Ministries prepare for Vietnam scuffle

February 11, 2021
Bangkok Post |

Thai authorities are preparing to oppose Vietnam's plan to impose a 34% anti-dumping tax on sugar imports from Thailand, which is based on a claim that Thai exporters are gaining an advantage over their Vietnamese competitors because of lower costs.

The Thai Industry and Commerce ministries are planning their strategy following a media report that Hanoi launched a probe into the issue and, according to its preliminary findings, found the accusation has grounds.

The investigation, which began in September last year, found subsidies as dumped sugar from Thailand sharply increased to 1.3 million tonnes in 2020, up 330% from 2019, said the media report, citing the Vietnamese Industry and Trade Ministry.

The schedule for the import duty has not been decided. The ministry expects to conclude its investigation in the second quarter this year.

This is prompting Thailand to gather trade information in order to clarify any doubts, said Ekapat Wangsuwan, secretary-general of the Office of the Cane and Sugar Board (OCSB).

"We cannot give more details at this moment because sugar is a sensitive issue for each country. We have to see what Vietnam will do next," he said.

Thailand, the world's fourth largest sugar producer and the second largest exporter following Brazil, saw its sugar exports become popular overseas because of a combination of factors ranging from production standards to better cost control, said the OCSB.

According to the media report, the Asean Trade in Goods Agreement (Atiga) prohibits Vietnam from imposing import duties on sugar from Southeast Asian countries in 2020, but it allows Asean members to consider imposing a tax to guard their domestic industries against anti-competitive behaviour.

Under Atiga, the import duties must be reduced to 0-5%, but the Vietnamese Industry and Trade Ministry suggested implementing the tax reduction later than other countries because of concerns it would impact the local sugar industry, said the Thai Sugar Millers Corporation.

An anti-dumping tax would certainly affect Thai sugar exports, so a negotiation with the Vietnamese government is a must, said the corporation.

"We also need to look into whether the anti-dumping measure violates the rules of the World Trade Organization," said Rangsit Hiangrat, director-general of the Thai Sugar Millers Corporation.