MARKET UPGRADE PUSH NOT OVER: Vietnam expressed its disappointment and is preparing documents to reapply, after the U.S. Department of Commerce determined the country would remain a non-market economy, in a blow to exporters operating in both countries. Vietnam’s Ministry of Industry and Trade “regrets that on August 2, 2024, the U.S. Department of Commerce concluded that Vietnam remains a non-market economy, despite significant improvements in Vietnam's economy in recent years,” according to a translated statement. Its non-market status ranks the country alongside Russia, China, and North Korea. Plans to reapply: According to the state-run Vietnamese news agency Vietnam+, the ministry is studying the U.S. report for the purpose of continuing the “supplementation and completion of the briefs and relevant dossiers to submit to the department to request another review to recognise the market economy status of Vietnam.” An upgrade could have made it more difficult to impose steeper anti-dumping duties on unfairly traded Vietnamese imports. One step back: Vietnam made a formal request last year to be reclassified as a market economy, triggering a 270-day Commerce Department investigation to consider the question. However, lawmakers on both sides of the aisle criticized the proposed move, arguing Vietnam had not made sufficient reforms and was too economically integrated with China. “Vietnam is not a market economy and today’s decision upholds that fact,” said Sen. Bill Cassidy (R-La.), in remarks sent to Morning Trade on Friday. “This is a win for Louisiana shrimpers and catfish farmers and American jobs.” Commerce rationale: “Despite Vietnam’s substantive reforms made over the past 20 years, the extensive government involvement in Vietnam’s economy distorts Vietnamese prices and costs and ultimately render them unusable for the purpose of calculating U.S. antidumping duties," Commerce said, as Doug reports. In a sign of intense interest in the decision, Commerce said the final verdict came after it received and reviewed more than 36,000 pages of comments from U.S. domestic industries, as well as the government of Vietnam during its investigation. Domestic groups said the decision not to upgrade Vietnam’s status would help prevent the country from being used as a conduit to help China evade trade restrictions from Washington. Kevin Dempsey, the president and chief executive officer of the American Iron and Steel Institute, said that granting “market economy status to Vietnam was not justified by the facts – given the significant role of state-owned enterprises in the Vietnamese economy, Vietnam’s role in circumventing U.S. trade law orders on goods from China and other countries,” as well as its currency manipulation and export restrictions. Thomas Beline, a senior official at the Committee to Support U.S. Trade Laws, which advocates for policies that support domestic industry, said: “Commerce’s action to maintain the NME status of Vietnam is both correct and a much-needed finding if we are to prevent China from avoiding existing tariffs by transshipping through Vietnam into the U.S.”
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