Although the development, production and market mechanisms of many industries, fields and products in Vietnam have met the market conditions and criteria: diverse supply sources, the market determines the selling price, freedom Competition between sellers and buyers and the Government and management agencies do not interfere with the price mechanism, cost support, taxes, etc.
The fact that some economies have not recognized Vietnam as a market economy causes Vietnamese products to suffer “losses” in trade defense lawsuits (Photo: VASEP).
According to experts on trade defense (PVTM) of the Vietnam Confederation of Commerce and Industry (VCCI), the factors of recognition of a full market economy are of great significance in the review of legal principles. application for State intervention in the establishment of production costs, reduction of product prices, leading to unfair competition between exported goods and import markets, causing damage to the production of importing countries.
“The WTO’s framework of mechanisms and regulations prevents the Government from giving tax incentives and financial support to the country’s manufacturing and export industries to damage, weaken and manipulate the importing country’s market.” If the plaintiff, during the review process, has elements of support and subsidies from the Government, the terms and conditions will immediately be triggered and will be a major disadvantage for businesses in the industry, or even for that entire sector in the industry. many years and can only be removed when the plaintiff reviews it a second time, which usually happens periodically every year,” said this expert.
In fact, currently, in most industries and fields in Vietnam, the Government does not provide subsidies or tax supports that the WTO does not allow. However, because some large countries, including the United States, have not recognized full market status for Vietnam in trade remedy lawsuits, when one or several cases arise, the plaintiff takes advantage of this factor to causing disadvantages to the review and investigation process for Vietnam’s product industry.
“Usually reviews will take place over a fairly long period of time, depending on the nature of the case, the level of litigation and the grounds. Enterprises need to have enough legal basis and documents proving the production process.” exports comply with market principles and do not receive intentional support from the Government. To do this, there needs to be a public and transparent accounting and cash flow to serve the investigation process. , review by the plaintiff. If the plaintiff finds one of the signs of subsidy, the tax bracket can be temporarily applied before making a final conclusion on the tax rate, which is detrimental to the business.” , the VCCI expert said.
By the end of September 2023, 72 countries have recognized Vietnam as a market economy, including large economies such as Canada, Australia, Japan, South Korea… Most recently, the United Kingdom has issued a letter Officially recognized Vietnam’s market regulations and accepted to consider Vietnam a market economy in trade remedy lawsuits. These are legitimate factors and positive signals, helping Vietnamese industries, fields and products have enough basis and evidence to face trade remedies lawsuits at the WTO or bilateral scale.
Currently, the US and EU are still in the process of considering Vietnam as a market economy and a full market economy. Vietnam’s two export markets worth tens of billions of dollars still set many criteria and have annual updates on the criteria to consider a market economy and a full market.
According to US regulations, the 6 criteria to consider whether an economy has a market or not are the degree of currency conversion; Negotiate salaries and wages between employees and employers; Level of foreign investment in economic activities; Issues of state ownership and private ownership; Extent of Government control over certain resources and prices; Other factors.
For the EU, there are 5 criteria to consider such as: the level of government influence in allocating resources and business decisions (Vietnam has done it, according to the EU’s assessment in 2015); There is no state intervention that distorts the daily operations of businesses; corporate governance, accounting and auditing; the existence and enforcement of certain legal regimes, respecting intellectual property rights, bankruptcy and competition, and judicial systems; financial sector.
