have to pay every year when they export shrimp products to the US. He estimates that it may have reached $12 million in 2008, considering that Vietnam exported $400 million worth of shrimp products to the US and assuming an average antidumping tax rate of 3 percent.
If Vietnam takes its complaint to the WTO, and the case is settled according to precedents in cases brought by Thailand and India, the antidumping duty would be reduced to zero percent on Vietnamese companies that are ‘voluntary defendants.’ That’s why a lot of Vietnamese companies are eager to see the Government carry their complaint to the WTO. If Vietnam wins the case, Vietnam’s shrimp will have a stronger competitive position.
But, some worry, would bringing the to the WTO affect trade relations between Vietnam and the US? Hai of VASEP said some officials have voiced that concern to him. However, Hai insists, a lawsuit is quite a normal thing in business; it will in no way influence the trade relations between the two countries. In fact, the antidumping duty is a barrier set up at the behest of the US Shrimp Association, which aims to protect its shrimp producers.
Hai said that he has been told that the Ministry of Industry and Trade has asked the Government to agree to the joint proposal of VASEP and Vietnam Chamber of Commerce and Industry (VCCI) that it bring a complaint against the US to WTO.
Hai strongly believes Vietnam can win, and if it does, the US will have to discontinue using its zeroing calculation method on all related issues, not just on shrimp.
Kich, the Cafatex director, isn’t so sure. This matter dates from before Vietnam joined the WTO, he said, so the Thailand or India precedents may not be applicable. Even so, says Kich, Vietnam ought to bring the case to WTO to ‘create an echo’ in the global market.
Suppose the US retaliates by erecting other barriers to imports from Vietnam, Hai was asked. He replied that both the US and Vietnam have to obey the law. “If Vietnam does not bring the case to the WTO, its seafood industry will die,” Kich said.
Though some Vietnamese enterprises worry that the expense is big and the outcome uncertain, Hai is sure that the Government will not regret several tens thousands dollar to protect its businesses.
At VASEP, Hai doesn’t concern himself only with the American anti-dumping duties. He has advised Vietnamese enterprises to pay more attention to product quality and safety. He has also advised members to boost exports to Japan, where most of Vietnam’s exports enter duty-free thanks to the Vietnam-Japan Partnership Agreement.
