Monday, September 23 2019

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Businesses told to diversify after steel tariff hike

Update: July, 05/2019 - 08:05

Components are made at the Cát Thái Manufacturing & Trading Co Ltd in HCM City. Vietnamese enterprises are urged to draw up appropriate business strategies to use domestic raw materials or other sources. — VNA/VNS Photo An Hiếu

HÀ NỘI — Vietnamese enterprises are advised to build better business strategies after the US slapped huge tariffs on Vietnamese steel.

On Tuesday, the US Department of Commerce (DOC) announced it would impose duties of up to 456 per cent on the Vietnamese cold-rolled steel (CRS) and corrosion-resistant steel (CORE) export products made from materials imported from Chinese Taiwan and South Korea.

This could have a huge detrimental effect on Viet Nam's steel industry which as of April this year, exported nearly 2.8 million tonnes of steel, up 13.7% against the same period in 2018

Foreign Ministry spokesperson Lê Thị Thu Hằng told reporters on Thursday that businesses should shift to using domestic raw materials or other sources as importing countries, including the US, may issue stricter regulations on trade defence. .

Hằng said relevant agencies would exchange information with the US to protect legitimate rights and interests of enterprises, in accordance with the laws of Việt Nam and the World Trade Organisation (WTO), and prevent fraudulent acts of origin. 

Minister of Industry and Trade Trần Tuấn Anh at the National Assembly cabinet on the same day said: "We import hot rolled steel from these places and there is a process of change. Previously, the US accepted this transformation process but now they think the process is negligible. The tax therefore must be increased, up to more than 400 per cent,” Anh said.

He said authorities are planning to co-ordinate for the evaluation of products imported from other countries.

Agencies would work with partners to provide guidance for businesses, avoiding products from Việt Nam to be subject to commercial sanctions, he said.

In the other direction, the issuance of certificates of origin would be re-tightened for many products, he added.

Regulation on ‘Made in Việt Nam’ products

The Ministry of Industry and Trade (MoIT) has proposed the Government promulgate regulations on Vietnamese goods and ‘Made in Việt Nam’ products as there are no specific rules on the issue.

Deputy Minister of Industry and Trade Đỗ Thắng Hải made the statement at a press briefing held in Hà Nội on Thursday, answering questions relating to potential wrongdoings at Asanzo Việt Nam Electronics JSC. The firm has reportedly been selling finished products imported from China labelled as “Made in Việt Nam” goods.

He said the draft would collect opinions from ministries and people to prevent trade fraud, adding that the ministry has been actively co-ordinating with the Ministry of Finance (MoF) to clarify the issue.

“Prime Minister Nguyễn Xuân Phúc assigned the MoF to act as the focal point to co-ordinate with concerned ministries and agencies, including the MoIT, to inspect and report to the Government. Currently, the two ministries have co-operated in a positive way to implement the direction of the PM,” he said.

Sharing the opinion, Trần Thanh Hải, deputy head of the ministry’s Import-Export Department, said in Việt Nam the labelling of goods origin is carried out in accordance with the Government Decree 43/2017. Accordingly, the regulation requires all goods to be labelled. On that label, there is some mandatory information about the name of producers, individuals or organisations and origin of goods.

The Decree also stipulates that enterprises, organisations and individuals circulating goods must determine the information to put on their labels and take responsibility for recording the origin of goods.

However, he said Việt Nam has participated in various free trade agreements (FTAs). These agreements contain provisions on goods that enjoy tariff preferences but do not yet have provisions applicable to brands in the domestic market.

He gave an example that Việt Nam is participating in the ASEAN free trade area. The condition for granting a certificate of origin is that 40 per cent of the content of a product is produced in ASEAN.

“This means that a product can have 10 per cent of Thailand, 10 per cent of Indonesia, 15 per cent of Malaysia and only 5 per cent of Việt Nam. Thus, we still have not had a clear regulation on how to determine the ratio of goods to be considered Vietnamese goods,” he said.

He added that the ministry would publish the official draft on its websites to collect ideas in the future. — VNS

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