Trade defense tools strengthened in CPTPP member countries

The principle to initiate such a lawsuit is an increase in imports.

Products with rapid and strong growth face risk

The trend of using trade defense tools increases in CPTPP member countries. Trade defense investigation cases not only increase in the number but also show more complicated development in the scale and more diverse in products. This poses many challenges for Vietnamese exporters, especially when the CPTPP agreement gradually enters a new implementation phase.

This matter is discussed by experts at the seminar on mitigating trade defence risks when increasing exports to CPTPP markets took place in Hanoi on November 27.

Mr. Bui Tuan Hoan, Head of the American Market Division, European - American Market Department (Ministry of Industry and Trade) said that since the CPTPP agreement took effect, Vietnam's exports to CPTPP member countries in the Americas region see strong growth. Four American countries participate in the CPTPP as Canada, Mexico, Peru and Chile. Except for Chile, the country has a bilateral FTA with Vietnam; Canada, Mexico and Peru are three markets that have signed FTA with Vietnam for the first time, so the tariff incentives under the CPTPP have a very positive impact on Vietnam's export activities to these markets.

“Since the CPTPP Agreement came into effect for Vietnam in January 2019, Vietnam's exports to CPTPP member countries in the Americas region have achieved strong growth. In 2021, exports to the four CPTPP countries in the region reached more than US$12 billion, especially Vietnam's trade surplus recorded US$10.4 billion. Exports to Canada increased by 75% to US$ 5.3 billion; to Mexico surged 105% to US$ 4.6 billion compared to the time before the agreement took effect. Similarly, exports to Peru also grew 85% to US$560 million, and exports to Chile rose 63% to US$ 1.7 billion.

Although the import and export turnover to Canada and Mexico-the market signed FTAs with Vietnam for the first time has increased significantly. However, trade defense cases have arisen in these markets. Mr. Phung Gia Duc, Deputy Head of the Trade Remedies Authority of Vietnam’s office for addressing foreign trade defence processing, said that when we have advantages and growth momentum from CPTPP and FTA, the Vietnam’s export value to new markets will be grown, thereby creating pressure on the domestic production industry of importing countries.

“For this reason, domestic industries of importing countries hope that the government will apply trade defense measures, especially trade defense, anti-dumping, and anti-subsidy and self-defense measures” Duc said and added that many CPTPP member countries are investigating trade defence cases involving Vietnamese products. Australia has initiated 18 cases, Canada and Malaysia over 10 cases, and Mexico three cases.

According to Duc, the principle to initiate such a lawsuit is an increase in imports. The importing country sees the surge in imports and puts pressure on the country and will take the first steps to investigate trade remedies.

“The most vulnerable and likely-to-be-investigated products are those with rapid and strong growth” Duc said. According to statistics from the Ministry of Industry and Trade, Vietnam's competitive advantage and backbone products such as seafood, wood and wooden products; basic metal products such as steel, aluminum; Textile-related products and some chemical products as traditional products, will continue to face lawsuits in the near future, even under the FTA and CPTPP market.

Raise awareness about trade remedies

Mr. Vu Van Phu, Vice President and General Secretary of the Vietnam Aluminum Association, said that aluminum firms have taken full advantage of trade agreements, especially the CPTPP Agreement. However, the enterprises are also exposed to many risks from those markets, especially trade defense measures.

The aluminum industry has achieved strong growth in recent years and aluminum firms have taken full advantage of benefits of trade agreements, especially the CPTPP agreement with markets such as Canada, Japan and America or Australia, South America...

“However, businesses also face many risks, especially trade defense measures. This is a huge risk for domestic export enterprises, especially aluminum firms,” Phu said and added that in 2023, the aluminum industry has faced three lawsuits by the US related to solar batteries originating from Vietnam; aluminum wire and cable originating from Vietnam and extruded aluminum products originating from 15 countries, including Vietnam.

According to the representative of the Vietnam Aluminum Association, the trade defense measures from other countries pose a great risk for domestic businesses. This trend greatly affects the exports, the export volume of the aluminum industry has been hit hard, when the US market accounts for 70 to 80% of the export output of the aluminum industry to international markets.

In the context that the CPTPP agreement will enter a deeper implementation phase, Mr. Phung Gia Duc said that businesses must raise awareness about trade remedies; mobilize human and material resources to update trade defense laws of export markets.

The Ministry of Industry and Trade will focus on disseminating knowledge about trade defense and will limit  subject groups in the following years.