Those fears over origin fraud and tariff circumvention in its exports have pushed Vietnam to take significant action to counter growing concerns. This is particularly aimed at its mercantilist trade policy towards the United States. The U.S. recently established a trade remedy monitoring system to address origin fraud. This poses major hurdles for Vietnamese businesses that are already under pressure from tighter regulatory requirements. The Ministry of Industry and Trade (MoIT) is moving to defend exporters, in industry watchers’ assessment. They have recently published an early warning list of 17 categories of exported products likely to be targeted by trade remedy investigations.
The word ‘origin’ is an important one in international trade and is not simply a synonym for the sticker that says ‘Made in Vietnam. At the end of the guide, the MoIT provides guidance on how to ascertain a product’s source. First, you have to determine, if more than one country produces the item, either the country of full origin of the good, or the country of last substantial transformation. This complexity is dictated in large part by Article 3(b) of the World Trade Organization (WTO) Agreement on Rules of Origin (ROO).
The U.S. recently revised its own tariff policy along these lines, raising domestic content requirements for goods exported under the tariff code. This new requirement poses huge hurdles to Vietnamese exporters who now have to comply with tougher origin rules. Viet Nam’s MoIT remains committed to supporting firms. Through public consultations, they’re working to adjust the rules so that they more accurately reflect Vietnam’s production realities and enterprises’ capacities.
“Vietnam has always taken a proactive, open-minded approach and has worked closely with the US to negotiate fair trade policies, combat transhipment and promote mutually beneficial bilateral trade,” – Deputy Prime Minister Ho Duc Phoc
The HCM City Union of Business Associations (HUBA), deeply moved by developments, has been proactive in addressing the situation. They stress the importance of a comprehensive review of FDI in Vietnam. Dinh Hong Ky, vice chairman of the association, stated that Vietnam should proactively attract investment projects that generate higher added value while limiting those that engage solely in basic processing.
To enhance transparency in production processes, the MoIT is working diligently to achieve a higher degree of localization in exporting products. The ministry works closely with foreign governments when asked to verify the origin of imported products. It takes a holistic, proactive approach that’s what makes it so essential. When the U.S. determines that goods have been transshipped or misidentified in order to avoid application of trade defense measures, it can impose punitive tariffs.
Last week, the MoIT released an official dispatch. Only now, the emphasis is on better controlling the management of their imported inputs into made-for-export products. This initiative is a small but important piece of a larger strategy. It represents an important step toward consistent compliance with international standards and safeguarding the integrity of Vietnam’s export market.
The MoIT has specific mandates for enterprises permitted to grant Certificates of Origin (C/O). These steps provide for stricter punishments against anyone convicted of origin fraud. The MoIT plays a key role in supporting enterprises to prove their products’ origins. This makes sure that their Certificates of Origin are accepted and meet requirements for tariff preferences under pertinent trade agreements.
Vietnam’s ongoing efforts to combat origin fraud and enhance export integrity reflect a commitment to maintaining strong trade relations while adapting to evolving global market conditions. As the country navigates these challenges, it remains focused on fostering a transparent and robust export environment that benefits both domestic producers and international partners.
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