According to Nguyễn Thanh Hà, Chairman of SB Law Firm, this decision could have far-reaching consequences for Vietnam’s export enterprises and its ability to attract foreign direct investment (FDI).
JOURNALIST: - Sir, how do you evaluate the impact of non-market economy status?
Lawyer Nguyễn Thanh Hà: - This classification means that Vietnamese exports will continue to face significant challenges, including a heightened risk of trade defense lawsuits in the United States. These lawsuits could take the form of anti-dumping duties, anti-subsidy taxes, and anti-circumvention measures.
The implications of these potential legal battles are severe. Continuous investigations and the imposition of anti-dumping duties would disrupt the ability of Vietnamese businesses to plan their production and business activities effectively. They would also incur substantial legal costs and face time-consuming processes to explain their positions to U.S. authorities. Should these measures be applied, the resulting taxes would diminish the competitiveness of Vietnamese goods, potentially leading to a loss of market share in the U.S.
Moreover, small and medium-sized enterprises (SMEs) in Vietnam, which are already vulnerable, could face additional risks when entering the U.S. market. These risks include longer and more complicated export processes, higher compliance costs, and increased uncertainty in navigating the U.S. regulatory environment. All of these factors could negatively impact Vietnam's ability to attract FDI, as foreign investors may view the U.S. decision as indicative of broader challenges in Vietnam’s business environment.
- So, how should enterprises prepare to protect their rights in US trade remedy lawsuits?
- In light of these challenges, Vietnamese businesses must adopt a proactive approach to protect their interests in potential trade remedy lawsuits in the United States. Here are several key strategies that companies should consider to safeguard their operations and ensure they are well-prepared for any legal challenges.
First and foremost, businesses must improve their knowledge of international trade laws and regulations. This includes staying updated on the trade remedy laws of the World Trade Organization (WTO) and the specific legal framework of the United States, particularly regarding anti-dumping and anti-subsidy measures. By understanding the criteria and procedures involved, companies can better prepare the necessary documentation and evidence to defend themselves in potential lawsuits.
Second, the importance of establishing and nurturing relationships with relevant associations and stakeholders in the U.S. Active participation in these associations can provide businesses with valuable information, professional advice, and support when needed. Additionally, companies should engage in strategic communication efforts to raise international awareness of Vietnam's economic development and the positive contributions of Vietnamese businesses to the global market.
Third, transparency in financial management and adherence to international accounting standards are critical for businesses to avoid accusations of subsidies or dumping. Companies must maintain detailed and transparent records of all business activities, ensuring that they can provide clear evidence of their compliance with international norms.
Fourth, the development of contingency plans. Businesses should be ready to respond to potential trade remedy actions by exploring alternative markets, adjusting their business strategies, and optimizing their supply chains. This flexibility will allow them to mitigate the impact of any adverse decisions and continue operating effectively despite external pressures.
Finally, businesses must maintain regular communication with domestic agencies and representative bodies. By staying informed about export trends and the risks of trade remedy actions, companies can align their production and export strategies with the broader goals of Vietnam’s economic policy and reduce their vulnerability to legal challenges.
- Sir, what areas should Vietnam focus on and what improvements need to be made to secure market economy status recognition from the US in the future?
- The conversation also turned to what Vietnam must do to achieve recognition as a market economy by the United States. The U.S. decision is based on the perception that Vietnam still employs several administrative measures, such as interest rate ceilings, credit quotas, and price controls on essential goods like electricity, gasoline, and gold.
To address these concerns, Vietnam should focus on creating a more autonomous business environment, allowing enterprises greater freedom in their production and business activities. We must see the importance of studying the specific points raised by the U.S. and, where possible, developing a roadmap to address them. For issues that require further negotiation, we should organize dialogues with U.S. officials to resolve outstanding concerns and demonstrate Vietnam’s progress toward a market economy.
Several areas where Vietnam has already made significant strides, such as the attraction of major U.S. corporations like Apple, Google, and Intel, which have invested heavily in the country. These investments are a testament to Vietnam's favorable investment environment and its ability to meet the stringent standards of global businesses.
Furthermore, Vietnam has met several key U.S. criteria, including maintaining a flexible exchange rate, allowing free wage negotiations, and creating favorable conditions for foreign investment. These achievements should be highlighted in future negotiations with the U.S., as they underscore Vietnam’s commitment to economic reform and integration into the global market.
As Vietnam continues to navigate its complex trade relationship with the United States, the recent decision to maintain its non-market economy status serves as a stark reminder of the challenges that lie ahead. For Vietnamese businesses, the key to success in this environment will be a proactive approach—one that emphasizes legal preparedness, strategic relationships, financial transparency, and the ability to adapt to changing circumstances.
The road to achieving recognition as a market economy by the U.S. may be long and fraught with obstacles, but with careful planning and determined effort, Vietnam can continue to build on its progress and strengthen its position in the global economy. The next steps will be crucial in determining whether Vietnamese businesses can overcome these challenges and thrive in an increasingly competitive international landscape.
- Thank you very much.
