United States and Vietnam reach agreement on shrimp and WTO dispute cases

“We welcome the resolution of this longstanding issue,” said Barbara Weisel, Assistant USTR.  “This agreement demonstrates the commitment of the United States and Vietnam to address outstanding issues as we work to take our relationship to the next level.”

The United States and Vietnam signed an agreement to resolve two longstanding WTO disputes over imports of Vietnamese shrimp to the United States  (the official case numbers are DS404 and DS429).  The agreement also provides a framework for the settlement of certain U.S. court litigation, as well as the resolution of certain outstanding duty claims covering various administrative reviews of the warmwater shrimp antidumping duty order.  Assistant U.S. Trade Representative Barbara Weisel, Assistant Secretary of Commerce for Enforcement and Compliance Paul Piquado, and Vietnam’s Deputy Minister of Industry and Trade Tran Quoc Khanh signed the agreement.

As a result, Minh Phu Group will no longer be subject to the antidumping duty order, while other Vietnamese exporters of warmwater shrimp will still be affected by the order.

“We welcome the resolution of this longstanding issue,” said Weisel.  “This agreement demonstrates the commitment of the United States and Vietnam to address outstanding issues as we work to take our relationship to the next level.”

“I am pleased that we have resolved this challenging matter in a way that is agreeable to the parties and that preserves our ability to effectively remedy unfair trade, providing U.S. businesses and workers the opportunity to compete on a level playing field,” said Assistant Secretary Piquado.

Background

The agreement resolves two outstanding WTO disputes brought by Vietnam:   United States – Anti-dumping Measures on Certain Shrimp from Viet Nam (DS404) and United States – Anti-dumping Measures on Certain Shrimp from Viet Nam (DS429).

Pursuant to the agreement, Commerce revisited prior administrative determinations to bring those decisions into compliance with the WTO dispute findings.  As a result, a Vietnamese exporter of frozen warmwater shrimp – Minh Phu Group – will no longer be subject to the antidumping duty order.  In addition, certain domestic litigation will be resolved and duty deposits will be refunded to the Minh Phu Group.  The antidumping duty order will remain in place for all other exporters of warmwater shrimp from Vietnam.

Analysis

As to how it concerns world trade, this case is important because it addresses the sometimes nebulous question of what exactly is fair in determining the proper prices of exports from non-market economies into market economies like the U.S. Vietnam and China are the only two countries considered by the WTO to be non-market economies.

Market Economy vs. Non-Market Economy

In 2005, the U.S. imposed anti-dumping duties on several Vietnamese importers of shrimp. Vietnam asked the WTO to review the duties and, in 2014, a WTO panel found the original anti-dumping order to be inconsistent with WTO rules, including elements of the decision not to remove Vietnamese exporter Minh Phu, a producer that later proved it had not dumped for three years — from the order. In 2015, the panel’s findings were adopted by the WTO dispute settlement body and the U.S. agreed to come into compliance.

The panel faulted “as such” Commerce’s practice in anti-dumping cases of starting with a “rebuttable presumption” that all exporters in non-market economies are government controlled, state-sponsored entities. As we said above, Vietnam and China are the only two countries regarded by the department to be NMEs. As with steel companies in China, some Vietnamese shrimp producers are state-controlled and some are not. The WTO essentially said Commerce must prove that companies it places tariffs on are receiving government support.

Source:

United States and Vietnam Reach Agreement on Shrimp, U.S. Department of Commerce, Jul 18, 2016

Full Text: Agreement between the United States and Vietnam on the Antidumping Duty Order on Certain Frozen Warmwater Shrimp from Vietnam, July 18, 2016 

U.S., Vietnam reach deal on U.S. imports of Vietnamese shrimp, Tuoi Tre, Jul 19, 2016

Vietnamese Shrimp and Market Economy Status: Anti-Dumping Case Study, Jul 19, 2016

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