EU's increasing examination of anti-circumvention inquiriesCalled for by Powerful Bodies
Vietnamese Exporters Urged to Enhance Compliance as EU Intensifies Trade Defense Measures
Amidst rising global trade tensions, the European Union (EU) is stepping up its efforts to monitor imports and investigate suspected cases of dumping and circumvention more aggressively. This is particularly relevant for Vietnamese manufacturers and exporters, who have seen an increase in trade defense investigations.
The EU has been focusing on ensuring that existing trade defense measures are not undermined by unfair practices. In 2023, the EU initiated a record of 13 circumvention investigations, accounting for around 9% of all new EU trade defense investigations between 2015 and 2024.
Vietnam's exports to the EU in the first half of 2023 reached $27.3 billion, up 10 per cent over the same period last year. However, in the same period, Vietnam faced 14 new trade defense investigations initiated by nine countries. The US remains the most active country in initiating trade defense investigations against Vietnam, with six cases.
To comply with EU rules of origin and avoid trade defense investigations, Vietnamese manufacturers and exporters are advised to ensure strict transparency and documentation of product origin. This includes demonstrating that goods are manufactured within Vietnam or utilize sufficient regional materials per the detailed EU rules, avoiding circumvention tactics such as minor product modifications to evade tariffs or shifting production to third countries.
Key points for compliance include:
- Origin transparency: Maintain detailed records and certificates proving the genuine origin of products and the compliance with strict rules of origin under the EU-Vietnam Free Trade Agreement (EVFTA), which are based on EU GSP standards.
- Adherence to the rules of origin: These rules require either full production in Vietnam or substantial transformation within Vietnam or the EVFTA region, using domestic or qualifying regional materials to qualify for tariff preferences.
- Avoidance of circumvention tactics: Do not engage in shifting parts of production to third countries or making slight product changes solely to evade EU anti-dumping or anti-subsidy duties, as the EU monitors import data and investigates such attempts aggressively.
- Use of simplified self-certification: Registered exporters should use simplified self-certification procedures to prove origin efficiently and comply with EU customs requirements.
Vietnamese exporters can also leverage the legal frameworks and transparency improvements under EVFTA, which not only ensures rules of origin compliance but also strengthens intellectual property protection and fosters EU investment, supporting overall competitiveness and legal certainty in the EU market.
In summary, Vietnamese businesses should focus on robust origin documentation, genuine production within the EVFTA framework, transparent sourcing, and adherence to all detailed rules of origin criteria set by the EU to avoid trade defense investigations amid increasingly stringent EU enforcement. Monitoring evolving EU trade defense practices and strengthening cooperation with Vietnam's Trade Remedies Authority can also help manage risks.
[1] Trade Remedies Authority of Vietnam urges manufacturers and exporters to increase origin transparency. (2023). Retrieved from https://www.tradeauthority.gov.vn/news/trade-remedies-authority-of-vietnam-urges-manufacturers-and-exporters-to-increase-origin-transparency
[2] EU trade defense measures intensify amid global trade tensions. (2023). Retrieved from https://www.europarl.europa.eu/news/en/headlines/economy-and-jobs/20230526STO71003/eu-trade-defence-measures-intensify-amid-global-trade-tensions
[3] EU-Vietnam Free Trade Agreement: Rules of origin. (2020). Retrieved from https://trade.ec.europa.eu/doclib/docs/2016/november/tradoc_153951.pdf
[4] EVFTA: Boosting Vietnamese exports to the EU. (2020). Retrieved from https://www.vietnamlawmagazine.vn/evfta-boosting-vietnamese-exports-to-the-eu/
- To ensure compliance with EU trade defense measures and avoid potential trade investigations, Vietnamese exporters should adopt a culture of transparency, maintaining detailed records and certificates for their products' origin, adhering to the rules of origin under the EU-Vietnam Free Trade Agreement, and avoiding circumvention tactics.
- Following the intensification of EU trade defense measures in the face of global trade tensions, the finance and business sectors should consider the potential impact on Vietnamese exporters and start incorporating AI tools to track and analyze trade data, aiding in the identification of risks and opportunities in the markets.
- As the trade industry evolves, governments and businesses must collaborate, with the Trade Remedies Authority of Vietnam working hand-in-hand with Vietnamese manufacturers and exporters to develop better strategies for demonstrating product origin, adhering to rules of origin, and fostering a competitive edge within the EU market.
