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1
WTO Antidumping and Developing Countries A Case Study of Vietnam
WTO ANTIDUMPING AND DEVELOPING
COUNTRIES
A CASE STUDY OF VIETNAM
By
VAN ANH LE VU

September 2011




Electronic copy available at: http://ssrn.com/abstract=2156011
2
WTO Antidumping and Developing Countries A Case Study of Vietnam

Acknowledgement



First, I would like to express my deep gratitude to my supervisor, Dr. Wei Shi, for his
professional supervision, as well as his devotion in guidance and help during the period of
realisation and completion of this research.
I also want to take this opportunity to send my dearest thank to my parents, who always give
me strength to carry on, and special thank for my fathers advices that give me more
confidence in doing my work.
Last but not least, I would like to say thank you to my friends and lectures of Ho Chi Minh City
University of Law who gave me a lot of support and help in completing my dissertation.












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3
WTO Antidumping and Developing Countries A Case Study of Vietnam
ABSTRACT
The paper takes a close look at antidumping practice in Vietnam, giving lessons to Vietnamese
exporters of how to respond to an antidumping investigation. The author uses case studies of
South Africa, India, and China to identify how those countries improve their antidumping
policies to be more consistent with WTO regulations and how they counteract when an
investigation is initiated. I begin by providing a comprehensive overview of global antidumping
practice, then move to the case of Vietnam, giving comments on her antidumping legislation,
and analyzing two most important cases which have had significant impacts on Vietnams
enterprises.
As a relatively new and small member of the WTO, Vietnam lacks experience in settling
disputes. The dissertation is going to explore experience of the developing countries which
share common eco-socio features with when the risk of being found guilty of dumping on
foreign market is discernible.









4
WTO Antidumping and Developing Countries A Case Study of Vietnam
LIST OF ABBREVIATIONS
AB: Appellate Body.
ADA: (Antidumping Agreement) Agreement on Implementation of Article VI of the
General Agreement on Tariffs and Trade 1994.
ASEAN: Association of Southeast Asian Nations.
BTA: Bilateral Trade Agreement
CFA: Catfish Farmers of America.
DOC: Department of Commerce.
DSB: Dispute Settlement Body.
DSU: Dispute Settlement Understanding.
EC: European Community.
EU: European Union.
GATT: General Agreement on Tariffs and Trade.
ITC: International Trade of Commission.
Trans: Transaction.
US: United States.
WA: Weighted Average.
WTO: World Trade Organization.


5
WTO Antidumping and Developing Countries A Case Study of Vietnam
TABLE OF CONTENTS
Acknowledgement .......................................................................................................................... 2
ABSTRACT ........................................................................................................................................ 3
LIST OF ABBREVIATIONS ................................................................................................................. 4
CHAPTER ONE: ANTIDUMPING PRACTICE IN THE WORLD AND IN VIETNAM ................................ 7
1. Antidumping Practice in the World ..................................................................................... 7
2. Antidumping Practice in Vietnam ...................................................................................... 15
2.1 Antidumping Actions against Vietnamese Products .................................................. 15
2.2 Vietnams Use of Antidumping Measure against Imported Products ....................... 22
CHAPTER TWO: BASIC OVERVIEW OF ANTIDUMPING ................................................................. 23
1. The History of Antidumping Legislation ............................................................................ 23
2. Economic Justification on Antidumping ............................................................................ 26
3. Nature of Dumping ............................................................................................................ 37
4. Zeroing Practice ................................................................................................................. 40
5. Vietnamese Antidumping Regulations .............................................................................. 47
CHAPTER FOUR: ............................................................................................................................ 53
A REPONSE FROM DEVELOPING COUNTRIES: A CASE STUDY OF VIETNAM ................................ 53
1. The Vietnam US relation ................................................................................................. 53
2. Vietnam and Non-Market Economy Status ....................................................................... 55
3. Certain Frozen Fish Fillets from Vietnam - The Catfish War.............................................. 59
4. Certain Frozen Warmwater Shrimp from Vietnam the US - Shrimp case (DS404) ..... 71
4.1 An Overview of the Dispute........................................................................................ 71
4.2 What Happened to Vietnam? ..................................................................................... 75
4.3 The US Retrospective in Antidumping System ........................................................... 77
4.4 Vietnamese Zeroing practice Complaint in the US Shrimp case .......................... 78
6
WTO Antidumping and Developing Countries A Case Study of Vietnam
CHAPTER FIVE: CONCLUSION ........................................................................................................ 83
BIBLIOGRAPHY .............................................................................................................................. 88

Figure 1 Antidumping Investigations from 1995 - 12/2009 .......................................................... 8
Figure 2 Top Ten Anti Dumping Users from 01/1995 - 06/2010 ................................................ 10
Figure 3 The Percentage of Using Antidumping between Top Ten Users and other WTO
Members ....................................................................................................................................... 11
Figure 4 Top Ten Countries Being Levied Antidumping Measures from 01/1995 - 06/2010 ..... 12
Figure 5 Antidumping Measures: By Sector from 01/1995 - 06/2010 ....................................... 13
Figure 6 Share of Total Exports (%) to Selected Countries 2008 ................................................ 20
Figure 7 US Catfish Consumption Quantity From 2000 to 2002 ................................................. 64
Figure 8 US Total Catfish Import Quantity From 2000 to 2002. ................................................. 65
Figure 9 US Catfish Consumption Quantity from 2000 to 2002. ................................................ 69
Figure 10 The US Catfish Share Market From 2000 to 2008 ...................................................... 70

Table 1 Antidumping Cases against Vietnam (1994 31/12/2010) ........................................... 15
Table 2 A Illustration of Zeroing Practice Using .......................................................................... 41
Table 3 Model Zeroing ................................................................................................................ 45
7
WTO Antidumping and Developing Countries A Case Study of Vietnam

CHAPTER ONE: ANTIDUMPING PRACTICE IN THE WORLD AND IN VIETNAM
1. Antidumping Practice in the World
The trilogy of a trade remedy regime including Antidumping, Subsidy, and Safeguard measures
allows a nation to defend its domestic industries against unfair trade or imports which is
considered to cause harm to the economy. Antidumping actions are by far the remedy of choice.
By June 2010 there are 3,752 antidumping investigations, more than 17 times compared with
216 safeguard investigations.
1
It is an illustration of burgeoning of antidumping using which can
be explained under two reasons. Firstly, it is described as the most ambiguous tool of the trade
remedy because the measure permits national investigating authorities discretionally to
determine dumping, injury, and causal interrelations.
2
Secondly, antidumping is the most
potent protectionism weapon with the least political visibility, thus the change of winning of
every petition is quite high.
3
An empirical study conducted by Aradhna Aggarwal pointed out
that the number of affirmative antidumping cases of active user countries over 1995 2004
was well above 50%.
4



1
World Trade Organization, http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September 2011.
2
Aradhna Aggarwal, Anti Dumping Protection: Who Gets IT? An Explanatory Analysis of Anti Dumping Use in the
Most Active User Countries, (2007) Working Paper 9, 13, Centre for Trade and Development,
http://www.esocialsciences.com/data/articles/Document1622008540.6715509.pdf, accessed 31 August
3
Ibid.
4
Ibid.
8
WTO Antidumping and Developing Countries A Case Study of Vietnam
Figure 1 Antidumping Investigations from 1995 - 12/2009

Source: The authors calculations based WTOs data,
http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September 2011.

As can be seen in the Figure 1, antidumping protection started to increase since 1996,
skyrocketing to 371 initiations in 2001 and the trend remained until 2004. This e could be seen
as the heyday of antidumping massive use. However, since 2005 antidumping filings have
showed a downward tendency which is predicted to continue declining.
Pre 1980 the worldwide antidumping activity was mainly used by six major users: the US, the
EU, Australia, Canada, South Africa, and New Zealand.
5
Later this practice flourished between
1980 and 1990 with 95% antidumping case on the world was brought by the US, Australia,

5
Bruce A. Blonigen and Thomas J. Brusa, Antidumping, Working paper 8398, Nation Bureau of Economic
Research, July 2007, 4
http://www.nber.org/papers/w8398.pdf?new_window=1, accessed 31 May 2011.
0
50
100
150
200
250
300
350
400
Antidumping investigations
9
WTO Antidumping and Developing Countries A Case Study of Vietnam
Canada and the European Union.
6
Proliferation of antidumping actions was described by the
Economist as the chemical weapons of the worlds trade wars.
7

With time wing shifted, antidumping has been no longer a monopoly tool of the industrialized
world. Developing countries also started realizing its potential power for using to protect their
domestic producers also. The fact that WTO members are initiating antidumping investigations
for the benefits of their own enterprises or challenging another members imposition of
antidumping duties before the WTO is practically an everyday occurrence.
8
For instance,
upon two days being levied a safeguard tariff on automobiles, China responded to the US by
announcing that they might conduct an antidumping investigation on automobiles and chicken
product of American exporters. Undoubtedly it is a tit for tat response.
9









6
Raj Bhala, Rethinking Anti dumping Law, (1995) 29 Washington Journal International Law & Economic, 1 144
at 4.
7
Ibid.
8
Reid M. Bolton, Anti Dumping and Distrust: Reducing Anti Dumping Duties under the WTO through Heightened
Scrutiny, 1 36 at 7 9, http://www.boalt.org/bjil/documents/BoltonArticle.pdf, accessed 26 May 2011
9
Ibid.
10
WTO Antidumping and Developing Countries A Case Study of Vietnam
From the Figure 2, the low-income markets such as India, China, Argentina, Turkey, Brazil and
South Africa amounted to six places of the top ten biggest antidumping users all over the
world.
10
Indian has become the most initiator and the heaviest user within the past 15 years to
seek the strongest protection of its domestic industries, followed by the US and the EU at the
second and third positions, respectively. The statistics presents an increasing trend of
antidumping initiations from the developing countries.
11
Joining the biggest global economic
organization technically brings equality to the poorer nations in the trade war.
Figure 2 Top Ten Anti Dumping Users from 01/1995 - 06/2010

Source: The authors calculations based WTOs data,
http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September 2011.


10
World Trade Organization, http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September
2011.
11
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 233.
436
289
269
190
142
137
128
105
94
83
0
50
100
150
200
250
300
350
400
450
500
Antidumping Investigations
11
WTO Antidumping and Developing Countries A Case Study of Vietnam
There are 101 WTO member states involved in the antidumping measure either as a user or as
a target. However, only top ten users have occupied almost 50% of antidumping actions. Active
participation of WTO members from both rich and poorer nations implicates the abuse of this
trade remedy to deter penetration of foreign competitors under the cloak of so-called unfair
competition.

Figure 3 The Percentage of Using Antidumping between Top Ten Users and other WTO
Members

Source: The authors calculations based WTOs data,
http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September 2011.

Interestingly, these countries that are heavy users also are bombarded by other member states
(Figure 4). The more frequency they act as users, the more they become targets: China, United
States, India, and Brazil accounted for the top spots as the initiators as well as the victims.
According to the statistics collected by the WTO, China was the most frequent subject of being
49.92
50.08
Topten Countries
The other WTO members
12
WTO Antidumping and Developing Countries A Case Study of Vietnam
levied antidumping tariffs from importing markets. The number of Chinese products being
targeted is fivefold greater than the next follower - the Republic of Korea, and leaves the other
victim countries far behind on the table. China accounts for more than one fifth of the total of
antidumping measures (2,433) and no sign indicates that actions against China will stop. The
chart also reflects the allocation of global economy; the states that are being applied
antidumping duties most usually come from the low income markets where goods production is
mainly located.

Figure 4 Top Ten Countries Being Levied Antidumping Measures from 01/1995 - 06/2010

Source: The authors calculations based WTOs data,
http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September 2011.



563
165
132
127
112
98 97
92 90
77
0
100
200
300
400
500
600
Antidumping Measures
WTO Antidumping and Developing Countries
Figure 5 shows that the most targeted industries of
need costly input such as steel,
require high fixed cost and great
producers cannot sell the product at normal value. They accept
the hope that offering a cheaper
to mass production to reduce the cost. Hence

Figure 5 Antidumping Measures: By Sector from 01/1995
Source: The authors calculations based WTOs data,
http://www.wto.org/english/tratop_e/adp_e/adp_e.htm


12
Mitsuo Matsushita, Thomas J. Schoenbaum and Petros C. Mavroidis,
Practice, and Policy (2
nd
ed, Oxford University Press, New York, 2006), 397.
12.95
9.08
8.59
4.19
15.99
WTO Antidumping and Developing Countries A Case Study of Vietnam
he most targeted industries of antidumping cases are the
need costly input such as steel, raw materials, rubbers, plastics, and chemicals
high fixed cost and great huge amount of money for initial investment
product at normal value. They accept the loss at the beginning
er price to customers will increase consumption which
educe the cost. Hence profit will be recouped later.
12

Antidumping Measures: By Sector from 01/1995 - 06/2010
The authors calculations based WTOs data,
http://www.wto.org/english/tratop_e/adp_e/adp_e.htm, accessed 1 September 2011
ushita, Thomas J. Schoenbaum and Petros C. Mavroidis, The World Trade Organization: Law,
ed, Oxford University Press, New York, 2006), 397.
28.89
20.30
Base metals and articles
Products of the chemical and
allied industries
Resins, plastics and articles;
rubber and articles
Textiels and articles
Machinery and electrical
equipment
Paper, paperboard and articles
Others
13
are the sectors which
chemicals because they
initial investment. Therefore, the
at the beginning with
increase consumption which can lead
06/2010

, accessed 1 September 2011.
The World Trade Organization: Law,
Base metals and articles
Products of the chemical and
Resins, plastics and articles;
Machinery and electrical
Paper, paperboard and articles
14
WTO Antidumping and Developing Countries A Case Study of Vietnam
Nowadays antidumping has been becoming the most desirable weapon where the internal
markets face with the sudden increased imports. While antidumping refers to operation of a
cheap price policy run by the producers themselves, subsidy involves the role of governments
in providing financial support to local companies. Obviously, proving a violation committed by
the private sector can bring the higher possibility of winning than attacking the state-related
party. The great number of antidumping actions implies transformation of this trade remedy,
from an anti protectionist shield to a pro protectionist spear. It has raised a concern whether or
not modern antidumping legislation is straying far from its original purpose; that is protecting
competitive process and consumers from monopoly power of the foreign exporters. Instead of
being used to improve competition, within the last 15 years, it has been, in contrast, abused as
an anti competitive tool.
13
Interestingly, if the richer countries were the biggest users in the
dawn of the implementation of WTO antidumping policy, nowadays, the poorer countries
quickly engage the race of using this measure.








13
Gregory Mankiw and Phillip L. Swagel, Anti Dumping: The Third Rail of Trade Policy, (2005) 84 Foreign Affairs,
no. 4, 107 119 at 108 110.
http://www.economics.harvard.edu/files/faculty/40_Dumping%20-
%20Foreign%20Affairs%20JulyAug%202005%20MankiwSwagel.pdf, accessed 26 May 2011.
15
WTO Antidumping and Developing Countries A Case Study of Vietnam
2. Antidumping Practice in Vietnam
2.1 Antidumping Actions against Vietnamese Products
From the first time being imposed an antidumping duty in 1994 by Columbia until December
2010, Vietnam has totally undergone 36 investigations within 17 years.
14


Table 1 Antidumping Cases against Vietnam (1994 31/12/2010)

Year

No Products Complainants
Definitive measure Note
Date Rate Period

2010
36
Steel Wire
Garment Hanger
US
Being investigated
antidumping duty
evasion.
35 Air conditioners Argentina
2009
34 Air conditioners Turkey
No conclusion as to
antidumping duty
evasion
33
Recordable Digital
Versatile Disc
India 02/07/2010
64.09% (50,51
USD/1.000 unit
5 yrs

32
Polyethylene
Retail Carrier Bags
US 04/05/2010 52.30% - 76.11% 5 yrs

31
Waterproof
rubber footwear
and bottoms
Canada
No material injury
to domestic
industry
30 Footwear Brazil
Petition withdraw
because of the too

14
Vietnam Trade remedies Council
http://antidumping.vn/statistics/2011-02-09/statistics-antidumping-case-against-vietnams-good-december-2010,
accessed 21 June 2011.
16
WTO Antidumping and Developing Countries A Case Study of Vietnam
low volume of
dumped products


2008
29
All Fully Drawn or
Fully Oriented
Yarn/Spin Draw
Yarn/Flat Yarn of
Polyester (FDY)
India

Cloth-upper shoes Peru 02/11/2009 0.8 USD/pair
Re-investigate case
no. 23
28
Uncovered
innerspring units
US 22/12/2008 116,31% 5 yrs

27
Tarpaulin, made of
polyethylene or
polypropylene
Turkey 1.16 USD/kg 5 yrs


2007
26
Compact Disc-
Recordable (CD-R)
India 06/06/2009
46,94 USD/1000
unit
5 yrs

25
Compact
Fluroescent Lamps
(CFL)
India 26/05/2009
0,452-1,582
USD/unit
5 yrs

24 Pocket lighter Turkey
No antidumping
levied because of
no dumping
evidence nor
antidumping
evasion
2006 23 Cloth-upper shoes Peru 09/2007
No antidumping
levied because of
no dumping
evidence nor
antidumping
evasion
17
WTO Antidumping and Developing Countries A Case Study of Vietnam
22 V-belts Turkey 31/3/2007 4,55 US$/kg 5 yrs
2005
21
Spokes for bicycles
and motorcycles
Argentina 24/6/2007 81% 5 yrs

20
Common
Fluorescent Lamps
from 18 to 40 watt
Egypt 22/8/2006 0,32 USD/unit 5 yrs

19
Footwear with
uppers of leather
EU 5/10/2006 10% 2 yrs
Extent to 15
months more
2004
18
Boards for Surfing
type bodyboard
Peru 5,2 USD/ unit

17
Compact
Fluorescent Lamps
(CFL-i)
EU 66,1 %
Investigation of
antidumping duty
evasion
16
(Stainless steel
fasteners)
EU 7,7 % 5 yrs

15
Tube or pipe
fitting
EU
Petition withdraw
14 Bicycle EU 15,8 %- 34,5 % 5 yrs
13 Tyre Turkey
29%- 49%


12
Ring Binder
Mechanisms
EU 51,2 %- 78,8 %
Investigation of
antidumping duty
evasion
2003
11
Frozen and
Canned Warm
water Shrimp
US 4,13%- 25,76%

10 Oxide Zinc EU 28%
Investigation of
antidumping duty
evasion
18
WTO Antidumping and Developing Countries A Case Study of Vietnam
2002
9 Frozen Fish Fillets US 36,84%- 63,88%
Antidumping duties
was continues for 5
years more
8 Gas lighter Korea Petition withdraw
7 Gas lighter EU Petition withdraw
6
Water-proof
Footwear & Sole
Canada
No material injury
to domestic
industry
2001 5 Garlic Canada 1,48 CAD/kg
2000 4 Gas lighter Poland 0,09 Euro/unit
1998
3 Footwear EU
No material injury
to domestic
industry
2 Glutamate EU 16,8%
Investigation of
antidumping duty
evasion
1994 1 Rice Columbia
No material injury
to domestic
industry
Source: Vietnam Trade remedies Council
http://antidumping.vn/statistics/2011-02-09/statistics-antidumping-case-against-vietnams-
good-december-2010, accessed 21 June 2011.

From the table 1, the EU is the heaviest user with 10 investigations and the US occupies the
second position with 5 times using this tool. It is worth noting that threat not only derives from
high-income markets to which Vietnamese products are mainly imported, such as the EU, the
North American but also comes from lower-income markets like India, Turkey, and Peru. Of
antidumping actions against Vietnam, the actions against Certain Frozen Fillets from Vietnam
19
WTO Antidumping and Developing Countries A Case Study of Vietnam
(hereinafter referred as to Catfish War), Antidumping on Vietnamese leather shoes, and
United States Antidumping Measures on Certain Shrimp from Vietnam, WT/DS404/R
(hereinafter referred as to US-Shrimp case) are the most remarkable cases because heavy
antidumping duties had adverse effects on Vietnams principle exports. The country is one of
the top ten leading countries in footwear exporting in the world
15
and the fourth global largest
leather shoe producer.
16
Moreover, products from Vietnam catfish virtually monopolize the
international market share of 95%.
17
Therefore, the antidumping orders imposed by the US and
the EU led to significant decline in the countrys imports to these markets. At that time the
Vietnamese producers must accept those unfair decisions without any chance to challenge
them under the WTO DSB because Vietnam was not yet a WTO member. No longer joining the
WTO, on 1 February 2010, the Government of Vietnam sent a request of consultation to the US
regarding antidumping tariffs on shrimps and, the WTO DSB sides with Vietnam in the dispute.
The win actually creates more favourable conditions for the export of Vietnamese shrimp in
the future and it also helps US importers feel more secure when they buy Vietnamese
seafood, said Truong Dinh Hoe, The General Secretary of the Vietnam Association of Seafood
Exporters and Producers.
18

Opening the market, on the one hand introduces new challenges to local exporters: non-tariff
barriers and protectionism of which antidumping is a graphic example. On the other hand,
acceding to the WTO brings advantages. Trade liberalisation benefits Vietnams economy

15
Speech of Dr. Nguyen Thi Tong, General Secretary of LEFASO Vietnam,
http://siteresources.worldbank.org/INTRANETTRADE/Resources/WBI-Training/288464-1139428366112/Session6-
NguyenThiTong-Footwear_EN.pdf, accessed 15 June 2011.
16
Look at Vietnam,
http://www.lookatvietnam.com/2011/04/vietnams-footwear-sets-to-boom-on-eus-tax-removal.html, accessed 15
June 2011.
17
Vietnam Chamber of Commerce and Industry, http://chongbanphagia.vn/diemtin/20110606/ca-tra-viet-nam-
chiem-95-thi-phan-ca-thit-trang-gioi, accessed 23 June 2011.
18
Vietnam Seafood Trade Magazines, http://vietfish.org/20110715034457546p49c82/vietnam-welcomes-win-in-
antidumping-case-against-us.htm, accessed 18 Jul. 11
WTO Antidumping and Developing Countries
because products can penetrate
less than favourably due to the status of
Furthermore, the win over US proves that Vietnam realizes effectiveness of WTO dispute
settlement mechanism in the trade dispute.
The fact that Vietnam primarily exports
bring risks to the exporters as
blocked by antidumping decisions.
are the biggest trading partners of Vietnam, amounting to 19% and 17% of the total exports,
respectively.

Figure 6 Share of Total Exports (%) to Selected Countries 2008
Business Monitor International, Vietnam Business Forecast Includes 10
Inflationary Pressures Threaten Exchange Rate Policy, Q1 2011, 13,
accessed 06 June 2011.

19
The GATT Agreement, Art. 1 and 3.
14
7
7
3
3
1
13
WTO Antidumping and Developing Countries A Case Study of Vietnam
te other member states markets and require to be treated no
due to the status of Most Favoured Nation and Nation Treatment.
Furthermore, the win over US proves that Vietnam realizes effectiveness of WTO dispute
n the trade dispute.
primarily exports to some markets, namely the US, the EU, Japan,
as production will easily and severely get hurt if products are
antidumping decisions. It can be observed from the Figure 7 that the US and the EU
are the biggest trading partners of Vietnam, amounting to 19% and 17% of the total exports,
Share of Total Exports (%) to Selected Countries 2008
or International, Vietnam Business Forecast Includes 10-Year Forecast to 2020:
Inflationary Pressures Threaten Exchange Rate Policy, Q1 2011, 13, www.businessmonitor.com
19
16
17
United States
European Union
ASEAN
Japan
China
Australia
Korea
United Kingdom
Hong Kong
Others
20
other member states markets and require to be treated no
Most Favoured Nation and Nation Treatment.
19

Furthermore, the win over US proves that Vietnam realizes effectiveness of WTO dispute
the EU, Japan, may
get hurt if products are
d from the Figure 7 that the US and the EU
are the biggest trading partners of Vietnam, amounting to 19% and 17% of the total exports,
Share of Total Exports (%) to Selected Countries 2008

Year Forecast to 2020:
www.businessmonitor.com,
United States
European Union
Australia
United Kingdom
Hong Kong
21
WTO Antidumping and Developing Countries A Case Study of Vietnam
A sound evidence is the antidumping tariff on Vietnamese footwear by the EU from October
2006 till 1
st
April 2011. The loss went beyond the economic front; it had a bad influence on
workers lives and put them in an unstable living condition. More than 80% female labour in the
footwear industry had been affected, their incomes reduced by around 20% - 30% per month.
20

Moreover leather and footwear imports to those markets declined by 47%.
21
The increased
number of antidumping cases applied to Vietnams products not only poses a considerable
threat to exporting companies but also to the countrys economy.
Vietnam-made goods can easily become the subject of antidumping lawsuits not only because
the country mainly exports raw materials and unfinished products, resulting in low prices.
Those products but also are brought to Vietnam in order to escape antidumping duties from
other countries, or they are processed a little in Vietnam before having shipped to the
importing member states. The chance of being found guilty of dumping in the second scenario
is discernible when there is a recent warning that Vietnamese furniture might be levied an
antidumping tariff by the US when a similar duty on wooden bedroom furniture of China, since
2005 are still considered to stay in effect.
22




20
The Action Aid Vietnam and Vietnam Leather and Footwear Association, A report on Anti Dumping Duty
imposed by the EU on Vietnam leather and footwear, May 2005.
(Hip hi da giy Vit nam v T chc Action Aid Vietnam, Bo co kt qu nghin cu, nh hng ca v kin
bn ph gi giy m da ca EC i vi ngnh da giy Vit Nam, H Ni thng 5/2005)
21
Ibid.
22
Harwood Review Express, Lesson from Furniture Antidumping Innovation Needed to Combat Strong
Competition, (2011) Volume 10, Issue 22, http://afcjf.com/downloads/021111HRX-FurnitureDumping.pdf,
accessed 15 June 2011.
22
WTO Antidumping and Developing Countries A Case Study of Vietnam
2.2 Vietnams Use of Antidumping Measure against Imported Products
By and large, Vietnam has not been an antidumping user. Vietnamese businesses until now
have not initiated any lawsuits against importing competitors. Lack of sufficient and reliable
importing statistics comes from the fact that a significant part of imports into Vietnam through
smuggling or border trade. Therefore associations and Vietnamese antidumping investigating
authority hardly prove dumping, injury and the causal link between them.
23
In the few past
decades, the producers have been encountered sudden imports of textile and clothing, steel,
papers, sugar, and saltfrom China and ASEAN countries.
24
Although Vietnam exports these
products, a greater amount from China, Thailand, and Indonesia has been overwhelming in the
country market, defeating domestic-manufactured goods. The associations did not play an
effective role in response to the sudden increased imports because they lacked experience and
they were poor-equipped knowledge. Inability to keep close control of imports can be an
obstacle for Vietnamese domestic industries to file an antidumping case. This poses a threat of
being driven away the home market to domestic producers if they have not been well equipped
the rules of economic integration.






23
Le Thi Thuy Van and Sarah Y. Tong, Vietnam and Anti Dumping: Regulations, Applications, and Response, EAI
Working Paper No.146, 1 27 at 9 http://www.eai.nus.edu.sg/EWP146.pdf, accessed 23 June 2011.
24
Ibid., 9 10.
23
WTO Antidumping and Developing Countries A Case Study of Vietnam
CHAPTER TWO: BASIC OVERVIEW OF ANTIDUMPING
1. The History of Antidumping Legislation
The history of antidumping can be traced back to the first legislation in the world; this is Canada
Antidumping Act enacted in 1904.
25
According to Jacob Viner, the object of the first legislation
is to attack international price discrimination.
26
Subsequent to the Canada pioneer, a number of
developed countries in turn introduced their domestic laws to counter against the dumping
matter: New Zealand (1905), Australia (1906), South Africa (1914), the US (1916) and the
United Kingdom (1921)
27
. The new antidumping legislation of Australia, Great Britain, New
Zealand, and the US together with the earlier law of Canada laid out the foundation the WTO
prevailing provisions.
28
According to Skype, all of those countries proposals were efforts to
prevent unfair and uncompetitive practices of foreign exporters.
29
At the dawn of national
antidumping laws, substance and procedure varied amongst them.
30
While neither the South
African nor the Canadian legislation contained an injury requirement, Australia required the
finding of intend to destroy or injure a domestic industry.
31
The first US antidumping statue
which is still effective now was known as the Antidumping Act of 1916.
32
Because of its

25
Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff Publisher, Leiden
2008), 11.
26
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 250.
27
Ibid.; Australian Chamber of Commerce and Industry, Another Look at Anti Dumping, (2006) 2 CACCI Journal,
no.1 9 at 1, http://www.cacci.org.tw/Journal/2006%20Vol%202/Another%20Look.pdf, accessed 1 June 2011.
28
Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff Publisher, Leiden,
2008), 12;
29
Aradhna Aggarwal, Anti Dumping Protection: Who Gets IT? An Explanatory Analysis of Anti Dumping Use in
the Most Active User Countries, (2007) Working Paper 9, 3, Centre for Trade and Development,
http://www.esocialsciences.com/data/articles/Document1622008540.6715509.pdf, accessed 31 August;
30
Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff Publisher, Leiden
2008), 11.
31
Ibid., 12.
32
Jeff Waincymer, Implications for Antidumping and Countervailing, (2001), 5
24
WTO Antidumping and Developing Countries A Case Study of Vietnam
predatory intent-based test, whether it was a dumping law or an anti-predatory pricing
legislation is still in question even though the WTO DSB concluded it as an antidumping law.
33

However in 1921 a series of new antidumping legislation was adopted by Australia, Great
Britain, New Zealand, and the US added the material injury as a condition to condemn dumping
and provided authority to counteract it.
34

Despite of a long history, antidumping was not chosen as a potent weapon for protectionism
until the 1980s.
35
The proliferation of antidumping using led to the adoption of Article VI of the
1947 GATT as the first binding international rule for the purpose of providing a standard legal
framework to counter the abuse of antidumping.
36
The US was the key proponent of some
responses to allegedly unfair trade in the form of dumping or subsidized good.
37
As the first
international rule, the Article merely set out basic principles without any guidance on
administration or calculation methodology, therefore a great attitude was left for each member
state to design by its own.
38
Since 1947 the antidumping matter started to be paid a more
extensive attention. In 1958 a GATT study of national antidumping laws was established.
39
Two

http://www.apec.org.au/docs/waincymerfta.PDF, accessed 3 September 2011.
33
Ibid.
34
Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff Publisher, Leiden
2008), 12.
35
Raj Bhala, Rethinking Anti dumping Law, (1995) 29 Washington Journal International Law & Economic, 1 144
at 4.
36
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005), 2,
http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011; Aradhna Aggarwal , Anti
Dumping Law and Practice: An Indian Perspective, (2002) Working paper 85, 1 68, 15, Indian Council for
Research on International Economic Relations, http://www.icrier.org/pdf/antiDump.pdf, accessed 07 Apr. 11.
37
Jeff Waincymer, Implications for Antidumping and Countervailing, (2001), 6
http://www.apec.org.au/docs/waincymerfta.PDF, accessed 3 September 2011.
38
Ibid.
39
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005), 3,
http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
25
WTO Antidumping and Developing Countries A Case Study of Vietnam
years later a Group of Experts was also set up to discuss on certain common interpretations of
ambiguous terms of Article VI.
40

The Kennedy Round Negotiation beginning in 1963 which mainly focused on the US
antidumping law and the manner of its application led to the Agreement on the
Implementation of Article VI (the Antidumping Code) in 1967.
41
The adoption of the
Antidumping Code, in spite of some opposition, resulted in major revisions of Antidumping law
of Canada and of the EU Regulations.
42
A number of issues in the implementation of the Code
1967 such as the treatment of sales at a loss in home market, the allowances to be made to
the domestic and export prices, the determination of material injury as well as who could
initiate the AD investigations, had arisen.
43
Although the Tokyo Round in 1967 attempted to
close the existing loopholes left by the former code, it gave rise to a whole host of other
issues.
44
25 signatories to the Antidumping Code
45
in 1967 committed themselves that they
domestic trade legislation was rendered consistent with the Code. However the Code provision
of causality was quite stringent and inconsistent with the US Antidumping law. As a result,
during the 80s the voices of dissatisfaction with antidumping laws and their application and the

40
Ibid.
41
Aradhna Aggarwal , Anti Dumping Law and Practice: An Indian Perspective, (2002) Working paper 85, 1 68 at
15 Indian Council for Research on International Economic Relations, http://www.icrier.org/pdf/antiDump.pdf,
accessed 07 Apr. 11; Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff
Publisher, Leiden, 2008), 12.
42
Aradhna Aggarwal , Anti Dumping Law and Practice: An Indian Perspective, (2002) Working paper 85, 1 68 at
16 Indian Council for Research on International Economic Relations, http://www.icrier.org/pdf/antiDump.pdf,
accessed 07 Apr. 11.
43
Ibid., Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA,
2005), 3, http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
44
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005), 3,
http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
45
Ibid.
26
WTO Antidumping and Developing Countries A Case Study of Vietnam
Tokyo Code escalated. Some writers instead of condemning dumping shifted to condemn the
AD measures.
46

The incompletion of the Antidumping Code in 1967 made the antidumping matter become the
first significant area of non tariff legal reform in GATT history in a wider economic context. A
subsequent antidumping agreement replacing the Antidumping Code 1967 was negotiated in
the Tokyo Round, which resulted in the Tokyo Antidumping Code in 1979.
47
However the new
code neither addressed all of the issues left by the former one. The unresolved problems were
continuously placed on the agenda of the Uruguay Round with the confrontation between
developed countries, especially the US and the EU, and newly industrializing countries and
developing nations, who were typically defenders rather than complainants.
48
Despite
disagreement amongst countries, the Antidumping Agreement was finally adopted in 1995.
Unlike the Tokyo Round Antidumping Code, the ADA forms part of the single package. Thus all
WTO members are automatically members of and bound by the ADA.
49
However it does not
mean the members have to enact its national antidumping code. Yet if they do adopt, they
must ensure that the national law is consistent with the provision of the ADA.
50

2. Economic Justification on Antidumping
Trade liberalization beginning with the establishment of WTO has removed trade barriers,
between member states with the hope of fostering an easier circulation of goods and services
from a country to another one. The Marrakesh Declaration emphasized the principle of

46
Ibid.
47
Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff Publisher, Leiden,
2008), 13 14.
48
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 235.
49
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005), 3,
http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
50
Ibid.
27
WTO Antidumping and Developing Countries A Case Study of Vietnam
resist[ance] protectionist pressures of all kinds.
51
However globalization not only comes with
opportunities but also comes with threats. Each nation utilizes its comparative advantages to
maximize profit, specializing in goods and services which they produce most efficiently. As a
result, consumers benefit from paying less for more output. In contrast, domestic industries
have to face with serious competition from foreign producers when they charge a cheaper price
in importing markets than in their home market for the same product. This practice was known
as dumping.
From a political view standpoint, antidumping laws are supported by many scholars as a safety
valve for trade liberalization if domestic manufacturers cannot compete against the imported
products by market rules.
52
However it was criticized by Aggarwal that this tool merely benefits
a few large companies in some selected industries which easily get hurt in case of sudden
import while in a large segment of the goods producing sector where there is a majority of
small and medium sized companies, they are not in a position to use the tool and get
protection.
53
The author comes a conclusion that the political rational cannot justify the

51
Marrakesh Declaration of 15
th
April 1994, para 2.
52
J. Michael Finger and Andrei Zlate, Anti Dumping: Prospect for Discipline from the Doha Negotiations, (2007) 1
- 44 at 9 14, Boston College, http://fmwww.bc.edu/ec-p/wp632.pdf, accessed 31 August 2011; Australian
Chamber of Commerce and Industry, Another Look at Anti Dumping, (2006) 2 CACCI Journal, no.1 9 at 1 - 5,
http://www.cacci.org.tw/Journal/2006%20Vol%202/Another%20Look.pdf, accessed 1 June 2011; Ian Wooton and
Maurizio Zanardi, Trade and Competition Policy: Anti Dumping versus Anti Trust, 1 33 at 5 - 14,
http://homepages.strath.ac.uk/~hbs03116/Research/Trade%20and%20Competition%20Policy%20Final.pdf,
accessed 07 Apr. 11;
Gregory Mankiw and Phillip L. Swagel, Anti Dumping: The Third Rail of Trade Policy, (2005), 107 119 at 108
109, http://www.economics.harvard.edu/files/faculty/40_Dumping%20-
%20Foreign%20Affairs%20JulyAug%202005%20MankiwSwagel.pdf, accessed 26 May 2011.
53
Aradhna Aggarwal, Anti Dumping Protection: Who Gets IT? An Explanatory Analysis of Anti Dumping Use in
the Most Active User Countries, (2007) Working Paper 9, 2, Centre for Trade and Development,
http://www.esocialsciences.com/data/articles/Document1622008540.6715509.pdf, accessed 31 August;
28
WTO Antidumping and Developing Countries A Case Study of Vietnam
presence of antidumping laws because those using the tool do not require it and those who
need it cannot afford this protection.
54

It is certainly of the case that there are no conflict views on where the concept of modern
antidumping policy is borrowed from antitrust policy, hence, there is some overlaps between
them. Antidumping and antitrust both seek to prevent unfairly competitive environment,
thwart distortion market, and deter monopolist through predatory pricing. They are the
instruments of competition policy to target price discrimination behaviour.
55
Subject matter is
the key to distinguish these tools. Therefore, due to the history, the ostensible purpose of
antidumping law is closely tied to antitrust, that is to help ensure competition. While antitrust is
applied to tackle segmented markets by domestic firms, antidumping addresses domestic scale
of foreign companies.
56

From an economic view, price discrimination can be considered as a justification on
antidumping policy.
57
Discriminatory pricing is introduced under a standard economic definition,
described as significantly different product prices are charged to more customers when there
are no significant differences between the costs to the seller of supplying to those customers.
58

Domestic price discrimination happens under a condition of imperfect competition. Lack of fair
competition allows suppliers to set a high price without fear of being competed by other
foreign competitors. Trebilcock and Howse present two economic arguments for prohibiting
domestic pricing discrimination.
59
Firstly, the total output may decrease when the high-priced

54
Ibid.
55
Ian Wooton and Maurizio Zanardi, Trade and Competition Policy: Anti Dumping versus Anti Trust, 1 33 at 11,
http://homepages.strath.ac.uk/~hbs03116/Research/Trade%20and%20Competition%20Policy%20Final.pdf,
accessed 07 Apr. 11;
56
Ibid.
57
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 250 - 253.
58
Ibid.
59
Ibid.
29
WTO Antidumping and Developing Countries A Case Study of Vietnam
market forces out more customer than the lower-priced market attracts. However, the
question about an opposite situation remains in silence. What happens if the number of
customers of the high-priced market is less than the lower-priced market? Secondly, the cost
which the competitors spend on segregating market as well as computing its customers
elasticity of demand and racing for the monopoly position can be invested in product
innovation, plant expansion, or research and development. Obviously, domestic discriminatory
price imposes a higher burden on society than non-discriminatory pricing policy.
International price discrimination occurs when the producer charges a higher price in his home
market due to inelastic demand than the country where he exports to because of the
elasticity.
60
Apart from the condition of the presence of imperfect competition in the country
where the discrimination takes place, one more condition has to be fulfilled if he wants to
differentiate the price of the same product in different markets: international segmentation of
markets.
61
Without any barrier to market access, the openness of the home market might make
the price level out because of import competition. It is argued that if a company engages in
foreign markets and its home market is open, the price differential will induce re-exports of
dumped products to the dumpers home market.
62

However, while domestic discriminatory pricing creates a higher-priced market and a lower-
priced market within the same country, as to the international price discrimination, dumpers
charge the products at a cheaper price in foreign market only. The customers therefore benefit
from lower prices, purchasing more output with the same income. In addition, it is the

60
Mitsuo Matsushita, Thomas J. Schoenbaum and Petros C. Mavroidis, The World Trade Organization: Law,
Practice, and Policy (2
nd
ed, Oxford University Press, New York, 2006), 398 - 399.
61
Aradhna Aggarwal , Anti Dumping Law and Practice: An Indian Perspective, (2002) Working paper 85, 1 68 at
9, Indian Council for Research on International Economic Relations, http://www.icrier.org/pdf/antiDump.pdf,
accessed 07 Apr. 11.
62
See Mastel in Aradhna Aggarwal, Anti Dumping Law and Practice: An Indian Perspective, (2002) Working paper
85, 1 68 at 9, Indian Council for Research on International Economic Relations,
http://www.icrier.org/pdf/antiDump.pdf, accessed 07 Apr. 11.
30
WTO Antidumping and Developing Countries A Case Study of Vietnam
dumpers home country, not the foreign market, bears the cost of selling products at too low
price. The authors prove that the social cost which the importing country suffered from
imposing antidumping duties on dumped products outweighs any gain to producers who are
thereby protected.
63
As a consequence, it implies that international price discrimination is
unjustifiable for antidumping policy.
However, a core reason for the existence of antidumping legislation is addressing the concern
of predatory pricing.
64
Mankiw and Swagel believe that antidumping law was created to attack
this practice
65
which was also explained as an extreme form of price discrimination.
66

Scholars opinions have reached a consensus of this justification. The fear that unduly low-
priced products temporarily offered by the foreign competitors probably knock domestic
producers out of the market is justified for the existence of antidumping. Amongst supporters is
Jacob Viner, who suggested that dumping was presumptive evidence of abnormal and
temporary cheapness that provided low-priced product in the short term but set a higher price

63
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 252 - 253.
64
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 253; Reid M. Bolton, Anti Dumping and Distrust: Reducing Anti Dumping Duties under the WTO through
Heightened Scrutiny, 1 36, at 7, http://www.boalt.org/bjil/documents/BoltonArticle.pdf, accessed 26 May 2011;
Gregory Mankiw and Phillip L. Swagel, Anti Dumping: The Third Rail of Trade Policy, (2005) 107 119 at
108,http://www.economics.harvard.edu/files/faculty/40_Dumping%20-
%20Foreign%20Affairs%20JulyAug%202005%20MankiwSwagel.pdf, accessed 26 May 2011, Another Look at Anti
Dumping, (2006) 2 CACCI Journal, no.1 9 at 6,
http://www.cacci.org.tw/Journal/2006%20Vol%202/Another%20Look.pdf, accessed 1 June 2011
65
Gregory Mankiw and Phillip L. Swagel, Anti Dumping: The Third Rail of Trade Policy, (2005), 107 119 at 108
109, http://www.economics.harvard.edu/files/faculty/40_Dumping%20-
%20Foreign%20Affairs%20JulyAug%202005%20MankiwSwagel.pdf, accessed 26 May 2011.
66
Ian Wooton and Maurizio Zanardi, Trade and Competition Policy: Anti Dumping versus Anti Trust, 1 33 at 12,
http://homepages.strath.ac.uk/~hbs03116/Research/Trade%20and%20Competition%20Policy%20Final.pdf,
accessed 07 Apr. 11;
31
WTO Antidumping and Developing Countries A Case Study of Vietnam
in the long term when the dumper successfully drives other sellers from the market and acquire
market power.
67
Predatory pricing was also described by Robert Willig as follow:
Low-priced exporting that is geared to driving rivals out of business in order to
obtain monopoly power in the importing market. The exporters losses from
supplying its good at the low price are expected to be more than recouped later,
under the high prices made possible by the monopoly position resulting from the
irreversible exit of the rivals for the importing market.
Similarly, Trebilcock and Howse, Matsushita, Schoenbaum and Mavroidis, Wooton and Zanardi
claim that predatory dumping is the only rationale of adopting antidumping legislation.
68
They
assert the need of antidumping law is the occurrence of predatory pricing since it drives other
competitors out of the market by offering customers at a too low price then increase the price
after gaining the monopoly to recoup the expenses before.
Lester and Mercurio
69
require a distinct line should be drawn between dumping and predatory
pricing/price discrimination because the second group is regulated by antitrust (competition)

67
Reid M. Bolton, Anti Dumping and Distrust: Reducing Anti Dumping Duties under the WTO through Heightened
Scrutiny, 1 36, at 7, http://www.boalt.org/bjil/documents/BoltonArticle.pdf, accessed 26 May 2011; Ahmed
Nawaz Hakro

and Syed Hasanat Shah, Economic Rationale, Trade Impact and Extent of Antidumping A Case
Study of Pakistan, (2007) 12 The Lahore Journal of Economics, no.1, 77 98 at 80,
http://www.lahoreschoolofeconomics.edu.pk/JOURNAL/V-
12No1/04%20Ahmed%20Nawaz%20and%20Hasnat%20Shah.pdf, accessed 31 August 2011.
68
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 258; Mitsuo Matsushita, Thomas J. Schoenbaum and Petros C. Mavroidis, The World Trade Organization:
Law, Practice, and Policy (2
nd
ed, Oxford University Press, New York, 2006), 433; Ian Wooton and Maurizio Zanardi,
Trade and Competition Policy: Anti Dumping versus Anti Trust, 1 33 at 12,
http://homepages.strath.ac.uk/~hbs03116/Research/Trade%20and%20Competition%20Policy%20Final.pdf,
accessed 07 Apr. 11;
69
Simon Lester, World Trade Law, Text, Materials and Commentary (Hart Publishing, Great Britain, 2008), 465
466.
32
WTO Antidumping and Developing Countries A Case Study of Vietnam
policy, not antidumping law, therefore their objectives and purposes are not alike. For example,
on the one hand, selling products below cost is addressed by both antidumping laws and
antitrust (competition) laws.
70
On the other hand, subject matters of those laws are really
different. While antidumping policy aims to protect domestic industries from unfair
competition, that is, focusing on economic agents,
71
antitrust (competition) laws emphasize
on competitive environment, that is, processes ahead of agents.
72
Therefore, the latter gives
the priority to customers interests which have been largely ignored by the former which is
mainly concerned with producers interests.
73
The key objective of competition is protecting
consumers from anti-competitive behaviour, low prices is not a concern when they threaten to
other producers. It becomes a danger when and only when it harms consumers.
74
Simply,
competition law is a respond to monopoly which is derived from predatory pricing. In contrast,
under the WTO antidumping regime, exporting at a lower price in considered as dumping in
case it causes material injury to domestic producers. As a result, the protected subject of
antidumping policy under the WTO is member states own enterprises rather than the
customers.
75


70
Ibid.
71
Australian Chamber of Commerce and Industry, Another Look at Anti Dumping, (2006) 2 CACCI Journal, no.1
9 at 4, http://www.cacci.org.tw/Journal/2006%20Vol%202/Another%20Look.pdf, accessed 1 June 2011.
72
Ibid.
73
Ibid.
74
Aradhna Aggarwal, Anti Dumping Protection: Who Gets IT? An Explanatory Analysis of Anti Dumping Use in
the Most Active User Countries, (2007) Working Paper 9, 3 - 4, Centre for Trade and Development,
http://www.esocialsciences.com/data/articles/Document1622008540.6715509.pdf, accessed 31 August;
75
Ibid., Raj Bhala, Rethinking Anti dumping Law, (1995) 29 Washington Journal International Law & Economic, 1
144 at 11 - 12, College of William and Mary Law School, Scholarship Repository Faculty Publication
http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1845&context=facpubs&sei-
redir=1#search="rethinking+anti+dumping+law", accessed 07 April 7, 2011.
33
WTO Antidumping and Developing Countries A Case Study of Vietnam
According to Mankiw and Swagel,
76
the original purpose of antidumping laws is against
predatory pricing by preventing the sale of foreign goods notion at less than fair value.
However, the concept of fair value nowadays is divorcing from its first objective: protecting
customers from anti competition. Since one of the targets of the WTO creation is anti
protectionism, the WTO antidumping policy also aims to create a level playing field. Hence the
notion of fair value, not customer protection is the subject which it approaches towards.
This explains why Article VI was criticized as the most important mistake in the GATT founding
documents and antidumping duties currently: a barrier to trade that potentially benefits an
individual country acting alone (or certain interest groups within that country) but in the end
hurts everyone when applied universally.
77

Dumping does not always happen in an illegal manner. There are many rational scenarios
where the dumper charges a price on the importing market less than he does on his home
market. Selling products under cost production might occur due to either the
competitive/marketing strategy of a company or a significant decline in demand. Another
scenario can come up with is initial production requires costly input. To put the merchandizes
on the market, the producer cannot introduce them with the normal price. The company thus
accepts the loss at the beginning when selling products at below cost with the hope that the
goods will be consumed promptly, leading to capital return. When product is mass-produced
and sold, the profit can be earned later.
78
Or dumping can happen when the company first
introduces a product in a new market to create market for the product. Likewise, the

76
N. Gregory Mankiw and Phillip L. Swagel, Anti Dumping: The Third Rail of Trade Policy, (2005), 107 119 at 109
http://www.economics.harvard.edu/files/faculty/40_Dumping%20-
%20Foreign%20Affairs%20JulyAug%202005%20MankiwSwagel.pdf, accessed 26 May 2011.
77
Reid M. Bolton, Anti Dumping and Distrust: Reducing Anti Dumping Duties under the WTO through Heightened
Scrutiny, 1 36 at 11, http://www.boalt.org/bjil/documents/BoltonArticle.pdf, accessed 26 May 2011
78
Mitsuo Matsushita, Thomas J. Schoenbaum and Petros C. Mavroidis, The World Trade Organization: Law,
Practice, and Policy (2
nd
ed, Oxford University Press, New York, 2006), 397.
34
WTO Antidumping and Developing Countries A Case Study of Vietnam
consumers of a high-income country might have to pay more than those on a lower-income
country.
One more economic justification for antidumping duties given by Reid M. Bolton is the fear of
strategic dumping.
79
This type of dumping happens, firstly, when the exporters are protected
from competition at home, and secondly, the industry requires high Research & Development
cost or large economies scale. Because domestic producers are not capable of operating the
same economies, they might be driven out of business. However this justification is also
rejected with the reason of rarity of actual practice as well as its inability to detriment the
consumers on the foreign country.
However the WTO anti dumping mechanism does not explicitly indicate which kind of dumping
is prohibited under its regulations. There is no distinction between predatory dumping and
other types of dumping. Although pricing predation is regulated by both antidumping and
antitrust, over time domestic antitrust has been evolved by requiring predatory intent as a key
part of predatory-pricing dumping,
80
international antidumping law just needs the evidence of
price below cost or of below the price charged for a like product in the dumpers home market.
Furthermore, predatory dumping would justify antidumping duties, the chance for the
occurrence of international predatory pricing is very extremely thin. Conditions for a firm to be
a predator are extremely stringent because it must satisfy several criteria, according to
Aggarwal.
81
They must possess potential capacity in domestic dominance as well as global
dominance. For example, their financial resources should be substantial enough to incur initial
losses with the hope that return will be recouped when they achieve the monopoly position

79
Reid M. Bolton, Anti Dumping and Distrust: Reducing Anti Dumping Duties under the WTO through Heightened
Scrutiny, 1 36 at 8, http://www.boalt.org/bjil/documents/BoltonArticle.pdf, accessed 26 May 2011.
80
Ibid.
81
Aradhna Aggarwal , Anti Dumping Law and Practice: An Indian Perspective, (2002) Working paper 85, 1 68,
Indian Council for Research on International Economic Relations, http://www.icrier.org/pdf/antiDump.pdf,
accessed 07 Apr. 11.
35
WTO Antidumping and Developing Countries A Case Study of Vietnam
then arbitrarily set up the high prices. He states that it is the most important condition to
identify a would-be predator. Other conditions are imperfection in the capital market, credible
threat of predation and the last one, market segmentation. Trebilcock and Howse reach the
same conclusion with a comment that the gains from predatory pricing at the global scale are
more uncertain and its net effects are thus ambiguous because the predator has to compete
not only with domestic competitors but also against foreign importers.
82
To successfully dump
on the importing market, the exporter must face a more elastic demand in the importing
countrys market and possess the market power in their home markets.
83
In other words,
customers benefits in the foreign markets are born by the consumers in the domestic markets
where they are charged a higher price by the exporters. The chance for a producer to be a
monopoly in the international scale is relatively small.
84
.
85
Therefore, predatory pricing cannot
be sufficient enough for the existence of antidumping.
86


82
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 253 256.
83
Raj Bhala, Rethinking Anti dumping Law, (1995) 29 Washington Journal International Law & Economic, 1 144
at 10, College of William and Mary Law School, Scholarship Repository Faculty Publication
http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1845&context=facpubs&sei-
redir=1#search="rethinking+anti+dumping+law", accessed 07 April 7, 2011.
84
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 254; Raj Krishna, Anti Dumping in Law and Practice, World Bank Policy Research Working Paper No. 1823
September 1998, 1 38 at 7,
http://elibrary.worldbank.org/docserver/download/1823.pdf?expires=1306423217&id=id&accname=guest&check
sum=21F4DC07307C71AFB1BFE36381E1022D, accessed 26 May 2011.

86
Brian Hindley, Antidumping Policy in the EU: A Comment to the Green Paper on Trade Defence Instruments, 1
10 at 4, European Centre for International Political Economy, http://www.ecipe.org/publications/ecipe-policy-
briefs/antidumping-policy-in-the-eu/PDF, accessed 31 August 2011.
36
WTO Antidumping and Developing Countries A Case Study of Vietnam
It is worth noting that the possibility of which predatory dumping happens is not zero
87

regardless of its rarity.
88
However, some of the scholars believe that the there is no evidence
produced to show the existence of predatory pricing case. The data of empirical studies made a
contribution to prove the low frequency of international predation when the number of
antidumping cases committed to be predatory is almost zero.
89
To sum up, the most important
justification for antidumping protection has been proven to be highly unlikely to ever take
place.
90
Predation is extremely convincible reasoning, in theory, for the creation of antidumping,
but it has never been to exits.
It can be seen that all of the justifications for the existence of antidumping policy have been
challenged. Even the core central of antidumping protection predatory pricing - becomes
inconvincible due to its rare happening. The massive use of this instrument creates substantial
distortions with negative effect on trade. As a result, reforming of antidumping laws has been

87
See Hindley Brian, The Economics of Dumping and Anti Dumping Action: Is There any Baby in the Bath Water
Tharakan, PKM, Ed, Policy Implications of Anti Dumping Measures 25 at 29 (Elsevier Science Publishers B.V.,
Amsterdam 1991) in Raj Krishna, Anti Dumping in Law and Practice, World Bank Policy Research Working Paper
No. 1823 September 1998, 1 38,
http://elibrary.worldbank.org/docserver/download/1823.pdf?expires=1306423217&id=id&accname=guest&check
sum=21F4DC07307C71AFB1BFE36381E1022D, accessed 26 May 2011.
88
Ibid.
89
Michael J. Trebilcock and Robert Howse, The regulation of International Trade (3
rd
ed, Routledge, Great Britain,
2005), 255.
90
Reid M. Bolton, Anti Dumping and Distrust: Reducing Anti Dumping Duties under the WTO through Heightened
Scrutiny, 1 36 at 8, http://www.boalt.org/bjil/documents/BoltonArticle.pdf, accessed 26 May 2011, Raj Krishna,
Anti Dumping in Law and Practice, World Bank Policy Research Working Paper No. 1823 September 1998, 1 38
at 7,
http://elibrary.worldbank.org/docserver/download/1823.pdf?expires=1306423217&id=id&accname=guest&check
sum=21F4DC07307C71AFB1BFE36381E1022D, accessed 26 May 2011.
37
WTO Antidumping and Developing Countries A Case Study of Vietnam
initiated for a better system to of disincentivizing frivolous antidumping disputes while
nevertheless keeping the forum open for true dumping accusation.
91

3. Nature of Dumping
The term dumping can be described in different ways. Matsushita, Schoenbaum and
Mavroidis explain this activity as exporting too low priced-product to an importing country for
the purpose of unfair competition or simply due to cheap input cost.
92
The simple nature of the
dumping activity can be described by Raj Bhala: If the other fellow sells cheaper than you, it is
called dumping. Course, if you sell cheaper than him, that is mass production.
93
Waincymer
Aggarwal, and Krishna

named dumping as price-discrimination between national markets by
which products in the importing market than are selling at a lower price than in the dumpers
home market.
94

Its simplification causes confusion when assessing an allegedly dumped sale because
conducting an unduly low price transaction is not always illegitimate. The ADA introduced that
dumping is a practice by which products introduced into the commerce of another country at
less than its normal value, if the export price of the product exported from one country to

91
Ibid., 11.
92
Mitsuo Matsushita, Thomas J. Schoenbaum and Petros C. Mavroidis, The World Trade Organization: Law,
Practice, and Policy (2
nd
ed, Oxford University Press, New York, 2006), 396.
93
Raj Bhala, Rethinking Anti dumping Law, (1995) 29 Washington Journal International Law & Economic, 1 144
at 3, College of William and Mary Law School, Scholarship Repository Faculty Publication
http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1845&context=facpubs&sei-
redir=1#search="rethinking+anti+dumping+law", accessed 07 April 7, 2011
94
Jeff Waincymer, Implications for Antidumping and Countervailing, (2001), 4
http://www.apec.org.au/docs/waincymerfta.PDF, accessed 3 September 2011; Aradhna Aggarwal, Anti Dumping
Protection: Who Gets IT? An Explanatory Analysis of Anti Dumping Use in the Most Active User Countries, (2007)
Working Paper 9, 1, Centre for Trade and Development,
http://www.esocialsciences.com/data/articles/Document1622008540.6715509.pdf, accessed 31 August; Raj
Krishna, Anti Dumping in Law and Practice, World Bank Policy Research Working Paper No. 1823 September
1998, 1 38 at 6.
38
WTO Antidumping and Developing Countries A Case Study of Vietnam
another is less than the comparable price, in the ordinary course of trade, for the like product
when destined for consumption in the exporting country.
95
According to Aggarwal, dumping
was classified into two types: price dumping international price discrimination, and cost
dumping selling at prices below per unit cost.
96
From the wording of the Agreement, Aggarwal
is of the view that the WTO antidumping policy regulates price dumping only even though the
ADA does not explicitly state which kind of dumping should be covered. It is also worth noting
that dumping activities are not inhibited by the WTO although the ADA condemned it. The
phenomenon becomes unlawful if a causal link between material injuries or a threat of material
injury to a domestic industry and the existence of dumped products can be proved. When this
situation occurs, the ADA allows the importing country to impose an antidumping duty to offset
the price advantage enjoyed by the exporter.
97
There are three steps need to go through to
conclude an alleged dumped product (i), it is sold under the normal value on the exporters
home market (ii), the dumped product must cause the material injury or threaten to cause
injurious effect to the domestic industries, and (iii) the causal connection must be established
between the dumped product and injury.
Considering dumping as an unfairly competitive behaviour, the WTO allows its member states
to impose a duty equivalent to the differential price, called dumping margin, therefore, the
extra tariff can adjust the favourable pricing and mitigate the adverse impact on the domestic
producer. Calculation of the dumping margin is based on the difference between the export
price and the normal value.
98



95
The ADA, Art. 2(1).
96
Aradhna Aggarwal , Anti Dumping Law and Practice: An Indian Perspective, (2002) Working paper 85, 1 68 at
5 Indian Council for Research on International Economic Relations, http://www.icrier.org/pdf/antiDump.pdf,
accessed 07 Apr. 11.
97
The 1994 GATT, Art. 6(1).
98
The ADA, Art. 2(1)
39
WTO Antidumping and Developing Countries A Case Study of Vietnam
Dumping margin = normal/home value export price

The imposition on dumped product is not allowed to exceed the dumping margin. Such a lesser
duty can be applied if an antidumping investigating authority assesses that it is adequate to
remove the injury to the domestic industry. Therefore, determining the normal value and the
export price plays a key role in an antidumping investigation because whether the margin of
dumping is high or low wholly depends on the calculation of prices. Article 2.1 of the ADA
simply states that the export price is the price which a product is exported from one country to
another. While constructing the export price does not meet difficulty because it is well
documented in various transaction documents,
99
establishing the normal value causes a lot of
controversy. The normal value is referred to the selling price or the comparable price in the
country of export.
100
There are two sources of normal value, the primary source based on
domestic sales of the home market of the exporting country on the condition that the volume
of home market sales must be not less than five percent of the volume sold to the importing
country.
101
It is usually called Five Percent Market Viability Test. The secondary source includes
third country price and constructed normal value in case that the there is no comparable price
at the exporting country. The ADA has not given any criteria of both methods which the
investigating authority should rely on as an alternative to the use of home market price. The
Agreement is also silent on interpretation of how to determine an appropriate third country.

99
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005),
14, http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
100
Lonias Ndlovu, An Assessment of the WTO compliance of the Recent Regulatory Regime of South Africas
dumping and anti dumping law, (2010) 5 Journal of International Commercial Law and Technology, no.1, 29 40
at 30.
101
The ADA, footnote 2.
40
WTO Antidumping and Developing Countries A Case Study of Vietnam
However, in practice, the authorities have used constructed value more frequently than third
country sales.
102

4. Zeroing Practice
One of the achievements of the Uruguay Round is the creation of the WTO DSU which replaced
for the precursor - the GATT dispute settlement which was criticized to be ineffective to resolve
conflicts between member states.
103
In spite of regarding as a crown jewel of the WTO, the DSU
exposes its shortcomings in a series of disputes regarding the zeroing matter in the
antidumping matter.
104
Zeroing refers to a practice by which national antidumping authorities
treat non-dumped sales as having a dumping margin of a zero when the export price exceeds
the normal value, and thereby preventing non-dumped sales from offsetting dumped sales.
105

As mentioned before, the existence of dumping is determined by comparing the export price to
the price of sales of same product in the exporters domestic market (normal value). Dumping
exists if the export price is less than the normal value. However, when the opposite scenario
occurs, i.e. the export price exceeds the normal value; the investigating authorities treat such
transactions as undumped, labelling a zero value instead of a negative value. Using zeroing
magnifies the chance of finding dumping cases and inflates the dumping margins calculated
because it transforms the nature of transactions and devalues the high-valued transactions. The
magic of zeroing can be illustrated by a following example:


102
Rudiger Wolfrum, Peter-Tobias Stoll, and Michael Koebele, WTO Trade Remedies (Nijhoff Publisher, Leiden,
2008), 27.
103
Chad P. Brown and Thomas J. Prusa, US Anti Dumping: Much Do about Zeroing, (2010), Policy Research
Working Paper 5352, http://econweb.rutgers.edu/prusa/cv/45%20-%20much%20ado%20about%20zeroing.pdf, 2,
accessed 15 Jul. 11.
104
Ibid., 3.
105
Rj Bhala and David A. Grantz, WTO Case Review 2001, (2002) 19 Arizona Journal of International and
Comparative Law, no. 2, 457 646 at 526 http://www.ajicl.org/AJICL2010/4.27.1WTO%20Review.pdf, accessed 15
Jul. 11
41
WTO Antidumping and Developing Countries A Case Study of Vietnam
Table 2 A Illustration of Zeroing Practice Using
Transaction Export
trans.
Domestic
trans.
Export
WA
Domestic
WA
Without zeroing With zeroing

WA - WA Trans - Trans WA - Trans Trans Trans WA Trans
1. 50 100 200 200 0 50 150 50 150
2. 100 150 200 200 0 50 100 50 100
3. 300 200 200 200 0 -100 -100 0 0
4. 225 250 200 200 0 25 -25 25 0
5. 325 300 200 200 0 -25 -125 0 0
Dumping
amount
0 0 0 125 250
Dumping
margin
0% 0% 0% 12.5% 25%

42
WTO Antidumping and Developing Countries A Case Study of Vietnam
From the table, in the first scenario (without zeroing), a finding of no dumping could be
concluded because zeroing is not applied no matter which method of comparison is being used.
Under either the transaction-to-transaction comparison or weighted-average-to-weighted-
average comparison, the positive dumping is offset by the negative dumping (50 + 50 + 25 = -
100 + (-25); 150 + 100 = -100 + (-25) + (-125)). For the product as a whole, the total dumping is
thus zero as the non-dumped transactions are taken consideration. In the second scenario, the
dumping margin of 12.5% and 25% for the same transactions, in contrast, are found when
zeroing is being generated. Using zeroing methodology makes the big difference between two
situations because the products exported from another country are frequently found guilty of
dumping on the importing market when zeroing is applied.
However, the above example does not reflect the real life factual situation where it is almost
impractical for the same transaction on both the domestic market and the exporting market
sold with the same value. In the less symmetrically perfect practice, the weighted-average-to-
transaction comparison combined with zeroing method will not always worse than the use of
transaction-to-transaction method because the latter can lead to extremely arbitrary
results.
106
However, it virtually results in the higher dumping margin than the weighted-
average-to-weighted-average comparison because the latter, simply, averages the prices of
various transactions before the final dumping amount is calculated. Therefore, the difference in
price is automatically offset at an averaging step whereas under the weighted-average-to-
transaction comparison or transaction-to-transaction comparison, the negative dumping
amounts are treated as zeros, only one transaction is dumped, the dumping finding will be
concluded for all non-dumped transactions. The adverse impact of zeroing derives from
overstating dumping margins because it denies considering fully the non-dumped products or
negatively dumped transactions.
107
The practice of zeroing creates an artificial increase in the

106
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005),
54, http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
107
Edwin Vermulst and Daniel Ikenson, Zeroing Under the WTO Anti-Dumping Agreement: Where Do We Stand?,
(2007) 2 Global Trade and Customs Journal, no. 6, 231 242 at 231,
43
WTO Antidumping and Developing Countries A Case Study of Vietnam
calculation of dumping margins because it allows antidumping duties to be applied even where
no actual dumping is taking place. The analogy often is invoked is that of getting a ticket for
speeding: If you drive too fast and are ticketed for speeding, you cannot claim credit for the
times that you drove within the speed limit.
108

This practice was first challenged by India in the EC-Bed Line case
109
whereby ECs practice of
zeroing was concluded to violate a WTO members obligation by the AB. Despite this ruling, the
US has continued applying this measure for evaluating antidumping duties in a series of
antidumping investigations on the ground of there is no rule in WTO agreements that
specifically address this matter, therefore, using zeroing is permissible.
110
Neither the GATT nor
the ADA rules on zeroing, hence it hardly convinces the US to stop zeroing in its methodology.
Basically, article 2.4.2 of the ADA provides two ways of comparison for the calculation of
dumping margin: transaction-to-transaction comparison or weighted-average-to-weighted-
average comparison. In case that the authorities find both of two ways cannot produce the
correct result, they are allowed to apply an exception provided by the ADA, that is weighted-
average-to-transaction comparison. The third method became known as simple zeroing which
will be differentiated from model zeroing.
111


http://www.vvgb-law.com/publications/Edwin%20Vermulst/Zeroing%20Under%20the%20WTO%20Anti-
Dumping%20Agreement.pdf, accessed 13 Aug. 11
108
Ibid., 233; Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The
USA, 2005), 19, http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
109
European Communities Antidumping Duties on Imports of Cotton-Type Bed Linen from India (EC Bed Linens)
WT/DS141/AB/R.
110
Daniel Behn, The Weakness of Good Faith Rules in WTO Trade Remedies Dispute: Excuse for Judicial Activism
or Invitation for Procedural Abuse, (2010) 1 17 at 8 - 9, University of Dundee,
http://www.dundee.ac.uk/cepmlp/gateway/index.php?news=30891, accessed 18 September 2011.
111
Edwin Vermulst and Daniel Ikenson, Zeroing Under the WTO Anti-Dumping Agreement: Where Do We Stand?,
(2007) 2 Global Trade and Customs Journal, no. 6, 231 242 at 233
44
WTO Antidumping and Developing Countries A Case Study of Vietnam
Model zeroing, a variation of the simple zeroing becomes a major irritant to countries
targeted in antidumping actions.
112
It is a practice whereby price comparison are made basically
on a model-by-model (or product-code-number by product-code-number) basis before a
weighted average dumping is calculated. A product-code-number will be given on the feature
or characteristic which has an impact on the price of product under investigation. The dumping
amount will be firstly calculated for each code-number and then the weighted average margin
dumping is finally released.
113
Thus model zeroing is an intermediate step where only the
positive dumping margins are taken into consideration, ignoring the negative results from other
models. As a consequence, model zeroing facilitates the dumping findings since dumping
happens even when only one model is dumped while the others are not.








http://www.vvgb-law.com/publications/Edwin%20Vermulst/Zeroing%20Under%20the%20WTO%20Anti-
Dumping%20Agreement.pdf, accessed 13 Aug. 11
112
Edwin Vermulst and Daniel Ikenson, Zeroing Under the WTO Anti-Dumping Agreement: Where Do We Stand?,
(2007) 2 Global Trade and Customs Journal, no. 6, 231 242.
http://www.vvgb-law.com/publications/Edwin%20Vermulst/Zeroing%20Under%20the%20WTO%20Anti-
Dumping%20Agreement.pdf, 235.
113
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005),
57, http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
45
WTO Antidumping and Developing Countries A Case Study of Vietnam
Table 3 Model Zeroing
Model Export trans. Domestic trans. Unit dumping Model zeroing
A 100 50 -50 0
B 100 100 0 0
C 100 100 0 0
D 100 100 0 0
E 100 150 50 50
Total 500
Amount dumping 0 50
Dumping % 0.0% 10%
Edwin Vermulst and Daniel Ikenson, Zeroing Under the WTO Anti-Dumping Agreement: Where
Do We Stand? (2007) 2 Global Trade and Customs Journal, no. 6, 231 242 at 233,
http://www.vvgb-
law.com/publications/Edwin%20Vermulst/Zeroing%20Under%20the%20WTO%20Anti-
Dumping%20Agreement.pdf, accessed 13 Aug. 11.

Once again, using zeroing, under any form, also facilitates the chance of dumping findings and
fabricate the margins as the authority of investigation refuses to include the non-dumped
transaction as a part of exportation.
There are opposite views of whether zeroing is justifiable or not. While some believe that
zeroing now is flawed, the others back with it in a case of weighted-average-to-transaction
46
WTO Antidumping and Developing Countries A Case Study of Vietnam
method, where price comparison is impossible to make.
114
Notwithstanding, there is a
consensus of scholars opinion about prohibition against using zeroing of negative dumping
margins between different models in weighted-average-to-weighted-average comparison.
115

Brown and Prusa point out four insights gleans from the application of zeroing. Firstly, zeroing
exaggerates the margin as mentioned earlier. Secondly, zeroing changes the prices in the
exporting market as they actually were, for instance, the last two transactions were treated as
it was in the third sale. Thirdly, zeroing is driven by price variation over the same period
because if the foreign firms charge the same price for 5 different transactions, i.e. 200, there is
no dumping matter. Fourthly, zeroing might be the factor creating the difference between no
dumping (or a de minimis margin) and a positive dumping margin.
116
It is evident that the
exporters and domestic producers pursue contradictory interests in a dumping investigation.
Whereas the latter does their best utmost to prove of the occurrence of dumping phenomenon
and upon a confirmative conclusion, another effort shall be made to maximize the dumping
margins as much as they can, the formers objective is to minimize the margin as low as
possible since a very low antidumping duty order will not have considerable effect on their
business. Zeroing amounts to a more than 13% of all WTO Panel investigation and almost 20%
of all WTO AB reports.
117
The fact that the WTO AB body devoted most of the time for the
zeroing matter than any other single issues in the WTO transferred it to a full-time zeroing
body.
118


114
Antidumpingpublishing.com, Global Anti-Dumping Briefing, Issue 2, July 26, 2007, 1 7 at 4 5,
http://www.antidumpingpublishing.com/uploaded/documents/CSDocuments/GAD%20Briefing%202%20%28Jul%2
007%29.pdf, accessed 19 September 2011.
115
Ibid., 5
116
Chad P. Brown and Thomas J. Prusa, US Anti Dumping: Much Do about Zeroing, (2010), Policy Research
Working Paper 5352, http://econweb.rutgers.edu/prusa/cv/45%20-%20much%20ado%20about%20zeroing.pdf, 17,
accessed 15 Jul. 11.
117
Ibid., 26.
118
Ibid., 5.
47
WTO Antidumping and Developing Countries A Case Study of Vietnam
5. Vietnamese Antidumping Regulations
Although Vietnam did not become an official WTO member until January 2007, the negotiation
to join the WTO actually had been activated since January 1995 with the submission of
membership application.
119
In order to bring domestic legislation more consistent with WTO
regulations, the Government of Vietnam in the Legislature XI of the National Assembly of the
Socialist Republic of Vietnam of the period 2002 2007, promulgated as well as amended a
huge amount of legislation which had not been mentioned before or had existed but with a few
details or had been inconsistent with the WTO.
120
Almost currently core legal codes setting up
framework for the race to WTO accession were introduced at that time: Law on Intellectual
Property No.50/2005/QH11, Civil Code No.33/2005/QH11, Law on Residential Housing
No.56/2005/QH11, Law on Land No.13/2003/QH11, Commercial Law No.36/2005/QH11, The
Decree against Money Laundering No.74/2005/ND-CP Antidumping regime was also adopted
in that Legislature.
In 2004, the first Vietnamese comprehensive regulation on antidumping was enacted by the
Standing Committee of National Assembly, The Ordinance No. 20/2004/PL UBTVQH against
Dumping of Imported Goods into Vietnam. A series of laws came into effect subsequent to the
Ordinance: the Decree no.90/2005/ND-CP Making Detailed Provisions for Implementation of
Ordinance against Dumping of Imported Goods into Vietnam on 11 July 2005, The Circular no.
106/2005/TT-BTC Guiding the Collection, Remittance and Refund of Anti-dumping Tax, Anti-
Subsidy Tax and Securities for Payment of Anti-dumping Tax or Anti-subsidy Tax. Although the
Ordinance 20 has the highest legal validity and provides the general framework for Vietnamese
antidumping system and the Decree 90 and the Circular 106 are in the lower positions, the
Decree and the Circular gives more details to implement the Ordinance in practice.

119
The Process of Vietnams WTO joining, A Speech by Viet Nams vice minister of trade, Luong Van Tu at the 36
th

Annual Conference of International Poultry Council in 31 October 2005, Hanoi,
http://www.nciecly.gov.vn/index.nciec?1030, accessed 3 July 2011.
120
Vietnamese laws are adopted by the National Assembly of the Socialist Republic of Vietnam at each legislature
which holds a meeting every five years.
48
WTO Antidumping and Developing Countries A Case Study of Vietnam
In recognition of the importance of speedy reaction to antidumping cases against Vietnamese
products, The Council Dealing with Cases of Trade Remedies was established by the Decree
no.04/2006/ND-CP on 1 January 2006 on Functions, Duties, Powers and Organizational
Structure of Council Dealing with Cases of Antidumping, Anti Subsidy and Safeguard to directly
handle with the investigations initiated by domestic producers of the exporting markets.
Moreover, the Council also plays as a bridge between the private and the public sectors to
boots cooperation and information exchange in an antidumping investigation.
Generally, the Vietnamese antidumping provisions are consistent with the WTO policy since the
regulators literally copied some principal concepts to domestic laws. An instance is dumping
definition. Goods dumped into the Vietnamese market can be characterized as being sold at a
price lower than the normal price.
121
Although this article does not mention the term the
ordinary course of trade when defining dumping, this concept can be found in the next
following provision regarding normal price.
122
Since the WTO does not give any guidance on
what amounts to the ordinary course of trade even though they treat sales below cost as
not being in the ordinary course of trade
123
, Vietnamese law-makers do not either attempt to
close the existing loophole. Another example is the interpretation of like product, one of the
four most important concepts of the WTO antidumping policy.
124
Compared with the wording
of Article 2.(6) of the ADA which describes like product as a products which is identical, i.e.
alike in all respects to the product under consideration, or in the absence of such a product,
another product which, although not alike in all respects, has characteristics closely resembling
those of the product under consideration
125
, the Ordinance 20 defines the term as goods
which have the same physical characteristics as the good which are the subject of the request

121
The Ordinance No. 20/2004/PL UBTVQH against Dumping of Imported Goods into Vietnam, Art. 3 (1).
122
Ibid., Art. 3 (2).
123
The ADA, Art.2.2.1.
124
Edwin Vermulst, The WTO Anti-Dumping Agreement: A Commentary, (Oxford University Press, The USA, 2005),
9, http://fds.oup.com/www.oup.co.uk/pdf/0-19-927707-9.pdf, accessed 1 June 2011.
125
The ADA, Art 2.(6).
49
WTO Antidumping and Developing Countries A Case Study of Vietnam
for application of antidumping measures or, if there are no such goods, goods which have many
of the same fundamental characteristics as the goods which are the subject of the request for
application of antidumping measures.
126
Admittedly, the content of like product of the
Ordinance is closely modelled on Article 2.(6) of the ADA. Other examples can be found in the
countrys antidumping legal system: concepts of normal price, export price, dumping margin
calculation, or the provisions of de minimis clause or negligible volume of dumped goods.
Regarding petition procedure of filing an antidumping case, Vietnamese regulators, however,
have a different approach from WTO policy-makers. Both of Vietnam and WTO antidumping
regimes require the petition application must be made by or on behalf of the domestic
industry
127
but the threshold of how accounts for a domestic industry are various between
them. WTO states that in order to represent for the domestic industry, collective output of the
producers who submit the application must make up more than 50 per cent of the total
production of the domestic industry. Furthermore no investigation shall be initiated if the
quantity of domestic producers supporting the application less than 25 per cent of the total
production produced by the domestic industry.
128
Article 8(1) of the Ordinance 20, on the other
hand, does not indicate any specific level. Such an organization or individual is deemed to be

126
The Ordinance No. 20/2004/PL UBTVQH against Dumping of Imported Goods into Vietnam, Art. 2(6).
127
The ADA, Art.5(4), The Ordinance No. 20/2004/PL UBTVQH against Dumping of Imported Goods into Vietnam,
Art. 8(1).
128
The ADA, Art. 5(4):
An investigation shall not be initiated pursuant to paragraph 1 unless the authorities have determined, on the basis
of an examination of the degree of support for, or opposition to, the application expressed
128
by domestic producers
of the like product, that the application has been made by or on behalf of the domestic industry.
128
The
application shall be considered to have been made "by or on behalf of the domestic industry" if it is supported by
those domestic producers whose collective output constitutes more than 50 per cent of the total production of the
like product produced by that portion of the domestic industry expressing either support for or opposition to the
application. However, no investigation shall be initiated when domestic producers expressly supporting the
application account for less than 25 per cent of total production of the like product produced by the domestic
industry.
50
WTO Antidumping and Developing Countries A Case Study of Vietnam
represented a domestic industry if two following conditions are fulfilled. Firstly, their
production of goods must account for at least 25% of the total amount of similar goods
produced by the domestic producers. Secondly, such that quantity and the volume of goods
produced by the other domestic producers supporting the file requesting application of
antidumping measure must be greater than those of domestic producers that oppose the
request.
129

Vietnamese law-makers converted the negative provision of the WTO into the positive
requirement of the domestic antidumping law to easily conduct an investigation. This
conversion, coupled with the second condition, clearly creates more chances for filling a
petition than the requirement of the ADA. By setting out such a regulation the Government of
Vietnam demonstrates strong protectionism of its domestic industries. Although until now
Vietnam has not conducted any antidumping investigation when facing surge of importation,
Article 8 of the Ordinance No.20 leaves the great likelihood to the petitioners to successfully file
a complaint. This regulation can be challenged by importers in the future before the Panel
because of its inconsistence with the WTO antidumping policy. Therefore, a concern that
Vietnam should make a comprehensive review of the antidumping system and bring it in
conformity with the WTO requirements should be paid a proper attention.

129
The Ordinance No. 20/2004/PL UBTVQH against Dumping of Imported Goods into Vietnam, Art. 8(1):
An organization or individual submitting a file requesting application of anti-dumping measures shall be deemed to
represent a domestic manufacturing industry when it satisfies both of the following conditions:
(a) The volume, quantity or value of goods manufactured or represented by such organization or individual
accounts for at least twenty five (25) per cent of the total volume, quantity or value of similar goods of
the domestic manufacturing industry;
(b) The volume, quantity or value of goods stipulated in sub-clause (a) of this clause and of domestic
manufacturers supporting the submission of the file requesting application of anti-dumping measures is
greater than the volume, quantity or value of similar goods of domestic manufacturers opposing the
request for application of anti-dumping measures.
51
WTO Antidumping and Developing Countries A Case Study of Vietnam
Basically, Vietnam antidumping regime emphasizes necessary and sufficient conditions for
applicability of the antidumping measure. That is the authority has to determine the dumped
product into Vietnam and more importantly, the dumping margin must be verified.
130

Furthermore, the (potentially) material injury of the national industry caused by the dumping
phenomenon and the occurrence of dumped products must have a direct link.
131
Copies of the
Vietnamese antidumping regime from the WTO policy can be explained that this field is
relatively new in Vietnam compared with other member states. Borrowing core concepts from
international standards, on the one hand, does not contradict the common requirement of
antidumping law, it ensures the consistence between the local and global laws. On the other
hand, the transposition reveals the Government of Vietnams failure in domesticating
international legal standards into its own regulations.

A Lesson from South Africa
Regarding reform of domestic antidumping regulation, South Africa can be considered as a
good reference. The development of South Africas antidumping regime is an example of how a
domestic law became more consistent with WTO obligations.
132
South Africa is one of the
earliest users of trade remedies on the world when the Custom Tariff Act including antidumping,
subsidies and countervailing measures was introduced in 1914
133
and the first antidumping
duties are believed to be imposed on 1921.
134
It was also one of the most prolific users of anti-
dumping measure with more than 818 investigations undertaken between 1948 and October

130
Ibid., Art. 6.(1).
131
Ibid., Art. 6.(2).
132
Niel Joubert, The Reform of South Africas Anti-Dumping Regime,
http://www.wto.org/english/res_e/booksp_e/casestudies_e/case38_e.htm, accessed 30 June 2011.
133
Ibid.
134
Lonias Ndlovu, An Assessment of the WTO Compliance of the Recent Regulatory Regime of South Africas
Dumping and Anti-dumping Law, (2010) 5 Journal of International Commercial Law and Technology, no. 1, 29
40 at 29.
52
WTO Antidumping and Developing Countries A Case Study of Vietnam
2001.
135
In spite of being a founding member of the WTO and even though all the WTO
agreements were ratified by the South African Parliament, interestingly, WTO legal documents
do not form part of South African public law because they are not yet to be promulgated.
136

In 1995, the new definition of dumping was changed by The Board Amendment Act to be
consistent with the definition of dumping of the ADA, and certain new concepts such as
normal value was introduced, notwithstanding procedural framework or regulations for the
conducting of anti-dumping investigations was not provided.
137
Finally the restructuring of the
anti-dumping regime finished with publication of the International Trade Administration Act on
22 January 2003, a new body, the International Trade Administration Committee (ITAC), for the
administration of trade remedies within South Africa, was set up.
138
The new development of
South African antidumping policy has offered the stakeholders a more active role in
participating in an anti dumping investigation against imported products into the domestic
market. A lesson is recommended for other developing country is the consultation between the
government and the private sector will ensure the latters concerns be taken into consideration
because the business, not the government, trades. The role of governmental organizations
should not be underestimated, not only are they the policy-makers but also they keep
necessary information which the stakeholders cannot anticipate without governments support.
The more intercommunication the public and private sector have, the more efficient of an
antidumping policy is.



135
Niel Joubert, The Reform of South Africas Anti-Dumping Regime,
http://www.wto.org/english/res_e/booksp_e/casestudies_e/case38_e.htm, accessed 30 June 2011.
136
Ibid.
137
Ibid.
138
Ibid.
53
WTO Antidumping and Developing Countries A Case Study of Vietnam
CHAPTER FOUR:
A REPONSE FROM DEVELOPING COUNTRIES: A CASE STUDY OF VIETNAM
1. The Vietnam US relation
The communist victory in South Vietnam in 1975 led to the reunification of Vietnam but
concurrently ended the diplomatic and economic relations between Vietnam and the US. Since
that time the US maintained a trade embargo against Vietnam for 19 years which froze bilateral
economic relations.
139
Normalization process between two countries was not initiated until the
Clinton Administration.
140
His authoritys renewal of the trade embargo with less restriction on
13 September 1993
141
could be seen as the first positive attitude to unfreeze the bilateral
relation. Subsequent to the renewal is the full lift of the embargo by an order of an end on 3
February 1994,
142
opening a new chapter for the Vietnam US relation. However, since the US
refused to grant to Vietnam the most-favored-treatment status, goods from Vietnam faced the
higher tariffs than those from other countries.
143
With an effort to improve normalization,
following the elimination of the trade embargo were the settlement of diplomatic and private

139
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 473, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11; Mark E. Manyin,
US Vietnam relations: Background and Issues for Congress, (2008) Congress Research Service Report for
Congress 1 29 at 5, http://www.au.af.mil/au/awc/awcgate/crs/rl33316.pdf, accessed 05 Sep. 11.
140
Do Thanh Cong, Catfish, Shrimp, and The WTO: Vietnam Loses Its Innocence, (2001) 43 Vanderbilt Journal of
Transnational, 1235 1246 at 1242; Tu Van BInh, Before and After the Catfish War: Market Analysis, CAS
Discussion paper No 50, http://webh01.ua.ac.be/cas/PDF/CAS50.pdf, accessed 18 June 2011.
141
Mark E. Manyin, US Vietnam relations: Background and Issues for Congress, (2008) Congress Research
Service Report for Congress 1 29 at 5, http://www.au.af.mil/au/awc/awcgate/crs/rl33316.pdf, accessed 05 Sep.
11.
142
Do Thanh Cong, Catfish, Shrimp, and The WTO: Vietnam Loses Its Innocence, (2001) 43 Vanderbilt Journal of
Transnational, 1235 1246 at 1242; Tu Van BInh, Before and After the Catfish War: Market Analysis, CAS
Discussion paper No 50, http://webh01.ua.ac.be/cas/PDF/CAS50.pdf, accessed 18 June 2011.
143
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003), 23, Princeton University
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11
54
WTO Antidumping and Developing Countries A Case Study of Vietnam
property claims and the opening of liaison offices in Washington and Hanoi on January 1995.
144

Eight months later, the diplomatic relation between two countries was completely established
by the opening of embassies in Washington and Hanoi. In 1998 the waiver of Jackson Vanik
Amendment added to the normalization process and smoothed the way for Overseas Private
Investment Corporation and Export Import Bank support for the US business in Vietnam.
145

However the landmark of the US Vietnam economic relation is the signing of the BTA in 2000
which came into effect in December 2001. This also could be seen as a crucial preparatory step
for Vietnam to join the WTO because the BTA was designed on the model of WTO Agreements.
Many regulations on national treatment and intellectual property protection, for example, of
the BTA are extracted from the relevant passages in the WTO Agreements.
146
As a result, the
presence of BTA largely reduced average US tariffs on Vietnamese imports from 40 percent to
around 3 4 percent. In exchange Vietnam agreed to lower its trade barriers by 25 30 percent
on goods, to grant market access for services, and to formulate regulations on protection of
intellectual property rights.
147
The only major exception is the lack of dispute settlement
mechanism. The BTA just provides a Joint Committee on Development of Economic and Trade
Relation which is commented as an ineffective stratagem of asymmetric power relation to
resolve disputes between two parties.
148
This was quickly demonstrated through a petition
against Vietnam catfish in the first month after the start of the Agreement.

144
Ibid.
145
Mark E. Manyin, US Vietnam relations: Background and Issues for Congress, (2008) Congress Research
Service Report for Congress 1 29 at 5, http://www.au.af.mil/au/awc/awcgate/crs/rl33316.pdf, accessed 05 Sep.
11.
146
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003), 23, Princeton University
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11
147
Ibid.
148
Ibid., Michael R. Czinkota, IIkka A. Ronkainen, International Marketing, (8
th
ed, Thomson Higher Education, USA,
2007), 157.
55
WTO Antidumping and Developing Countries A Case Study of Vietnam
That Vietnam satisfied stringent criteria set by the US made a great contribution to accession
to the WTO, the Agreement was hailed as committing Vietnam to sweeping economic
reform.
149
On the other hand it was not warmly greeted by some commentators because the
event was predicted to bring the negative consequences for the US industry when removal of
high tariffs would encourage a large volume of exportation from Vietnam into the US.
150
The
economic relation between Vietnam and the US was not regarded as fully normalize until the
USs grant of permanent normal trade relation status to Vietnam in 2006 which replaced the
most-favored-nation status in US trade.
151
Previously Vietnam had merely been entitled
conditional normal trade relation in that it was subjected to annual Presidential and
congressional review under the US Trade Act of 1974s Jackson Vanik provisions, which govern
trading activities with non-market economies.
152


2. Vietnam and Non-Market Economy Status
The market/non market economy under the WTO framework was an aftermath of the period
when the world economy was divided into two separate systems: centrally-planned system
economies and market-based economy countries.
153
Since the GATT (WTO) was designed by

149
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 477, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11.
150
Ibid., 479.
151
Mark E. Manyin, US Vietnam relations: Background and Issues for Congress, (2008) Congress Research
Service Report for Congress 1 29 at 8 - 11, http://www.au.af.mil/au/awc/awcgate/crs/rl33316.pdf, accessed 05
Sep. 11.
152
Ibid., 9.
153
Adam McCarty and Carl Kalapesi, The Economics of the Non Market Economy Issue: Vietnam Catfish Case
Study, (2003), 4, http://www.eldis.org/fulltext/vietnam.pdf, accessed 7 September 2011; Nguyen Son, Nguyen
Son Tra and Le Thanh Lam, Non Market Economy (NME) in Vietnams WTO Accession Commitments, (2007), 8
10 http://www.adetef.org.vn/website/documents/Etudes%20compl%C3%A9mentaires/NCIEC/Etude%20NME%20-
%20FSP%20I%20-%20EN.pdf, accessed 7 September 2011
56
WTO Antidumping and Developing Countries A Case Study of Vietnam
market economies for market economies,
154
a status for centrally-planned economy countries
was established. However this distinction, excluding the exceptional case of North Korea, is no
longer valid.
155
The non-market economies concept has appeared in the antidumping
legislation since the 1970s when calculation of production costs was unlikely to be reliable
156

because it was believed that the intervention of governments distorted reflection of the
markets supply and demand relationship and thus, were rejected to account for market value
of products. However, the application of the status today is criticized as non-tariff barrier,
allowing the application of different, less transparent, and potentially discriminatory practices
in the determination of antidumping.
157
Therefore antidumping investigating authorities will
use prices of a surrogate country as a benchmark for calculating and determining the
dumping margin.
Vietnam agreed in its Protocol of Accession to the WTO that from the date of being an official
member in January 2007 till 31 December 2018 other members bringing antidumping actions
against Vietnamese products could use the Non Market Economy methodology for calculating
antidumping duty.
158


154
See Polouektow A. (2002) in Adam McCarty and Carl Kalapesi, The Economics of the Non Market Economy
Issue: Vietnam Catfish Case Study, (2003) 4, http://www.eldis.org/fulltext/vietnam.pdf, accessed 7 September
2011;
155
Adam McCarty and Carl Kalapesi, The Economics of the Non Market Economy Issue: Vietnam Catfish Case
Study, (2003), 4, http://www.eldis.org/fulltext/vietnam.pdf, accessed 7 September 2011; Nguyen Son, Nguyen
Son Tra and Le Thanh Lam, Non Market Economy (NME) in Vietnams WTO Accession Commitments, (2007), 8
10,
http://www.adetef.org.vn/website/documents/Etudes%20compl%C3%A9mentaires/NCIEC/Etude%20NME%20-
%20FSP%20I%20-%20EN.pdf, accessed 7 September 2011
156
Ibid.
157
Ibid.
158
Protocol of Accession (Nov. 15, 2006) and Working Party Report (Oct. 27, 2006), para. 255,
http://www.wto.org/english/thewto_e/acc_e/completeacc_e.htm#vnm, accessed 7 September 2011.
57
WTO Antidumping and Developing Countries A Case Study of Vietnam
1. Several Members noted that Viet Nam was continuing the process of
transition towards a full market economy. Those Members noted that under those
circumstances, in the case of imports of Vietnamese origin into a WTO Member,
special difficulties could exist in determining cost and price comparability in the
context of anti-dumping investigations and countervailing duty investigations.
Those Members stated that in such cases, the importing WTO Member might find
it necessary to take into account the possibility that a strict comparison with
domestic costs and prices in Viet Nam might not always be appropriate.
2. The representative of Viet Nam confirmed that, upon accession, the
following would apply Article VI of the GATT 1994, the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
("Anti-Dumping Agreement") and the SCM Agreement shall apply in proceedings
involving exports from Viet Nam into a WTO Member consistent with the
following:
(a) In determining price comparability under Article VI of the GATT 1994 and
the Anti-Dumping Agreement, the importing WTO Member shall use either
Vietnamese prices or costs for the industry under investigation or a methodology
that is not based on a strict comparison with domestic prices or costs in Viet Nam
based on the following rules:
(i) If the producers under investigation can clearly show that market
economy conditions prevail in the industry producing the like product with regard
to the manufacture, production and sale of that product, the importing WTO
Member shall use Vietnamese prices or costs for the industry under investigation
in determining price comparability;
(ii) The importing WTO Member may use a methodology that is not based on
a strict comparison with domestic prices or costs in Viet Nam if the producers
under investigation cannot clearly show that market economy conditions prevail
58
WTO Antidumping and Developing Countries A Case Study of Vietnam
in the industry producing the like product with regard to manufacture,
production and sale of that product.


(d) Once Viet Nam has established, under the national law of the importing
WTO Member, that it is a market economy, the provisions of subparagraph (a)
shall be terminated provided that the importing Member's national law contains
market economy criteria as of the date of accession. In any event, the provisions
of subparagraph (a)(ii) shall expire on 31 December 2018. In addition, should
Viet Nam establish, pursuant to the national law of the importing WTO Member,
that market economy conditions prevail in a particular industry or sector, the
non-market economy provisions of subparagraph (a) shall no longer apply to that
industry or sector.


This unfavourable treatment derived from centrally-planned economy of Vietnam which existed
since Soviet Union. The Renovation (Doi Moi) in 1986 and especially the market-oriented
reforms in 1989 marked a turning point in the history of Vietnam's economic development.
159

However the incomplete transition to the market economy can be seen the greatest
disadvantage when antidumping and, recently, countervailing actions are brought against
Vietnamese exports, particular those initiated by two of the Vietnams main trading partners,
the USA and the EU. Being applied the non-market economy status to determine difference
price between the home value and export price exaggerated the dumping margin because it

159
Thanh, Vo Tri, Vietnam's Trade Liberalization and International Economic Integration: Evolution, Problems, and
Challenges, (2005) ASEAN Economic Bulletin,
http://www.allbusiness.com/finance/458985-1.html#ixzz1XG1qXhjD, accessed 7 September 2011.
59
WTO Antidumping and Developing Countries A Case Study of Vietnam
denies competitive advantages of Vietnam. For example, in the Catfish case the margin amount
was up to 44%,
160
a shocking number bedeviling both the Government of Vietnam and
Vietnamese exporters at that time. Similarly, the final determination of dumping of the US ITC
applied the highest rate, Vietnam-wide government rates of 76.11% to two of mandatory
respondents and to some of other firms that did not complete quantity and value
questionnaires which were sent to them.
161
However, for those who applied for separate rates
were imposed a simple average of the rates alleged in the petition, 52.3%.
162
This proves that
the status of non-market economy deters Vietnam products from being treated equally.
Whereas the Most-Favoured-Nation and Nation Treat clauses require foreign products receive
no less favourable treatment than domestic and foreign-originated like products, the status, in
contrast, is an implicit exception of discrimination.

3. Certain Frozen Fish Fillets from Vietnam - The Catfish War
It should be noted that the Catfish War did not start on June 28, 2002 when a petition was filed
to the Commission and Commerce by the US Association of CFA and by individual US catfish
processors alleging that an industry in the US is materially injured and threatened with material
injury by reason of less than fair value imports of certain frozen fillets from Vietnam. Actually
it began one year before. Vietnam started exporting catfish to the US since 1996 upon the end
of the trade embargo.
163
According to the USA Harmonized Tariff Schedule, imported frozen
catfish fillets from countries without normal trade relations are subject to a tariff of 4.4 percent

160
US International Trade Commission, Polyethylene Retail Carrier Bags from Indonesia, Taiwan, and Vietnam,
April 2010, Investigation Nos. 701TA462 and 731TA11561158 (Final), I6,
http://www.usitc.gov/publications/701_731/pub4144.pdf, accessed 7 September 2011.
161
Ibid.
162
Ibid.
163
Irene Brambilla, Guido Porto, and Alessandro Tarozzi Adjusting to Trade Policy: Evidence from US Antidumping
Duties on Vietnamese Catfish, National Bureau of Economic Research, Working Paper Series, Working Paper
14495, 6, http://www.nber.org/papers/w14495, accessed 31 August 2011.
60
WTO Antidumping and Developing Countries A Case Study of Vietnam
per kilogram.
164
Nevertheless, the signing of BTA led to reduction of tariffs and the growth of
promising industry for Vietnam, which resulted in a surge of Vietnamese catfish into the US
market, strongly shaking the US catfish industry. Vietnam imported products substantially
skyrocketed from 0.16% of the market share in 1996 to almost 20% in 2002 with an annual
average growth rate of 157%.
165
Vietnam catfish burgeoning business proved the predication
before.
The war began in the first month after the BTA came into effect upon the ink was not dry on
that agreement.
166
Lobbying to change a label policy and refusing to negotiate any
compromise of that regulation is the first step of US protectionism. At the beginning,
Vietnamese exporters named the products as White River Cobbler, China Sole or Swai
when bringing to the frozen fillets to American consumers. Later they were labelled as
catfish.
167
Being aware of serious competition of Vietnam product, the CFA lobbied a
legislation of prohibition of the label catfish on catfish which does not belongs to Ictaluridae
family a family of fish that lives only in North America.
168
Their main argument was that the
basa and tra fish from Vietnam (Pangasius bocourti and Pangasius hypothalamus) were
different from the so-called US catfish (Ictaluridae) regardless of that the database provided by
international organizations confirmed over seven hundred fish species with catfish in the

164
Tu Van BInh, Before and After the Catfish War: Market Analysis, CAS Discussion paper No 50, 23,
http://webh01.ua.ac.be/cas/PDF/CAS50.pdf, accessed 18 June 2011;
165
Ibid., 13 15.
166
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003) Princeton University, 27
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11
167
Bao Anh Thai, An Analysis of Lesson from learned from Catfish and Shrimp Anti Dumping Cases,
http://www.baolawfirm.com.vn/dmdocuments/an_anylysis_of_lessons_learned_from_antidumping_case.pdf, 1
42 at 22, accessed 18 Jul. 11
168
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 480, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11;
61
WTO Antidumping and Developing Countries A Case Study of Vietnam
name.
169
The issue was criticized as purely by domestic policy we have no leverage by one
Vietnamese negotiator.
170

In spite of ceaseless effort from the Vietnams side, labelling policy was finally adopted as part
of the 2002 Farm Act.
171
Undoubtedly, the purpose of the Act adoption is to strongly protect
the domestic producers as they could not compete against the Vietnam catfish providers. Given
no choice but to accept the measure, Vietnam producers must label their product under
Vietnamese name, i.e. tra and basa fish. The event was titled on Washington Post, When Is
a Catfish not a Catfish? When It Comes from Vietnam and Cuts Into US Sales.
172
Some
commentators believe that if Vietnam had been membership in the WTO at that time and
brought the labelling regulation to the WTO, a panel likely would have found in favour of
Vietnam.
173
Unfortunately, Vietnam was on the way into the WTO in 2002, therefore, the ability
of resorting to the WTO dispute settlement mechanism was undoable. Furthermore, the lack of

169
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003) Princeton University, 26
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11
170
Ibid.
171
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 480, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11;
172
Philip Brasher, When Is a Catfish not a Catfish? When It Comes from Vietnam and Cuts Into US Sales, Hill Says,
Washington Post, (Washington, Dec 27, 2002).
173
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 472, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11; Christian L. Davis,
Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and Vietnam, (2003) Princeton
University, 25 - 27
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11; Peter
Drahos , The Bilateral Web of Trade Dispute Settlement, presented at the WTO Dispute Settlement and
Developing Countries: Use, Implications, Strategies, Reforms, University of Wisconsin , Madison , May 20-21, 2005,
17 18.
62
WTO Antidumping and Developing Countries A Case Study of Vietnam
a comprehensive chapter on dispute settlement of the BTA drove Vietnam to a cul-de-sac,
there was nowhere for Vietnam to turn for the third party mediation.
Not only did combat on the legal and politic confronts Vietnam but also faced with an attack
from means of communication network. US marketing practitioners did not miss the chance to
prove their skills, professionalism, and effectiveness against a weaker counterpart by
propagandizing an advertising campaign operated by the US catfish farmers and sponsored by
the CFA in order to distort consumers awareness of Vietnamese catfish. Tra and basa fish
were described as slippery catfish wannabe, they were probably not even sporting real
whiskers floating around in Third World Rivers nibbling on who knows what.
174
Vietnamese
catfish was distorted to be contaminated by lingering Agent Orange sprayed by the US during
the world.
175
US consumers were warned that Never trust a catfish with a foreign accent.
176

Interestingly, the label policy hopelessly deterred consumption Vietnam product on the US
market. The US ITC admitted that, while the labeling law address marketing practices, they do
not reserve commercial ties that exist in a market which responds to price.
177
Under customers

174
Robert J. Carbaugh, International Economics, (12
th
edn, South Western Cengage Learning, USA, 2009), 168.
175
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003) Princeton University, 25
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11; Amalia
R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004) 13 Pacific
Rim Law & Policy Journal Association, no.2, 471 502 at 480, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11; Do Thanh Cong,
Catfish, Shrimp, and The WTO: Vietnam Loses Its Innocence, (2001) 43 Vanderbilt Journal of Transnational, 1235
1246 at 1242; Bao Anh Thai, An Analysis of Lesson from learned from Catfish and Shrimp Anti Dumping Cases,
http://www.baolawfirm.com.vn/dmdocuments/an_anylysis_of_lessons_learned_from_antidumping_case.pdf, 1
42 at 11 - 13, accessed 18 Jul. 11.
176
Ibid.
177
US International Trade of Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA
1012, (Final), August 2003, 12.
http://www.usitc.gov/publications/701_731/pub3617.pdf, accessed 12 Sep. 11
63
WTO Antidumping and Developing Countries A Case Study of Vietnam
pressure, some of states still served basa as southern fried fish.
178
Failure in restrain import
from Vietnam by the domestic remedies, the US Catfish industry switched to the international
remedy by filing an antidumping petition on June 2002. According to the final determination
report, dominance of Vietnam catfish of the import total quantity and the decline of US
producers share coupled with the cheaper price of such imports were the reasons to conclude
of dumping on the US market.
From the chart below, it can be seen that the catfish importation from Vietnam increased from
12.5 million pounds in 2000 to 26 million pounds in 2001, and to 36 million pounds in 2002,
accounting for almost 20 percent of the US market.
179
At the same time US producers market
share declined from 90.7% in 2000 to 83% in 2001 and then to 80.1% in 2002.
180





178
Ibid.
179
Ibid, 13.
180
Ibid.
64
WTO Antidumping and Developing Countries A Case Study of Vietnam
Figure 7 US Catfish Consumption Quantity From 2000 to 2002

Source: The authors calculation based on data provided of US International Trade of
Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA 1012,
(Final), August 2003,
http://www.usitc.gov/publications/701_731/pub3617.pdf, accessed 12 Sep. 11


US became the largest trading partner of Vietnamese frozen fillets when approximately 50% of
the total Vietnamese production of catfish was being sold to the US.
181
From the chart below, it
is observed that Vietnam frozen fillet was absolutely dominant the US market when 98.4% of
the 670,000 pounds of frozen boneless catfish fillet exported to the US were from Vietnam.
182
It

181
Irene Brambilla, Guido Porto, and Alessandro Tarozzi Adjusting to Trade Policy: Evidence from US Antidumping
Duties on Vietnamese Catfish, National Bureau of Economic Research, Working Paper Series, Working Paper
14495, 6, http://www.nber.org/papers/w14495, accessed 31 August 2011.
182
US International Trade of Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA
1012, (Final), August 2003, 13.
80.1
83
90.7
19.6
16.4
8.4
0.3
0.6
0.8
0 20 40 60 80 100 120
2002
2001
2000
Producers's share
Vietnamese importers' share
All other countries' share
65
WTO Antidumping and Developing Countries A Case Study of Vietnam
means that the direct and only competitor with the domestic producers on the US catfish fillet
market was Vietnam alone. The overwhelming, however, to some extent, put Vietnam in a
disadvantageous position in the antidumping war.

Figure 8 US Total Catfish Import Quantity From 2000 to 2002.

Source: The authors calculation based on data provided of US International Trade of
Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA 1012,
(Final), August 2003.
http://www.usitc.gov/publications/701_731/pub3617.pdf, accessed 12 Sep. 11

During the period under examination (from 200 to 2002), the US ITC indicated significant price
underselling by the imported merchandise as compared with the price of domestic like
products of the US and the effect of imports also depressed the domestic prices to a significant

http://www.usitc.gov/publications/701_731/pub3617.pdf, accessed 12 Sep. 11
91.3
96.4
98.4
86%
88%
90%
92%
94%
96%
98%
100%
2000 2001 2002
All other countries
Vietnam
66
WTO Antidumping and Developing Countries A Case Study of Vietnam
degree. Based on pricing data, the authority proved that Vietnam catfish had been undersold
the domestic product by margins from 9.2 percent to 38.6 percent which depressed the US
catfish price as well.
183

It is interesting to note that while in the labelling lobby the US industry made its effort to
distinguish the Vietnam catfish and US catfish, in the antidumping investigation, in contrast,
tra and basa fish were concluded to be the like product with the US product, hence they
can be interchangeable, substitutable.
184
Turning basa back to catfish were criticized to serve
for only one master, its protectionism, said by the President of the American Seafood
Distributors Association.
185
In other words, Catfish War, from the labelling policy until the
antidumping filing, is an example of how a wealthy country counteracts by all means to the
serious competition from a poorer trading partner in the day of liberalization.
Not being recognized as a market-economy country was a big hurdle when the US DOC refused
to use the Vietnams home value to calculate dumping margin. Bangladesh and India were
chosen as surrogate countries which reflected incorrectly true price of Vietnam catfish
leading to the exaggeration of the dumping margin. The ITC came to a conclusion that the
domestic producing frozen catfish fillets..., is threatened with material injury import by reason
of subject imports from Vietnam that alleged sold in the US at less than fair value.
186

On June 17, 2003, the DOC imposed heavy antidumping margins on Vietnamese catfish
products. The margin ranged from 36.84 percent to 52.90 percent for the compulsory

183
Ibid., 15.
184
Ibid., 12 13.
185
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003) Princeton University, 29
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11;
186
US International Trade of Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA
1012, (Final), August 2003, 17
http://www.usitc.gov/publications/701_731/pub3617.pdf, accessed 12 Sep. 11.
67
WTO Antidumping and Developing Countries A Case Study of Vietnam
respondents, 44.66 percent for producers who answered the investigation questionnaire, and
63.88 percent for all other Vietnamese catfish producers and exporters.
187

The dumping charges have shocked the Vietnam Association of Seafood Exporter and Producers,
the Vietnamese Government and practically all those familiar with the catfish industry in
Vietnam, including the US Embassy and a number of USA businesses based in Vietnam.
188
This
decision was strongly condemned as an example of how wealthy countries preach the gospel
of free trade when it comes to finding market for their manufactured market, but become
highly protectionist when their farmers face competition.
189
This statement reinforced the
protective purpose of antidumping policy as being accused before.
In the first administrative review in 2006, a final antidumping margin of 6.81 percent was
imposed on Vinh Hoang Company.
190
Another company, Can Tho Agricultural and Animal
Product Import Export Company (CATACO) withdrew its participation in the investigation; then
it was punished with a separate rate of 80.88 percent because of having not full cooperation.
Other Vietnamese companies were assigned a groundless rate which is called industry-wide
rate of 63.88 percent.
191
The second administrative review happened in 2007 where one
respondent, QVD Food Company, Ltd, (QVD) was imposed an antidumping margin of 21.23
percent and the rate for CATACO and Vietnam-wide entities remained the same.
192
In the third
administrative review in 2008, while QVD and East Sea Seafood Joint Venture Co., Ltd, received
an antidumping margin of zero, the punishment on CATACO and the rest of Vietnam catfish

187
Ibid., I-2.
188
Tu Van BInh, Before and After the Catfish War: Market Analysis, CAS Discussion paper No 50, 8,
http://webh01.ua.ac.be/cas/PDF/CAS50.pdf, accessed 18 June 2011;
189
Robert J. Carbaugh, International Economics, (12
th
edn, South Western Cengage Learning, USA, 2009), 168.
190
Do Thanh Cong, Catfish, Shrimp, and The WTO: Vietnam Loses Its Innocence, (2001) 43 Vanderbilt Journal of
Transnational, 1235 1246 at 1243.
191
Ibid., 1244.
192
Ibid.
68
WTO Antidumping and Developing Countries A Case Study of Vietnam
producers were not withdrawn.
193
In the fourth administrative review, which occurred in 2009,
QVD, Agifish, and Anvifish were assigned a separate rate of 0.52 percent. Once again, the US
ITC continued with the rate of 63.88 percent for the other importers.
194

According to the latest review report, Vietnam importations, increasingly occupied the US share
market, from 12.2 percent in 2003 to 25.1 percent in 2008.
195
Concurrently, the domestic
industrys share market was considerably narrowed from 87.1 percent in 2003 to 54.1 percent
in 2008.
196
Even the whole US catfish industry attempted to assault the Vietnam Catfish product,
either by labelling regulation or the trade remedy measure, Vietnam tra or basa strongly
gets a foothold in the US market.










193
Ibid.
194
Ibid.
195
US International Trade of Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA
1012, (Review), June 2009, 13
http://www.usitc.gov/publications/701_731/pub4083.pdf, accessed 19 Aug. 11.
196
Ibid.
69
WTO Antidumping and Developing Countries A Case Study of Vietnam
Figure 9 US Catfish Consumption Quantity from 2000 to 2002.

Source: The authors calculation based on data provided of US International Trade of
Commission, Certain Frozen Fish Fillets From Vietnam, Investigation No. 731 TA 1012,
(Review), June 2009,
http://www.usitc.gov/publications/701_731/pub4083.pdf, accessed 19 Aug. 11.

Throughout the original investigation and forth administrative reviews, it is worth noting that
the increase of importation and decease of the US domestic production at the same time can
be used as an evidence to conclude of dumping occurrence. Undoubtedly protectionism has
been displayed in the Catfish War when the US catfish farmers, under the support of the US
CFA, politic mechanism and means of communication, assaulted catfish imports from Vietnam
in order to protect the domestic producers from severe foreign competition. In other words,
antidumping law, rather than a trade remedy against unfair trade, nowadays, has become a
non-tariff barrier hindering the fair competitive behaviour.


54.1
57.3
61.8
77.2
80.2
87.1
80.1
83
90.7
25.1
23.1
24.3
17.8
18.4
12.2
19.6
16.4
8.4
20.8
19.6
13.9
5
1.4
0.7
0.3
0.6
0.8
0 20 40 60 80 100 120
2008
2007
2006
2005
2004
2003
2002
2001
2000
Producers's share
Vietnamese importers' share
All other countries' share
70
WTO Antidumping and Developing Countries A Case Study of Vietnam
Figure 10 The US Catfish Share Market From 2000 to 2008

Source: The authors calculation based on data provided of US International Trade of
Commission, US International Trade of Commission, Certain Frozen Fish Fillets From Vietnam,
Investigation No. 731 TA 1012, (Review), June 2009,
http://www.usitc.gov/publications/701_731/pub4083.pdf, accessed 19 Aug. 11

Time plays an important role for respondents in an antidumping case which Vietnamese
companies did not have much in the Catfish War. There were only one and a half months
between the date of closing catfish labelling case on May 13, 2002 and the date petitioners
filed its AD petition to ITC and DOC on June 28, 2002. As it was the first time Vietnam respond
to an antidumping case, they were completely lack of expertise. Answering very technical
questions required a lot of time which Vietnam did not have at that moment. The DOC officials
had to travel to Vietnam to help the companies on answering the questionnaire.
197

Furthermore, the difference between Vietnamese and America business practice such as

197
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003) Princeton University, 30
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11
0
10
20
30
40
50
60
70
80
90
100
2000 2001 2002 2003 2004 2005 2006 2007 2008
Producers's share
Vietnamese importers' share
All other countries' share
71
WTO Antidumping and Developing Countries A Case Study of Vietnam
accounting standards also caused difficulties during the investigation. Not all respondents
realized the importance of close cooperation with the investigation authority. As a result, only
eleven companies were recognized as being fully cooperative and they received separate rates
accordingly.
198
Other companies which were considered by the DOC as having failed to
cooperate had Vietnam-wide rates on them, which were much higher than the AD rates of the
cooperative ones. However, David claimed that it was an unfair decision, since the lower rate
would apply to cooperative firms which inherently were big companies, whereas the higher
rate, Vietnam rate was imposed on most of the small Vietnam catfish producers who had
lacked the information or resources to participate in the investigation.
199
The latter, in contrast,
are more vulnerable and least likely undersell their product but, ironically were accused of
dumping.
4. Certain Frozen Warmwater Shrimp from Vietnam the US - Shrimp case
(DS404)
4.1 An Overview of the Dispute
Protectionism continued escalating when immediate after the Catfish War on 31 December
2003 Ad Hoc Shrimp Trade Action Committee, an association of shrimp farmers in eight
southern states of US Gulf Mexico shrimp of the US filed anti-dumping petition against six
countries Brazil, China, Ecuador, India, Thailand and Vietnam.
200
Along with the Catfish case
this action was criticized as jeopardizing not only the Vietnam US relation but also the

198
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 472, http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11.
199
Christian L. Davis, Do WTO Rules Create a Level Playing Field? Lessons from the Experience of Peru and
Vietnam, (2003) Princeton University, 30-31
http://www.princeton.edu/~cldavis/files/davis_WTO_and_developing_countries.pdf, accessed 12 Sep. 11
200
B. Bhattarcharyya, The Indian Shrimp Industry Organizes to Fight the Threat of Anti-Dumping Action, World
Trade Organization, http://www.wto.org/english/res_e/booksp_e/casestudies_e/case17_e.htm, accessed 13
August 2011.
72
WTO Antidumping and Developing Countries A Case Study of Vietnam
similarly future situated countries that want to set up a bilateral trade relation with the US.
201

The petition accused the producers coming from those countries of dumping the farmed shrimp
in the USA market.
202
Six countries occupied 74% of shrimp imports in the US market and their
importation had significantly increased within 2 year, 2000 2002 from 466 million lb to 650
million lb and the prices declined by 28% in the previous three years.
203
On 21 January 2004 the
USDOC announced the initiation of anti-dumping investigations against the six countries. After
being notified by the USDOC of its decision on initiation, on 17 February 2004 the ITC
announced its decision that there was an evidence that the US shrimp industry is materially
injured or threatened with material injury by imports, allegedly at less than fair value, from the
six identified countries. As a result, the DOC continued with its investigations and gave its
preliminary determination on 28 July 2004.
204


A Lesson of Cooperation and Coordination between Governments and Private Sectors
India and Its Response
In the meantime, the countries facing the risk of being imposed an antidumping duty started
raising their voices to protest the US DOCs decision.
205
In response to the possibility of being
applied the trade remedy, India carried out a series of actions to prevent the extra tariff on
their shrimp producers.
206
Close cooperation between the Marine Products Export

201
Amalia R. Walton, Catfish Wars: Vietnams Fight for Free Trade in the US Court of International Trade, (2004)
13 Pacific Rim Law & Policy Journal Association, no.2, 471 502 at 472 - 473,
http://digital.law.washington.edu/dspace-
law/bitstream/handle/1773.1/698/13PacRimLPolyJ471.pdf?sequence=1, accessed 19 Aug. 11.
202
Ibid.
203
Ibid.
204
Ibid.
205
B. Bhattarcharyya, The Indian Shrimp Industry Organizes to Fight the Threat of Anti-Dumping Action, World
Trade Organization, http://www.wto.org/english/res_e/booksp_e/casestudies_e/case17_e.htm, accessed 13
August 2011.
206
Ibid.
73
WTO Antidumping and Developing Countries A Case Study of Vietnam
Development Authority (MPEDA) a government body, and the Seafood Exporters Association
of India (SEAI) - a private trade body, effectively fostered the fight against a discriminatory and
unjust decision of the US DOC to the Indian shrimp industry. With the fear that a severe
damage caused by the antidumping duty would happened to the Indian shrimp industry like
what had happened to Vietnam Catfish , both of the organizations actively engaged in the
investigation from the start and always kept a very close eye on every step. In order to
distinguish the difference between the Indian shrimp and the US sea-caught shrimp, the SEAI
indicated two main reasons why Indian shrimp had been cheaper. Firstly, Indian imported
shrimp into the US market was absolutely various from the local product because Indias
shrimp exports are predominantly of black tiger and scampi varieties which are not cultivated in
the United States.
207
Secondly, India pointed out that the investment on Shrimp industry in
India is less costly than in the US because fishing industry in the United States requires major
investment while in India shrimp capture is carried out with a very low level of capital and
requiring hardly any investment.
208
India not only reinforced the internal cooperation but also
sought external support from other countries labelled to have dumped into the US market. The
strong coordination brought pressure to the investigating authority which had an impact on the
final decision of the antidumping investigation. Consequently, the US DOC conducted an
original investigation in January 2004 and on November 29, 2004, they had final determination
for Vietnam and China only.
209
Indian successfully escaped from the antidumping imposition.

207
Ibid.
208
Ibid.
209
Bao Anh Thai, An Analysis of Lesson from learned from Catfish and Shrimp Anti Dumping Cases,
http://www.baolawfirm.com.vn/dmdocuments/an_anylysis_of_lessons_learned_from_antidumping_case.pdf, 1
42 at 21, accessed 18 Jul. 11.
74
WTO Antidumping and Developing Countries A Case Study of Vietnam
China and the Lesson of Active Participation of the Government of China
The lesson of active participation of Government in unfair trade investigations is also
emphasized by Kaw Ashima.
210
Strong arguments of the Government of China in the
Countervailing Duties investigation of Chinese products that there is no alleged subsidy or the
benchmark is inadequate were always repeated in the US domestic investigation as well as in
WTO DSB have been referred as a good example for Vietnam to follow. It is pointed out that
the kind of aggressive legalism is a fruit of accumulation of experience in the WTO dispute
settlement not only as disputing party but also as third party.
211
Vietnam, in contrast, did not
reserve its right as the third party in US Definitive Antidumping and Countervailing Duty
Determinations on Certain Products from China (WT/DS 379). Vietnam missed a great
opportunity to learn a lesson of how to response to the scenario where the Antidumping and
Countervailing come at the same time. No longer had the case of China on 15 April 2004, the US
ITC finally determined Polyethylene retail carrier bags from Vietnam had dumped on the US
market and in addition, the authority concluded that the product had been subsidized by the
Vietnam government. As a result, the bags was imposed both kinds of extra tariffs, antidumping
and subsidies orders concurrently.
212
Not reserving the right as the third party in that case
could be regards as a mistake of Vietnam since this is the first time a Vietnam product is found
guilty of both dumping and subsidizing. In order to be levied a small tariff rate, it is strongly
recommended that the Government of Vietnam and Vietnamese companies should reinforce
sharing information and promotion of cooperation between government and private
companies as well as perform active participation in an investigation. The fact has showed that
not only in the antidumping case but also in the countervailing dispute where there is the

210
Kaw Ashima, Subisidies Granted by China and Application of Countervailing Duties: Lessons for Vietnam, 46
47, Presentation at International Conference: Investment Incentives and WTO Subsidy Disputes: Experience of
Japan and the United States of America at Ho Chi Minh City University of Law, August 8, 2009
211
Ibid.
212
The US International Trade of Commission, Polyethylene retail carrier bags from Indonesia, Taiwan, and
Vietnam: Investigation Nos. 701TA462 and 731TA11561158 (Final), April 2010,
http://www.usitc.gov/publications/701_731/pub4144.pdf, accessed 7 September 2011.
75
WTO Antidumping and Developing Countries A Case Study of Vietnam
enthusiastic participation of both the government and the compulsory respondents, there is
the lower tariff.
4.2 What Happened to Vietnam?
Finally the imposition of antidumping order was released in February 2005. Since then Vietnam
shrimp exporters underwent fifth administrative reviews. Throughout the antidumping
investigation Vietnam was treated as a non-market economy, thus the USDOC practice for
determining the margin of dumping for Vietnamese companies differs from market economy
countries.
213
There are three types of dumping margin rate applied to Vietnamese companies
by the investigating authority. With the reason that the number of exporters, producers,
importers or types of products involved is so large to make such a determination (of an
individual margin of dumping) impracticable, the USDOC which bases on the data limited
individual examinations by selecting the respondents whose shares of the US market were
sizeable.
214
The producers called mandatory respondents would be imposed a single
antidumping duty rate which is more favourable than the other rates, ranging from 4.30 to 5.24
percent in the original investigation.
215
Companies not selected for the individual examination
could also have opportunity to file documents provided necessary information for the
calculation of the single rate (voluntary respondents), however, it was not guaranteed by the
USDOC where the calculation would be impracticable.
216
Regarding exporters not individually
examined, they had been divided into two categories, another small antidumping duty of 4.57
percent called all-others rate (or separate rate according to the US DOCs terminology)
were imposed on respondents who proved that they had been eligible to be levied the separate
rate. In order to be entitled the all-others rate, Vietnamese companies must satisfy the
USDOCs separate rate criteria which requires that the producers have to prove the absence of

213
United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, Annex A-1, 15.
214
Panel Report, United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.17.
215
Ibid., 7.24.
216
Ibid., 7.18.
76
WTO Antidumping and Developing Countries A Case Study of Vietnam
government control, both in law and in fact, with respect to exports
217
, a criteria which
Vietnamese producers hardly fulfilled. Failure of demonstrating the independence from
governmental control in exporting transactions leads to being levied another rate which is far
much heavier, Vietnam - wide rate of 25.76 percent on those who could not be eligible to
receive the separate rate.
218

For the first, second, and third administrative reviews, the rate applied to the mandatory
respondents was zero or de minimis and the dumping margin of 2.96 percent and 5.58 percent
for Minh Phu and Nha Trang two selected respondents, respectively, was calculated at the
forth periodic review.
219
In contrast, 4.57 per cent of the separate rate was remained from the
first three reviews and just lightly changed to 4.27 when the USDOC conducted the forth one.
220

Furthermore, they also applied the same Vietnam-wide rate of 25.76 per cent throughout the
four reviews for the exporters who to be found to have intervention from the government in
their trading business.
221

Wish to be removed the tariff Vietnam has launched its first dispute at the WTO with a case
against US anti-dumping measures on its key exports of shrimp by a request of consultation on
1 February 2010. This was hailed as an appropriate step of Vietnam since joining the biggest
commercial organization in the world. In the Panels establishment request, the complaining
party listed the following claims with respect to the US DOCs final determination in the second
and third administrative reviews and with respect to the continued use, by the US DOC, of
certain practices in successive proceedings: (i), practices challenged by Vietnam including the
zeroing in the calculation of dumping margins, the country-wide rate, and the limitation of

217
United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, Annex A-1, 15.
218
Ibid.
219
Panel Report, United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.24.
220
Ibid., 7.24 7.28.
221
Ibid.
77
WTO Antidumping and Developing Countries A Case Study of Vietnam
the number of exporters or producers in the second and third periodic reviews; (ii), all-others
rate applied by the USDOC; (iii), zeroing methodology as such.
222

Vietnam acceded to the WTO on 11 January 2007, the first periodic review covered imports of
warm water shrimp during 16 July 2004 to 31 January 2006 thus was not mentioned in a claim
to the panel by Vietnam. The forth review though involved in the transaction for the period of 1
February 2008 to 31 January 2009 but was issued on 9 August 2010 after the Panel
establishments request and the fifth was ongoing at the time of Panels proceeding. As a result,
Vietnam just brought claims for the second and third administrative reviews to be considered
by the WTO DSB. Unlikely to challenge the fourth and fifth periodic reviews in front of the WTO
can be seen as a disadvantage because the effects still remain on the exportation.
4.3 The US Retrospective in Antidumping System
Although the first defendant of zeroing case recorded in the WTO data was the EU (EC Bed
Linens), almost all the cases have involved the US as a respondent.
223
After being found to be
inconsistent with the ADA, the EC no longer used zeroing practice. In contrast, the US has still
insisted on applying this methodology when calculating the antidumping margin even though it
has been rejected by the Panel and AB many times.
224
Chad P. Brown and Thomas J. Prusa
indicated that it is the retrospective duty assessment system which deters the US from stopping
zeroing in antidumping calculation. Under the EU prospective duty assessment, the duty is
calculated on the past pricing data and applied to the future transactions.
225
However, the US
uses the retrospective system to collect an estimated antidumping duty liability at the original

222
Ibid.
223
Chad P. Brown and Thomas J. Prusa, US Anti Dumping: Much Do about Zeroing, (2010), Policy Research
Working Paper 5352, 4, http://econweb.rutgers.edu/prusa/cv/45%20-%20much%20ado%20about%20zeroing.pdf,
accessed 15 Jul. 11.
224
Ibid., 26.
225
Ibid., 30.
78
WTO Antidumping and Developing Countries A Case Study of Vietnam
investigation and the actual dumping margin amount will be determined later at the periodic or
administrative reviews.
226

Even under either system, using zeroing always inflates the dumping margin, the US
retrospective system obviously adds more uncertainty to transactions when zeroing is in used.
Importers purchasing from exporters are not able to know the size of extra duty. Since the final
duty will be assessing at the reviews, the importers unarguably are reluctant to purchase from
dumped exporters.
227
The sophistication of the US antidumping system magnifies the margin as
well as increases the unsettlement of trading transactions. This also explains why the EU quickly
abolished zeroing methodology when it was found not to consist with the ADA, the US, in
contrast, hesitates to completely repeal the zeroing.
4.4 Vietnamese Zeroing practice Complaint in the US Shrimp case
In the original investigation and in the second and third administrative reviews, the US DOC
applied different zeroing methodologies for dumping margin calculation; those are model
zeroing and simple zeroing, respectively. Vietnams claims with respect zeroing focused on
two issues: the inconsistence of simple zeroing as applied in the second and third
administrative reviews with the Article 2.4 under the ADA and inconsistence of the US DOCs
zeroing methodology, as such, with the Article 9.3 under the ADA and Article VI:2 of the GATT
1994.
228

Zeroing Under Article 2.4 of the ADA
Vietnam accused the US of violating the requirement of fair comparison of Article 2.4
because of using zeroing in the second and third administrative reviews. Article 2.4 states as
follow:

226
United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.12.
227
Chad P. Brown and Thomas J. Prusa, US Anti Dumping: Much Do about Zeroing, (2010), Policy Research
Working Paper 5352, 31,
http://econweb.rutgers.edu/prusa/cv/45%20-%20much%20ado%20about%20zeroing.pdf, accessed 15 Jul. 11.
228
United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.71.
79
WTO Antidumping and Developing Countries A Case Study of Vietnam
A fair comparison shall be made between the export price and the normal value.
The violation of Article 2.4 resides in unfair comparison when Vietnam claims that zeroing
distorts the prices of certain export transactions, since export
transactions made at prices above normal value are not considered
at their real value, and because it artificially inflates the magnitude
of dumping, resulting in higher margins of dumping and making a
positive determination of dumping more likely.
229

Focus of the USs arguments is that the Article does not provide any guidance on how the
results of these comparisons are to be treated and does not require their aggregation.
230
Due
to lacks of clarity and certainty of WTO members as to the zeroing matter, the US argues that
different conclusions have been reached by the Panel and AB reports.
231
The US is of the view
that if zeroing is to be prohibited, WTO members should address this concern by adopting a
clear and precise rule explicitly stating of ban on such a practice.
232
Absence of specific
guidance on zeroing methodology can be seen the most egregious distortions of the WTO
antidumping regime.
233
Therefore, the great latitude which has been left for the national
authority of investigation brings discretionary to determine the method of comparison. The US
sticks to the point that margins of dumping may be determined without offsets for non-

229
Ibid., 7.84.
230
Ibid., 7.85.
231
Antidumpingpublishing.com, Global Anti-Dumping Briefing, Issue 2, July 26, 2007, 1 7 at 4 5,
http://www.antidumpingpublishing.com/uploaded/documents/CSDocuments/GAD%20Briefing%202%20%28Jul%2
007%29.pdf, accessed 19 September 2011.
232
Daniel Behn, The Weakness of Good Faith Rules in WTO Trade Remedies Dispute: Excuse for Judicial Activism
or Invitation for Procedural Abuse, (2010) 1 17 at 9-10, University of Dundee,
http://www.dundee.ac.uk/cepmlp/gateway/index.php?news=30891, accessed 18 September 2011.
233
Dan Ikenson, Zeroing In: Antidumpings Flawed Methodology under Fire, (2004) Center for Trade Policy
Studies, Free Trade Bulletin, 1 3 at 1, http://www.cato.org/pubs/ftb/FTB-011.pdf, accessed 18 September 2011.
80
WTO Antidumping and Developing Countries A Case Study of Vietnam
dumped transactions, consistent with the long-held concept of dumping.
234
As a consequence,
the US states that neither Article 2.4 prohibits zeroing nor resolves whether zeroing is fair or
unfair.
235

Vietnams arguments were agreed by the Panel when they referred to the finds of the AB in US
Corrosion Resistant Steel Sunset Review,
236
US Softwood Lumber V (Article 21.5 Canada),
237

and US Zeroing (Japan)
238
. The AB of the US Softwood Lumber V (Article 21.5 Canada)
found zeroing methodology was inherently inconsistent with the fair comparison
requirement because either the transaction-to-transaction comparison or the weighted-
average-to-weighted-average comparison always leads to higher margins of dumping and
increasing the chance of dumping findings.
239
Therefore, the US DOCs use of zeroing
contravenes the content of fair comparison as described in the article 2.4 even the margin is
found to be zero or de minimis. It is unarguable that zeroing methodology, no matter under
which form, has been considered as unfair since it distorts the real value of transactions as they
were, it hence cannot be said to be impartial, even-handed, or unbiased.
240
From the Panels
judgment, it can be inferred that apply zeroing to determine whether the product from the
exporting country dumped the foreign market or not is biased in nature, irrespective no

234
Daniel Behn, The Weakness of Good Faith Rules in WTO Trade Remedies Dispute: Excuse for Judicial Activism
or Invitation for Procedural Abuse, (2010) 1 17 at 4 - 5, University of Dundee
http://www.dundee.ac.uk/cepmlp/gateway/index.php?news=30891, accessed 18 September 2011.
235
Panel Report, United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.86.
236
Appellate Body Report, United States Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon
Steel Flat Products from Japan, WT/DS244/AB/R.
237
Appellate Body Report, United States Final Dumping Determination on Softwood Lumber from Canada,
WT/DS264/AB/R.
238
Appellate Body Report, United States Measures Relation to Zeroing and Sunset Reviews, WT/DS322/AB/R
239
Appellate Body Report, United States Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon
Steel Flat Products from Japan, WT/DS244/AB/R, 135; Appellate Body Report, United States Final Dumping
Determination on Softwood Lumber from Canada, WT/DS264/AB/R, 139 140.
240
Panel Report, United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.92.
81
WTO Antidumping and Developing Countries A Case Study of Vietnam
dumping is found. Therefore, the Panel concludes that the USs zeroing application is
inconsistent with Article 2.4 of the ADA.
Zeroing under Article 9.3 of the ADA and Article VI:2 of the GATT
Vietnam claims that USs using zeroing methodology is inconsistent with Article 9.3 of the ADA
and Article VI:2 of the GATT in the periodic reviews. The complaining party recalled the
precedents where the findings of the Appellate Body are determinative in those disputes and
the Panel hence should follow them: US Zeroing (EC), US Zeroing (Japan), US Stainless
Steel (Mexico), US Continued Zeroing and US Zeroing (Japan). Referring to the Article 9.3
and VI: 2 which states the same content that the amount of the anti-dumping duty shall not
exceed the margin of dumping, Vietnam indicates that the US antidumping investigating
authority, by using simple zeroing practice, disregards the negative comparison results which
exaggerate the size of margins than the margins for the product as a whole.
241
In EC-Bed Lines
disputes, the EU calculated dumping margins on various types of bed linens separately which
later rejected by the AB that the ADA requires products to be evaluated as a whole in
determining antidumping duties.
242
In contrast, the responding party argues that dumping may
be found at the individual, transaction level and there is no requirement that the margin needs
to be calculated for the product as a whole. While Vietnam believes that the term dumping
and margin of dumping should be defined in a way regarding product under investigation as a
whole, and in respect of an exporter, the US inclines that it can be based on transaction-specific
basis as well.
In order to interpret whether those terms are understood under the exporter-specific concept
or the transaction-specific basis, the Panel referred to approaches of the Appellate Body in
previous disputes. The Appellate Bodys conclusion in these prior cases sides with Vietnam
against the US because dumping can only be determined for the exporter, and in connection

241
Ibid., 7.125 7.126.
242
Appellate Body Report, European Communities Antidumping Duties on Imports of Cotton-Type Bed Linens
from India , WT/DS141/AB/R, 49.
82
WTO Antidumping and Developing Countries A Case Study of Vietnam
with the product under consideration as a whole, rather than on a transaction-specific basis.
243

The Appellate Body explains simple zeroing is found to be inconsistent with Article 9.3 and
VI:2 because it levies an amount of antidumping duty that exceeds the exporters margin
dumping. However, a distinction should be drawn between the amount of antidumping duty
and duty liability. It is worth emphasizing that the prohibition of simple zeroing in
administrative reviews does not deter the duty collection of the importers as long as such duty
does not exceed the exporter-specific margin of dumping.
244
Therefore, the Panel of the US -
Shrimp dispute followed the assessment of these precedents and concluded that US zeroing
methodology is inconsistent with the US obligations under Article 9.3 of the ADA and Article
VI:2 of the GATT 1994.
Finally, on July 11, 2011 the report of the Panel was released of which the WTO backs with
Vietnam in the Shrimp dispute with US. The defendant is recommended to bring its measure
into conformity with its obligations under those Agreements. The win of Vietnam after almost
10 years suffering from an antidumping duty of the US DOC on frozen shrimps were predictable
because the USs zeroing is not unusual matter before the WTO DSB. From the Catfish to
Shrimp case, Vietnam loses it innocence.
245
Vietnam knows how to effectively respond to the
situation when an antidumping investigation is initiated. In order to be removed the extra duty
on Shrimp case; they brought a case in front of the WTO which they were not able to do before
to the Catfish case when Vietnam had not been the WTO member at that time.


243
Panel Report, United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R 7.135 -
7.136.
244
Ibid., 7.137.
245
Do Thanh Cong, Catfish, Shrimp, and The WTO: Vietnam Loses Its Innocence, (2001) 43 Vanderbilt Journal of
Transnational, 1235 1246.
83
WTO Antidumping and Developing Countries A Case Study of Vietnam
CHAPTER FIVE: CONCLUSION
Free trade has been condemned causing damage only to the poor countries where the
economies are very vulnerable and immunity from liberalization is quite weak. However what
has occurred recently is telling a different story. Even richer nations cannot avoid the adverse
impact of international free trade, that is the surge imports from developing countries.
Comparative advantages such as labour input wage, raw material cost coupled with favourable
natural conditions gives the poorer states an edge over domestic industries of the industrialized
world. In this context, producers of the importing market refer to the antidumping measure as
an effective resort. Antidumping policy hence becomes a protectionist shield rather than an
anti unfair competitive tool.
Vietnam, after the Renovation in 1986, is considered as one of globalizations success stories of
the 1990s.
246
Following pro-capitalism reforms, Vietnam has become the fastestgrowing
economy in Asia in recent years, with GDP growth averaging 7.6% annually between 2000 and
2009.
247
Along with the fast growth rate, exports increase which might make Vietnam face a
number of antidumping investigations in the future. Reference to other countries, coupled with
lessons from the Catfish War and the Shrimp Case draws four lessons which can be seen as a
tactical toolkit of how to effectively respond to those investigations: improving internal record
tracking of private sectors as an evidence of market-orientated economy; active participation of
governments side; market diversification and taking advantage the WTO dispute settlement
mechanism.
Firstly, private companies should maintain an accounting and recording system consistent with
international standards for the purpose of proving market-based business operation. Despite
the lack of treatment of Vietnam economy as market economy, the DOC remains open to
approving the separate rate treatment of export price in appropriate circumstances. Those

246
Robert J. Carbaugh, International Economics, (12
th
edn, South Western Cengage Learning, USA, 2009), 168.
247
Business Monitor International, Vietnam Business Forecast Includes 10-Year Forecast to 2020: Inflationary
Pressures Threaten Exchange Rate Policy, Q1 2011, 13, www.businessmonitor.com, accessed 06 June 2011.
84
WTO Antidumping and Developing Countries A Case Study of Vietnam
companies that had provided useable information were imposed a lighter antidumping rate
than the others. Therefore, having a full cooperation in the investigation can help to reduce the
dumping margin. Comprehensively understanding and completely answering the questionnaire
can contribute to minimize the extra duty as well. Given the difficulties and technique of the
survey, resort to expertise is advisable in order to provide the most accurate information to the
national investigating authority.
In an antidumping case against a so-called non-economy market like Vietnam, the US applied
three distinct antidumping rates for three kinds of exporters as mentioned above. An important
lesson which Vietnamese exporters need to pay attention to is the close cooperation with the
investigating authority which may reduce the dumping margin or might increase the number of
exporters who would be applied the rate of zero or de minimis. Admittedly, the threat of being
accused of dumping is unavoidable since it completely depends on the investigating authority
of the importing market where protectionism for domestic industries is always strongly sought.
Therefore, performing an active attitude towards the dumping investigation by answering
questionnaires and providing the information within the period benefits the individually
examined respondents. In the Shrimp case, there were four respondents selected for the
original investigation but just three of them cooperated with the investigating authority.
248
In
the first administrative review, three mandatory respondents were selected but only one
cooperated.
249
Those who were considered as non-cooperative respondents are always
imposed the highest rate. Vietnamese companies should enhance their awareness of the
importance of such cooperation. This cannot guarantee a favourable antidumping duty,
however, the more the exporters cooperate, the more likely they might be applied the small or
zero antidumping duty. Although being defined as a non-market economy, an attempt to prove
the absence of the governmental control and that they operate their business in a fully
competitive market might lead to the grant of the separate-rate. Even though they will not be

248
Panel Report, United States Anti Dumping Measures on Certain Shrimp from Vietnam, WT/DS404/R, 7.24
249
Ibid., 7.25
85
WTO Antidumping and Developing Countries A Case Study of Vietnam
selected for the individual examination, speedily providing useable information makes a
contribution to the consideration of the investigation.
Secondly, active participation from the state level protects its domestic industry from severe
damage caused by the antidumping investigation. The harmonious cooperation and
information sharing between the government and private sectors can early warn the
companies of antidumping investigations which are highly likely to happen in the future.
Speedy intervention from governments can prevent the imposition of antidumping duties as
what India did in the Shrimp Case. When the investigation is unavoidable, co-ordinated action
with threatened partners, even outside the victim country, brings pressure to bear upon the
antidumping user, forcing them to be cautious about their final decision. Furthermore,
developing member states should recognize the importance of positive involvement in the
disputes as a third party as well as a complainant. As a third party developing countries like
Vietnam can accumulate experience with little investment. As a complaint, their arguments will
be listened to and legally adjusted by an institutional context, that is WTO. This brings a better
outcome than bilateral agreements. In order to increase the likelihood of being able to predict
highly risky markets, building an early warning system as Vietnam is doing now supports not
only the Government but also benefits the business community.

The North American, the EU,
and Australia markets are those where Vietnamese products are highly likely to be found guilty
of dumping. Such prediction helps the companies adjust their exports as well as orientate their
trading partners.
Thirdly, as we have seen, the phrase never put all eggs in one basket is always worth
repeating. The lesson from India and expanding market of Vietnam after the Catfish War has
proved how important diversification is. In spite of losing the dominant position in the US
catfish market, Vietnam established trading relations with other counterparts such as EU,
Russia, Ukraine rather than the US. It was observed that one of the reasons causing the
investigation was the sudden imports which thrust the domestic industry in to self-defense.
Therefore imposing an antidumping order is the fastest way to respond to the decline of the
domestic producers market shares. Broadening destinations of exports can help to minimize
86
WTO Antidumping and Developing Countries A Case Study of Vietnam
the chance of initiating an antidumping investigation. Moreover, diversifying the market also
means dispersing the loss when one market is blocked by the antidumping order as happened
to Vietnam tra and basa fish. Vietnams catfish exports mainly focused on the US market,
therefore, when antidumping order was levied, the whole industry were virtually destroyed.
After the Catfish War, exporters started marketing their products to the domestic market and
others which had been overlooked before.
Finally, membership in the WTO is the key variable of difference which led to success in the
Shrimp case. While the BTA has brought mutual benefits, the treaty also reflects the
asymmetric trading relation between two signatories. It is admitted that the US has an upper
hand in the Catfish War which give them a more flexible position than Vietnam. There are two
reasons for the unequal relation. Vietnamese frozen fillets were primarily exported to the US
market, and Vietnamese catfish producers were entirely dependent on access to the valuable
market for their goods. Furthermore, the country lacks the market power to counterbalance to
the US, the smaller size market makes it ineffective to take a retaliation measure against the US.
At the same time, US policy could declare Vietnamese tra and basa fish to be completely
distinguished from catfish and a like product with catfish. Just by switching standards, the US
successfully protected its own enterprises. Such a biased and arbitrary antidumping finding
actually bedevilled the whole Vietnam catfish industry. In contrast, by filing a complaint against
the US in the Shrimp case before the WTO, Vietnam forced the other side to listen to this
demand for a unilateral policy change and negotiate for a neutral standard which Vietnam was
not able to make in the previous case. The WTO dispute settlement process helps the weaker
party by means of legal bandwagoning. Whereas Vietnam stood alone in the Catfish War, in
contrast, in the Shrimp case, several countries joined together to protest the antidumping
initiation or stayed by Vietnams side when the dispute was brought in front of the WTO. In the
meantime, pressures which came from the number of member states hindered the US from
unilaterally and arbitrarily imposing an antidumping order on warm water shrimp as they did to
Vietnamese catfish before. As a result, the extra tariffs in the Shrimp case are much lower than
the preceding decision. Furthermore, the fact that Vietnamese catfish had domination over the
87
WTO Antidumping and Developing Countries A Case Study of Vietnam
US market was the main reason caused the substantially heavy rate. Bhattarcharyya described
the US attempt to quell imports as the death knell of the industry.
250
The Vietnamese
antidumping case was an important lesson for local stockholders on the need for protection of
vulnerable poor people from negative impacts of trade liberalization. The WTO dispute
settlement mechanism is not a magic wand to drive back antidumping disputes because
asymmetry of economic power relation between wealthy countries and poor countries results
in the inequality in taking retaliation. Nevertheless the dissertation has highlighted that the
developing countries that are members of the WTO gain the better negotiation outcomes then
those that are non-members on the ground that the WTO offers more options to poorer
nations in counteract with antidumping disputes conducted by more powerful countries.











250
B. Bhattarcharyya, The Indian Shrimp Industry Organizes to Fight the Threat of Anti-Dumping Action, World
Trade Organization, http://www.wto.org/english/res_e/booksp_e/casestudies_e/case17_e.htm, accessed 13
August 2011.
88
WTO Antidumping and Developing Countries A Case Study of Vietnam
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89
WTO Antidumping and Developing Countries A Case Study of Vietnam
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