US processing Vietnam request for market economy status review

The U.S. Department of Commerce (DOC) is processing Vietnam’s request that its non-market economy status be reviewed.

According to a department document dated October 30, the Vietnamese government had sent the request in September, amid a changed circumstances review (CCR) of the anti-dumping duty (AD) order on raw honey exported from Vietnam to the U.S.

The government said Vietnam has made changes related to the DOC’s statutory criteria for evaluating a nation’s market economy status.

These include an exchange rate based on market principles, fairness and non-discrimination; free bargaining between labor and management on wage; improvements in investment environment with no differences between foreign and domestic investors; the government’s reduced control and ownership over production; the government’s non-significant role in resource allocation and price & output decisions; and reforms related to the legal framework, bankruptcy, transparency in corporate governance.

Based on the substantial information submitted by the Vietnamese government on reforms undertaken, the DOC determined that "good cause exists to review Vietnam’s status as a non-market economy". The last review was done in 2002.

In October, the DOC said it received various comments in opposition to the Vietnamese government’s request.

The department said it intends to issue its preliminary decision no later than 150 days and the final results no later than 270 days after the date on which the review was initiated.

Vietnam's total import and export turnover of goods reached nearly $558 billion in the first 10 months of 2023, down 9.6% over the same period last year, with an estimated trade surplus of $24.61 billion, according to the General Statistics Office. With a trade turnover of $90.1 billion, the U.S. was Vietnam’s second-largest trade partner, behind China with $139.2 billion.

The U.S. was Vietnam’s biggest goods buyer in the 10-month period. Vietnam exported goods worth $78.6 billion to the market and imported goods worth $11.5 billion.

The U.S. Department of Treasury has placed Vietnam on its “monitoring list” for currency manipulation again, a department report said last Tuesday. Vietnam had been removed from the list in November 2022 after featuring several times in the list.

The latest currency manipulation monitoring list also features mainland China, Germany, Malaysia, Singapore and Taiwan.

But the U.S Treasury report concluded that no major U.S. trading partner manipulated the rate of exchange between its currency and the U.S. dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade during the four quarters through June 2023.