Imports increased more than 9 times
The Ministry of Industry and Trade has reported to the Prime Minister on the application of trade remedies for sugar.
Accordingly, for sugarcane, since eliminating the tariff quota for ASEAN, the volume of sugarcane imported from Thailand into Vietnam has increased sharply, reaching 500,000 tons in the first five months of the year.
The sugar production for crop year 2018/2019 was nearly 1.2 million tons. In crop year 2019/2020, the sugar production of all Vietnam’s sugar producers has plummeted (it is projected at 800,000 tons).The damage is serious, meeting the criteria to start to implement trade defense investigations. Currently, the sugar industry is preparing and likely will submit soon an application for the Ministry of Industry and Trade to initiate an investigation and apply trade remedies for the sugar industry.
The Vietnam Sugar Association wants to apply safeguard measuresunder the provisions of the ASEAN protocol on special treatment of rice and sugar or under the Safeguard Agreement of the World Trade Organization (WTO).
The Ministry of Industry and Trade assessed that the application of safeguard measures by the sugar industry that is not effective, with an unstable legal basis, risk of being sued and required for compensation, shows that the sugar industry has not yet agreed. Some enterprises also want to maximize the absolute protection period.
According to the Ministry of Industry and Trade, Vietnam currently only opens its market to sugar imported from ASEAN, trade remedies should be applied to these countries.
In addition, Thailand is the main exporter; there is a lot of evidence that Thailand is subsidizing the sugar industry, leading to Thai sugar being sold at dumping price not only in the region but also globally.
The Ministry of Industry and Trade said the most effective and fairest solution is to initiate an investigation for cases of anti-dumping and anti-subsidy for Thai sugar.
Propose to initiate anti-dumping investigation
The Ministry of Industry and Trade proposed that it will initiate an investigation and apply anti-dumping and anti-subsidy measures to Thai sugar (proactively or based on proposals of the domestic manufacturing industry).
If the import of raw sugar from Thailand to Laos and Cambodia to refine and then export to Vietnam may incur as the sugar industry’s concern, anti-evasion measures will be applied.
Regarding this issue, the Vietnam Sugar Association said that some enterprises imported raw sugar from Thailand to Laos for refining and then export to Vietnam to evade trade remedies. With the special relationship of Vietnam-Laos, Vietnam-Cambodia, it is difficult for Vietnam to apply an anti-evasive tax to these activities.
Regarding proposals of the Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development basically agreed to initiate an investigation to apply anti-dumping and anti-subsidy measures on sugar imported from Thailand.
If after applying anti-dumping measures, the evasion by importing sugar from Laos and Cambodia incurs, the investigation and application of anti-evasion measures will be conducted.
The Ministry of Agriculture and Rural Development also proposed the Ministry of Industry and Trade to add practical data that fully meet the prescribed criteria to initiate the investigation.
In addition, the Ministry of Justice asked the Ministry of Industry and Trade to specify the legal basis, effectiveness and impact of each applicable measure through analysis of relevant provisions of the WTO’s agreementsassociated with specific details in sugarcane imports from Thailand to select the most effective measures.
Agreeing with the application of appropriate trade remedies, however, the Ministry of Foreign Affairs noted the consideration of applying appropriate trade remedies in the overall partnership between Vietnam and Laos, and Cambodiaand Thailand, as ASEAN’schairman, Vietnam is implementing some initiatives and proposing to call on ASEAN to open the market, maintain solidarity, and boost intra-regional trade and investment.
The Ministry of Foreign Affairs also proposed to consider the application period, and also have the prior exchanges with Thailand, Laos and Cambodia in case of deciding to apply trade remedies onsugar imported from these countries.
On November 13, 2019, the Ministry of Industry and Trade issued Circular 23/2019/TT-BTC eliminating the tariff quota on sugar imported from ASEAN from 2020.
On February 18, 2020, at the meeting of the Standing Government on removing difficulties for the sugar industry in the context of ASEAN integration, the Prime Minister assigned the Ministry of Industry and Trade to apply trade remedies in accordance with Vietnam’s laws and international commitments to protect domestic sugar production.
Currently, the Ministry of Industry and Trade is working with relevant ministries, sectors and the Vietnam Sugar Association to prepare documents to initiate an investigation and apply anti-dumping and anti-subsidy measures to Thai sugar based on the proposals of the domestic manufacturing industry or the Ministry of Industry and Trade will initiate.
By Uyen Nhu/Ngoc Loan
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