15:33 | 25/11/2015 Trade
(VEN) - Vietnam has begun exporting steel in the last few years to reduce massive over-supply in the domestic market. However, this change has not been easy since Vietnamese businesses have permanently faced dumping accusations which are increasing as the country more deeply integrates into the world economy. For this reason, domestic businesses need to be more active to retaining markets.
Steel exports have been adversely affected by trade disputes
Four years and 21 trade dispute cases
According to the General Department of Customs, Vietnam exported 1.28 million tonnes of iron and steel worth US$1.85 million in the first nine months of this year, a 4.7 percent drop in volume and a 13.5 percent drop in revenue against a year ago.
The country has exported steel in recent years and several kinds of Vietnamese steel products have become popular globally such as coated iron sheets, alloy steel and steel pipes. However, steel exports have continuously faced difficulties due to dumping allegations.
According to the Vietnam Steel Association (VSA), Vietnam exported more than two million tonnes of iron and steel per year from 2010-2014 and faced 21 trade dispute cases including 11 antidumping lawsuits, 4 anti-subsidy lawsuits and 6 self-defense investigation cases.
VSA Deputy Chairman Nguyen Van Sua said that because the Vietnamese steel industry is young and not competitive, steel businesses mostly export their products to neighboring markets like ASEAN. However, a number of countries in the region currently apply antidumping law causing numerous difficulties for Vietnamese businesses. For example, Thailand has recently investigated three cases involving Vietnamese steel. Vietnamese businesses also lack experience in coping and dealing with trade disputes, and such cases have seriously affected exports.
Actively coping with disputes
Given increasing integration, Vietnamese goods are more able to expand to countries as a result of reduced export tariffs. However, businesses face trade barriers which foreign countries have set up to protect domestic producers. To cope with the situation, experts have recommended that businesses improve their understanding of trade barriers in order to actively cope with future disputes.
In addition, according to the Ministry of Industry and Trade’s Competition Management Department, businesses need to persify export markets, rather than focusing on single markets, while at the same time increasing the added value of their exports, considering that most trade cases focus on items with large volumes and low prices.
According to Deputy Minister of Industry and Trade Tran Tuan Anh, the Ministry of Industry and Trade has organized up to 20 training courses annually to teach businesses about trade lawsuits. However, businesses have proved to be quite ignorant. To improve the efficiency of this activity, the Ministry of Industry and Trade will work with business associations to improve training in order for businesses to actively cope with these types of legal disputes.