According to information from the Ministry of Industry and Trade of Vietnam, as of now, 72 countries and territories have recognized Vietnam as a market economy. This recognition serves as evidence of Vietnam’s remarkable development on the international stage through the acknowledgment of its allied nations.
One of the significant advantages of being recognized as a market economy lies in the field of trade remedy, particularly in imports and exports. When countries acknowledge Vietnam as a market economy and conduct trade remedy investigations on products originating from Vietnam, the calculation of dumping margins enjoys certain benefits.
Some major economies that have recognized Vietnam as a market economy include Canada, Australia, Japan, South Korea, and most recently, the United Kingdom. However, the United States, despite being an important trading partner of Vietnam, does not recognize Vietnam as a market economy. Since the first anti-dumping investigation initiated against Vietnam in 2002, the United States has considered Vietnam a non-market economy.
Recently, during the visit of the Prime Minister of Vietnam to the United States, a proposal was made to the U.S. to recognize Vietnam as a market economy based on trade volume, historical cooperation, and the recent upgrade of their relationship to a comprehensive strategic partnership.
The European Union (EU) also maintains its view of Vietnam as a non-market economy based on stringent criteria established by its member states.
Defining a Market Economy
A non-market economy refers to economies where the government holds a monopoly or near-monopoly over trade, and state intervention sets domestic prices. As a result, domestic and export prices of goods do not reflect objective market conditions but are influenced by government interference.
This can impact the operations of countries to which these goods are exported. The most significant manifestation of this disadvantage occurs when products are subjected to anti-dumping investigations, affecting the pricing of imported goods and the interests of domestic producers.
When classified as a non-market economy, the usual principles for calculating the value of goods may not be applied in trade remedy investigations. The investigating country may use a third country with similar exported products and economic conditions to calculate the normal value of the goods instead of relying on data provided by the investigated enterprises. This method often puts producers and exporters from non-market economies at a disadvantage.
In the future, if Vietnam is recognized as a market economy by important trading partners such as the United States, Vietnamese businesses will receive substantial support in trade remedy investigations, including countervailing duty investigations, anti-dumping investigations, and efforts to combat circumvention of trade remedy measures.
According to regulations, the U.S. Department of Commerce will decide whether to initiate a review of a country’s status as a market economy within 45 days and provide a conclusion within 270 days of receiving a valid request.