October 23, 2014
– The Government of Indonesia has imposed an anti-dumping tax on imports of Vietnamese cold rolled steel sheets without consulting the Government of Viet Nam.
The imposition of the tax from July 7, 2014 to July 7, 2017 has created difficulties for Vietnamese steel exporters. Vu Van Thanh, deputy general director of the Hoa Sen Group, explains the issue and suggests solutions in an interview with Cong thuong newspaper.
What are your opinions regarding this issue?
We are a steel sheet producer and exporter, and we are quite surprised about the Indonesian Government’s decision imposing an anti-dumping duty on Vietnamese steel sheets exported to Indonesia without consulting the Vietnamese Government.
I think that action is not in line with international regulations on trade defence measures which the World Trade Organisation (WTO) has issued. That will create a negative impact on exports of local steel sheet producers and exporters to Indonesia.
On the other hand, the anti-dumping tax rate is so high and accounts for 50 per cent of the selling price of Vietnamese cold rolled steel sheets in the Indonesian market. Therefore, it will reduce the competitive ability of Vietnamese steel sheets in the Indonesian market.
So, the legitimate rights and interests of Vietnamese enterprises, particularly steel exporters, were seriously violated because the imposition of anti-dumping tax is an important decision that affects numerous concerned parties that have absolutely not been consulted and given timely information on the duty under WTO regulations.
What petitions have domestic steel sheet producers and exporters filed regarding this issue?
During the investigation of the case beginning at the end of 2012, the Hoa Sen Group has co-operated closely with the Viet Nam Competition Authority (VCA) in answering the plaintiff’s allegations and the investigation reports of the Indonesian Trade Safeguard Committee (KPPI).
Viet Nam has also joined meetings which Indonesia organised to report on the investigation. However, Indonesia has ignored Viet Nam’s arguments and WTO rules in its unilateral decision to impose the tax.
Right after the decision was carried out, the Hoa Sen Group reported to the VCA and concerned state offices and ministries regarding the case and also asked the Indonesian Government to conduct consultations with the Vietnamese Government.
As a result, Indonesia had a consultation meeting with Vietnamese government representatives last August 20, but after that, Indonesia reaffirmed its decision to impose the duty.
So the group has sent letters to the Government and concerned offices and ministries, as well as the Viet Nam Chamber of Commerce and Industry and the Viet Nam Steel Association, proposing that Viet Nam refer the matter to trade dispute resolution bodies under WTO regulations. The VCA also sent a letter to KPPI regarding this matter.
After such strong protests against the anti-dumping duty, Indonesia has agreed to a meeting with Viet Nam to discuss these issues on October 27.
What can Viet Nam do to avoid this situation in the future?
Viet Nam should solve the problem through government-to-government meetings between the two countries. On the other hand, domestic steel sheet producers and exporters should co-operate with concerned offices and ministries in referring the matter to the WTO.
In a worst–case scenario where Indonesia decides to retain the tax, Viet Nam should refer the matter to the WTO, and I believe that Viet Nam will win this case.
If successful, domestic steel sheet producers and exporters should not pass on the duty to consumers because the rate is so high, and it will create a bad precedent for other countries with cases similar to that of Viet Nam.
(VNS)