Fri. Jul 1st, 2022

VietNamNet Bridge – It is likely that the European Union (EU) will recognize Vietnam as a market economy when negotiations of the Vietnam-EU free trade agreement (FTA) end

EU, market economy, FTA, EU-MUTRAP

This will help Vietnamese enterprises face less unfavorable conditions in anti-dumping and anti-subsidy cases in this market.            

Speaking to the Daily on the sidelines of a seminar last week sponsored by the EU-funded Multilateral Trade Assistance Project (EU-MUTRAP), Deputy Prime Minister of Foreign Affairs Bui Thanh Son said that technically the EU had five criteria to recognize an economy as a market one. Currently, Vietnam has met one of the five and the EU is considering two to three other criteria for Vietnam, he added.

Therefore, there is a high likelihood that Vietnam’s market economy will be recognized by the EU after FTA negotiations end as at that time the two economies are basically equal, according to Son.

Under the commitments to the World Trade Organization (WTO), Vietnam agreed to have its economy considered as a non-market economy until 2018. As a result, with anti-dumping investigations, Vietnamese enterprises will be at a disadvantage as their actual costs will not count to calculate dumping margins and statistics of another country will be used.

Selecting a surrogate country will greatly affect the final taxes Vietnamese enterprises will have to pay. It is because new anti-dumping margins may be higher than normal ones, and anti-dumping taxes may be pushed up high.

According to the Trade Remedies Council under the Vietnam Chamber of Commerce and Industry (VCCI), since Vietnam’s first anti-dumping case lasting from 1998 until last May, Vietnam has faced 12 cases of this kind in the EU market.

Vietnam-EU FTA negotiations are estimated to finish later next year. With the EU’s ratification, the FTA may take effect in late 2016. The fourth FTA negotiation round ended last week in Belgium as both sides discussed detailed tax reductions.

Source: SGT

By vivian