Trade remedy measures help domestic sugar industry

Tariff reductions for sugar imported into Viet Nam under ATIGA have created difficulties for the domestic production of cane sugar. — Stock Photo congthuong.vn

Experts say trade remedies have helped the domestic sugar-producing industry recover and farmers stabilize their production.

Nguyen Van Loc, secretary general of the Vietnam Sugar Cane Association, said that in 2020, Viet Nam started reducing the 5% import duty on ASEAN sugar in accordance with the ASEAN Trade in Goods Agreement (ATIGA). This has seen a rapid increase in imported sugar from Thailand.

In 2020, sugar imported from Thailand reached almost 1.5 million tons, an increase of 330% compared to 2019.

Sugar imported from Thailand with large volume and low price has affected the domestic sugar production industry.

This volume of imported sugar completely dominated the local market and forced the price of local sugar to drop to a low level.

The low price forced farmers to reduce the cultivation of sugarcane and switch to other crops, which led to a reduction in the area under sugarcane cultivation.

Meanwhile, a high sugar stock due to falling sugar prices has put factories in danger of shutting down operations.

As a result, Viet Nam’s sugar industry is in danger of being wiped out.

According to the association, after the implementation of ATIGA, Viet Nam had only 30 factories in operation and 11 factories were forced to close. Of the 30 factories in operation, 17 are running at a loss.

About 3,300 workers lost their jobs and 93,225 farming households were affected due to difficulties in the domestic sugar industry.

Consequently, six sugar factories represented by the association filed an application for anti-dumping and anti-subsidy measures on cane sugar products from Thailand.

After a thorough investigation, the Ministry of Industry and Commerce imposed on June 15, 2021 the anti-dumping duty of 42.99% and the anti-subsidy duty of 4.65% on cane sugar originating in Thailand.

The application of trade remedies has resulted in a 75% decrease in imported sugar from Thailand.

This slows down unfair competition from Thai sugar for the domestic industry, helping to raise the price of locally produced sugar.

The price for buying sugar cane from farmers also increased from 100,000 VND to 200,000 VND per ton.

It is an effective solution to gradually restore raw material areas and reduce the pressure on national sugar cane companies.

Loc said trade remedies had reduced Thai sugar’s unfair competition with local sugar products, helping to raise the price of locally produced sugarcane, save a series of sugarcane factories and stabilize the sugar cane production for farmers.

“Since the decision to apply the trade remedy measures to Thai sugar, local cane companies have determined that it is time for them to restore production. Therefore, Son Duong Sugar and Sugarcane JSC has continued its investment policies and increased the purchase price of sugarcane for farmers,” said Nguyen Hong Minh, General Manager of Son Duong Sugar and Sugarcane JSC.

“The higher purchase price reassured the farmers in restoring the raw material areas. Now, if the market is stable, the sugar mills will recover and expand their production in the next 3-4 years.

However, there are signs of tax evasion, anti-dumping and anti-subsidy in other ASEAN countries other than Thailand, Minh said.

Therefore, the company proposes to the State to apply trade remedy measures for sugar from ASEAN countries.

Chu Thang Trung, deputy director of the Trade Remedies Department, said that the sugar production industry is one of the industries with integration of regional and global markets, so the industry knows that there are trade remedies which may be applied to protect the legitimate interests of the manufacture. industry.

Trung said that in the context of liberalization and globalization, more countries are reducing tariffs, especially when participating in free trade agreements.

This reduces import taxes on many items and even eliminates them altogether, creating more and more competition between imported goods and domestically produced goods.

“The application of trade remedies aims to ensure a fair competitive environment between imports and domestically produced goods. For domestic sugar processing companies and the industry itself, they need to improve their competitiveness to compete with imported products,” Trung said.

According to Trung, so far Viet Nam has conducted trade remedy investigations for a total of 25 cases, including 15 anti-dumping cases, six self-defense cases, one anti-subsidy case and two tax evasion cases.

Among them, most of the cases involved metal products such as steel and iron and steel products. There are also a number of cases related to wood, sugar, and certain other items.

Source: VNS

Rachel J. Bradford