The United States Department of Commerce has said in a statement that Vietnam will remain a non-market economy for trade remedies purposes. This ends a months long review of Vietnam’s non-market economy status by the department which reached its findings on the back of “sustained and pervasive government influence” over Vietnam’s economy.
This means that in antidumping investigations involving Vietnam the ‘normal value’ of goods will continue to be determined using data from a comparable third country, and all producers of products under investigation will receive a single antidumping duty rate with the onus on individual companies to prove they deserve otherwise.
On the six criteria the department considered, the department found that:
“The government remains entrenched in many aspects of the Vietnamese economy.”
“The State Bank of Vietnam is still not independent and continues to intervene in the foreign exchange market to influence the value of the dong.”
“Labor unions remain dominated by the state-controlled Vietnam General Confederation of Labor, hindering genuine collective bargaining and ultimately creating conditions for suppressed wages and labor costs.”
“Although Vietnam has taken steps to make its overall foreign direct investment environment more attractive, market access barriers, regulatory transparency, and restrictions on corporate control and foreign ownership persist.”
“Vietnam’s economy is still characterized by significant state ownership and control over the means of production, most notably over companies and land.”
“The government continues to play a significant role over the pricing and allocation of credit in Vietnam. State-owned enterprises command a disproportionate amount of lending credit, among other structural advantages, despite the state-owned enterprises relatively low efficiency levels compared to their private-sector counterparts.”
“The government also uses state directed planning to communicate its objectives for the economy in terms of business outcomes and resource allocations, and pervasive government price controls continue to influence final prices of goods in Vietnam. Finally, the Communist Party of Vietnam’s influence over the judicial system and persistent challenges with corruption continue to undermine some of Vietnam’s reform initiatives.”
For background see: Unpacked: Vietnam’s Non-Market Economy Review