A worker operates machines at the Hoa Phat Hai Duong Steelmill. (Photo: VNA)Hanoi (VNS/VNA) - International free tradeagreements such as the Comprehensive and Progressive Agreement forTrans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement(EVFTA) have opened up unprecedented opportunities for Vietnamese steelmakerswith the industry forecast to see robust growth.
Opportunities, however, will come with challenges, as thecountry’s steel exporters have found. A rise in trade protectionism in largemarkets such as the US and the EU is among the most difficult tasks Vietnamesesteelmakers must address.
For instance, the US Department of Commerce (DOC) has slappedduties of up to 456 percent on a number of steel products from Vietnamincluding corrosion-resistant steel and cold-rolled steel with Republic ofKorea or Taiwanese origin, which have allegedly circumvented US anti-dumpingand anti-subsidy duties, according to the department.
The DOC said it had observed a sharp increase in shipments ofcorrosion-resistant steel (332 percent) and cold-rolled steel (916 percent)from Vietnam from 2016-19 compared to previous years since the US startedimposing duties on RoK and Taiwanese steel products in December 2015 andFebruary 2016.
The heavy duties imposed by the US has seen Vietnamese steelexport to the world’s largest economy drop to just over 3.49 billion USD, a 9percent decrease from the same period last year.
Industry expert Nguyen Van Sua said the gloomy figure was aresult of US-China trade tensions as the US ramped up efforts to counter originfraud. Other countries are likely to take similar actions to protect their ownsteel industries.
“If we fail to fight off origin fraud among Vietnamesesteelmakers, our products will face even higher tariffs in the US andtraditional markets including ASEAN countries,” said Sua.
In addition, the price of Vietnamese steel products has beenon the decline during the last ten months of the year, fetching just over 648USD per tonne, an 11.4 percent drop compared to 2018.
This price drop, combined with rising protectionism andstricter scrutiny, may prove to be daunting challenges for Vietnamese firms toovercome in order to maintain and boost their exports.
A representative from Hoa Phat Group – one of the country’slargest steel producers – said origin fraud damages the country’s image andhurts Vietnamese steel’s ability to compete effectively in the long run as morecountries will likely put Vietnamese product on their watch-lists or imposehigher duties.
Chu Thang Chung, deputy head of the trade remedies authorityunder the Ministry of Industry and Trade, said only a handful number ofVietnamese steel makers have engaged in origin fraud. While yielding short-termbenefits for a few, it will cause significant financial damage to others tryingto meet stricter regulations in import markets.
The ministry said it will continue to support Vietnamesefirms to cope with trade protection measures. It also urged Vietnamese firms tobuy input materials from domestic firms to avoid over-reliance on outsidesources./.
VNA
