Tiếng Việt
中文 (中国)
Currently, the United States Department of Commerce is considering recognizing 11 countries as market economies, including Belarus, Georgia, Kyrgyzstan, China, Armenia, Azerbaijan, Moldova, Tajikistan, Uzbekistan, Vietnam, and Turkmenistan. Understanding the method by which the United States confirms market economy status would be beneficial for Vietnam, providing a basis for the country to make necessary changes corresponding to the recognition criteria of the United States.
Some countries have transitioned from non-market economies to market economies in recent years, including Poland (1993), Russia (2002), and Ukraine (2006).
For a country to be considered a market economy, its government must formally request the United States or receive support from the petitioner in the US anti-dumping investigation that the country has a market economy. The Department of Commerce must conduct an investigation and consider six main factors:
- The extent of the country’s currency conversion.
- The degree of freedom in determining wages through negotiation.
- The ability for foreign companies to form joint ventures or invest.
- Government control over production materials.
- Government control over resource allocation and decisions regarding prices and output of enterprises.
- Other factors deemed appropriate by the managing authority.
Additionally, the Department of Commerce may determine that certain industries operate under market conditions while still applying the non-market economy evaluation method to other industries.
The last time the US Department of Commerce assessed the status of an economy with significant similarities to Vietnam, China, was in October 2017. The Department of Commerce concluded that China remains a non-market economy due to “the role of the state in the economy and the state’s relationship with the market and private sector leading to fundamental distortions in the Chinese economy.” Therefore, the Department of Commerce continues not to use prices and costs in China to analyze anti-dumping behavior.
The World Trade Organization’s Anti-Dumping Agreement (ADA) requires member countries to use cost and price data verified by investigated companies to calculate margins and anti-dumping duties.
However, the ADA also allows member countries to use alternative methods, including using substitute data from third countries in specific cases. Some countries, particularly the United States, have applied this method to investigated companies from non-market economies such as China. This has resulted in higher anti-dumping duties on imports from China compared to other countries considered to have market economies.
Under US law, a non-market economy can be any foreign country that the US Department of Commerce deems not to “operate on market principles regarding cost or prices, causing the sale of goods in that country not to reflect the fair value of the goods.”
Evaluating non-market economies is crucial because using a substitute country to construct the “normal value” of products in an anti-dumping investigation often leads to applying higher anti-dumping duties than would occur using price and cost data from the investigated producer/exporter. In anti-dumping investigations of non-market economies, the Department of Commerce assumes that there is no market mechanism to determine prices and costs for the investigated products and applies a nationwide anti-dumping duty to all imported goods except for companies that can demonstrate that they operate without government control both in fact and in law (they may receive a separate anti-dumping duty).
For the nationwide anti-dumping duty, the Department of Commerce will identify the market economy closest to the non-market economy under review based on the World Bank’s assessments of gross national income at purchasing power parity.
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