The Vietnam Competition Authority (VCAD) of the Ministry of Industry and Trade (MOIT) of the Socialist Republic of Vietnam has issued a preliminary report (in Vietnamese only) dated October 30, 2009, in its safeguard investigation of imported float glass products. Although the Ordinance permitting safeguard measures was enacted in 2002, and those for anti-dumping and countervailing duty measures followed in 2004, Vietnam, which became a member of the World Trade Organization on January 11, 2007, has not previously conducted a trade remedy case.

As Vietnam’s first trade remedy case, the 34-page preliminary report offers an interesting preview of how Vietnam will administer its WTO-based trade remedy laws. In particular, it will be interesting to see how issues other than injury (e.g., choice of remedy and related analyses) will be addressed in the final determination. It will also be interesting to see how thoroughly VCAD addresses the many arguments raised so far by the foreign exporters and other respondents. In its preliminary report, VCAD seemed hesitant to address such points squarely.

VCAD’s Preliminary Report

According to the July 1, 2009, initiation notice, the products at issue are imported from Indonesia, China, Thailand, the Philippines, Japan, Chinese Taipei, Singapore, Malaysia, Korea, India, the United States, Hong Kong, Switzerland, and Australia. In its petition, the domestic industry in Vietnam had requested the imposition of a 40-percent tariff as a provisional safeguard measure. VCAD did not address this request in its preliminary report.

The investigation will nonetheless continue, with a final determination expected on or before January 1, 2010. In its final determination, VCAD will presumably address the domestic industry’s request for a definitive measure in the form of an absolute tariff equal to US$ 0.6/m² on all imports into Vietnam of float glass entered under HT Codes 7005.29.90.00 and 7005.21.90.00, except for those from countries with de minimis imports.

Interested parties have until November 16, 2009, to submit written comments to VCAD on the preliminary report. In addition, the MOIT will hold a “consulting conference” on November 20, 2009, at which time interested parties may present oral arguments.

Under Vietnamese law and regulations, safeguard measures may be imposed on imported goods only when the following conditions are met: (i) the volume, quantity or value of imported goods suddenly increases, either absolutely or relatively, as compared with the volume, quantity or value of domestic like or directly competitive products, and (ii) the increase in the volume, quantity or value of imported goods causes or threatens to cause serious injury to the domestic industry. Definitive safeguard measures may take the form of a new tariff, an import quota, or any other measure stipulated to by the government. Tariffs, however, are the only provisional measure permitted.

VCAD based its preliminary report on three key findings: (i) that the importation of both clear and tinted, non-steel core float glass products increased, in both absolute and relative terms, during the period of investigation; (ii) that there was serious injury to the domestic industry, including a decrease in market share, output, and sales volume, and an increase in inventory, especially in 2008 and in the first quarter of 2009, and (iii) that the increase in subject imports is the primary cause of the injury to the domestic industry.

For more information on this case, please contact Duane Layton in Washington, DC, at +1 202 263 3811 or Matthew McConkey in Vietnam at +84 939 520 795.

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