Addled by anti-dumping charges imposed by markets all over the world, Vietnam's steel manufacturers are once again lamenting a lack of protection from the government and local trade groups.
Hackles were first raised during an international trade defense conference in July of 2013 and have flared repeatedly since as Vietnamese products have suffered repeated anti-dumping penalties from the US, Brazil, Canada, and even ASEAN (Association of South East Asian Nations).
Hard times all over
Last month, the Canadian government launched an anti-dumping probe into Vietnamese oil pipes, a month after American commercial inspectors determined that the piles were being dumped onto the US market.
American trade officials imposed final dumping margins of 24.22 percent on SeAH Steel Vina Corporation and 111.47 percent on Hot Rolling Pipe Co., Ltd. Vietnam.
Vietnamese stainless steel pressure pipes and steel hangers were also hit with anti-dumping and countervailing duties in the US, which is currently looking into placing duties on Vietnamese steel nails.
In December 2012, when Indonesia began imposing anti-dumping taxes of between 13 and 36 percent on Vietnamese cold rolled steel, exporters turned to Brazil only to have the BRIC economy implement its own 35 percent anti-dumping duty starting late last year.
The amount of cold rolled steel exported to Brazil has dropped 15 percent since.
During the US probe, a representative from SeAH company said they've shifted focus back to Asia, but the picture here doesn't look much brighter.
The general director of one steel firm in Ho Chi Minh City said importers are throwing up trade barriers to protect their local industries, creating a big challenge for exporters.
Le Phuoc Vu, board chairman of leading steel roof producer Hoa Sen, said “extreme” protectionism moved the Indonesian government to impose tariffs on metal roofing imported from Vietnam.
Vu said Indonesia is undermining fair competition and subverting the spirit of free trade in the ASEAN bloc.
But the Vietnam Steel Association says they've received warnings from Malaysia and Thailand about plans to investigate Vietnamese coated-steel roofs as exports rise.
Insiders say such barriers have added to their sales troubles, since production began outpacing demand several years ago.
Even at home, they are having to compete with imports from China and products from foreign-invested firms.
"Live with it"
Dau Anh Tuan, head of the legislation division at Vietnam Chamber of Commerce and Industry, said that economic pressure created by the ASEAN Free Trade Area (AFTA) agreements has ironically prompted ASEAN countries to turn to anti-dumping measures to protect their own economies.
“You have to be well prepared to live with it,” Tuan said.
He said Vietnamese firms must keep close tabs on their competitors and invite them to negotiate when they sense the possibility of an anti-dumping probe.
Alternatively, they can better prepare themselves for competition by reforming their accounting systems and standardizing their databases so they have a chance of fighting the suits in court, he said.
Some say its time Vietnam's government agencies and trade associations step up their game.
Economist Hoang Tho Xuan, a former market official at the Ministry of Industry and Trade, said the government is the one that has to set up an alert system to help businesses time their entrance into certain markets carefully.
When they rush in too fast they risk spoking local competitors
into pursuing litigation
[The government] can think about protecting local firms by suing products coming from outside" -- economist Hoang Tho Xuan
The trade ministry's Vietnam Competition Authority operates a similar system, but only for ten leading exports to the EU, North America, Australia and Brazil.
Xuan said the government and industry associations are “vaguely” present in anti-dumping lawsuits against Vietnamese products.
They haven't closely cooperated with local manufacturers, he said.
Manufacturers, trade officials and associations should all be prepared for the worst case scenario when they enter a new market, he said. They have to be sure they can protect local firms in court.
“They can think about protecting local firms by suing exporters looking to tap our market,” he said.
Do Duy Thai, vice chairman of Vietnam Steel Association, suggested the same tactic.
Thai said the association itself is not sufficiently staffed to assist members in filing lawsuits abroad.
But he said the producers could use a lot of help from the government, which can initiate anti-dumping probes against exports to Vietnam.
“Vietnam's government should consider using trade defense measures more to protect local industries and save consumers from poor quality goods.
“Defending from home will be more effective than fighting abroad.”
Last December, in the only anti-dumping probe enacted since the country created relevant regulations in 2004, the Vietnam Competition Authority imposed tariffs of between 6.45 and 30.73 percent on stainless steel products imported from mainland China, Malaysia, Indonesia, and Taiwan.
The ruling came despite opposition from 18 local stainless steel processors, home appliance manufacturers and construction-materials producers, whose business plans relied on the low-cost stainless steel.
They said Hanoi-based Inox Hoa Binh and South Korea’s Posco VST, which filed the petition, were trying to monopolize the market and argued, unsuccessfully, that the petition was invalid as Posco is not a local firm in the first place.