Tiếng Việt
中文 (中国)
With the announcement by UK Prime Minister Rishi Sunak about the completion of negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and thus formally becoming a member of the CPTPP in the near future, the UK will officially recognize Vietnam, a full-fledged member of the CPTPP, as a market economy in trade remedy investigations between the two countries.
The UK has been considering the possibility of joining the CPTPP since the beginning of 2018, aiming to boost exports post-Brexit. The UK government submitted its application to join the CPTPP in 2021. With the official confirmation from the member countries that the UK meets the requirements for CPTPP membership, the UK will be the first new member of the organization since the CPTPP was re-established and signed as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, replacing the TPP.
In addition to the UK, several other countries have applied and are currently under consideration for CPTPP membership, including Taiwan, Thailand, Colombia, South Korea, the Philippines, and Indonesia. These countries are engaged in negotiations with existing CPTPP member countries to make commitments and meet the conditions for accession. Joining the CPTPP will enhance economic relations for these countries with others in the region and the world, as they will benefit from free trade provisions and investment protection.
By recognizing Vietnam as a market economy, the UK will acknowledge that Vietnam’s industries operate under market economic conditions. Consequently, the UK will not apply any unfavorable provisions in trade remedy investigations concerning imported goods from Vietnam, treating Vietnam as a non-market economy, as was the case in the past.
The UK’s recognition of Vietnam as a market economy is especially crucial as Vietnam’s accession to the CPTPP does not grant immunity to either Vietnam or the UK from unilateral trade remedy investigations or investigations initiated by other CPTPP member countries.
For instance, in early July 2023, Vietnam initiated an anti-dumping investigation on pre-stressed steel strands imported from Malaysia, a CPTPP member country. In addition to Malaysia, Vietnam also initiated investigations on pre-stressed steel strands from Thailand and China.
When a country is not recognized as a market economy (i.e., a non-market economy), other countries may face challenges in determining costs and prices of goods originating from that country in anti-dumping investigations or in applying countervailing measures. Using costs and prices from a non-market economy like Vietnam may be considered unreasonable, primarily due to extensive government intervention in the economy.
However, it should be noted that the concept of a market/non-market economy has not been universally agreed upon by the WTO. Member countries can choose to recognize another country as a market/non-market economy, as the UK is about to recognize Vietnam as a market economy.
In the realm of trade remedy, if an exporting country like Vietnam is not considered a market economy, investigating countries, such as the UK, will use representative data from a third-country company considered a market economy as a substitute. Under this data determination method, Vietnam is often subject to higher anti-dumping margins than usual, resulting in much higher anti-dumping duties compared to countries recognized as market economies.
If recognized as a market economy, Vietnam will not face disadvantages in data determination during investigations and, as a result, will receive fair anti-dumping and countervailing duties consistent with the situation of the investigated production and export of products.
ASL LAW is the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.
