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Businesses in VN told to diversify

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Components are made at the Cat Thai Manufacturing & Trading Co Ltd in Ho Chi Minh City. Vietnamese enterprises are urged to draw up appropriate business strategies to use domestic raw materials or other sources. AN HIEU/VIETNAM NEWS AGENCY/VIET NAM NEWS

Businesses in VN told to diversify

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

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

This could have a huge detrimental effect on Vietnam’s steel industry which as of April this year exported nearly 2.8 million tonnes of steel, up 13.7 per cent against the same period last year.

Foreign Ministry spokesperson Le Thi Thu Hang 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.

Hang said relevant agencies would exchange information with the US to protect legitimate rights and interests of enterprises, in accordance with the laws of Vietnam and the World Trade Organisation, and prevent fraudulent acts of origin.

At the National Assembly cabinet on the same day, Minister of Industry and Trade Tran Tuan Anh 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 coordinate for the evaluation of products imported from other countries.

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

‘Made in Vietnam’ regulation

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

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

Deputy Minister of Industry and Trade Do Thang Hai made the statement at a press briefing held in Hanoi on Thursday, answering questions relating to potential wrongdoings at Asanzo Vietnam Electronics JSC. The firm has reportedly been selling finished products imported from China labelled as “Made in Vietnam” goods.

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

“Prime Minister Nguyen Xuan Phuc assigned the MoF to act as the focal point to coordinate with concerned ministries and agencies, including the MoIT, to inspect and report to the government,” said Hai.

“Currently, the two ministries have cooperated in a positive way to implement the direction of the prime minister.”

Sharing the opinion, Tran Thanh Hai, deputy head of the ministry’s Import-Export Department, said in Vietnam the labelling of goods origin is carried out in accordance with 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 Vietnam has participated in various free trade agreements. 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 Vietnam 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 five per cent of Vietnam. 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. VIET NAM NEWS

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