The US Department of Commerce has announced it will officially review Vietnam’s status as a non-market economy for the purposes of anti-dumping measures, according to the Federal Register. This will be done in the context of anti-dumping measures applied to raw honey from Vietnam and is in response to an official letter from the Government of Vietnam from September 8.
Addressing the criteria for market economy status the Government of Vietnam argued (in this letter):
- The Vietnamese dong is transparently convertible into other foreign currencies based on market principles, fairness, and non-discrimination;
- That bargaining between labor and management on wage rates in Vietnam is free;
- Vietnam now possesses a clear legal framework to ensure employees’ basic rights;
- That no differences exist in how foreign and domestic investors are treated;
- That private sector development, state-owned enterprise restructuring and divestment, and land reform initiatives have all been taken;
- That as to the allocation of resources and the government’s role in price and output decisions… [it] does not possess significant control over these areas; and
- That several other reforms concerning transparency and bankruptcy have been taken.
The Department of Commerce found that the government’s letter had sufficient information to warrant a review of Vietnam’s non-market economy status.
Why it matters: Vietnam’s status as a non-market economy allows the US to use pricing from a comparable third country to determine the true cost of goods for anti-dumping investigations. This can lead to inaccurate assumptions being made and subsequently adverse outcomes for Vietnamese firms. A change to market economy status could also be seen as a vote of confidence in Vietnam’s market reforms over the past two decades.
The Department of Commerce’s official announcement: Raw Honey from the Socialist Republic of Vietnam: Initiation of Antidumping Duty Changed Circumstances Review