Akin to granting PNTR to China in 2000
WASHINGTON — The Coalition for a Prosperous America (CPA) called on the Biden administration to reject misguided calls to revoke the non-market economy status of the Socialist Republic of Vietnam — a nation where the economy remains highly controlled by the government. According to a report by the U.S. State Department, Vietnam “is an authoritarian state ruled by a single party, the Communist Party of Vietnam” and its elections are “neither free nor fair.”
If the Department of Commerce wrongly determines that the Socialist Republic of Vietnam is a market economy, the United States would no longer have the ability to apply the full force of the U.S. trade cheating laws to address the market distortions caused by interference from the Vietnamese government in their economy.
In a comment letter to the Department of Commerce, CPA outlined why the Biden administration should not grant market economy status to the Socialist Republic of Vietnam:
“The misguided effort to classify the Socialist Republic of Vietnam as a market economy is similar to the failed thinking that led to granting permanent normal trade relations status to China — a diplomacy-driven groupthink that fake trade liberalization will persuade a dedicated communist country to become capitalist, democratic, and liberalized,” the letter states. “It did not work with China. And it won’t work with the Socialist Republic of Vietnam.”
“Vietnam is simply not a market economy by any measure,” the letter continues. “State-owned firms dominate the economy, and Chinese-owned firms are pervasive. Prices and wages are not set by market forces and are thus arbitrary or simply adjusted to comport with national policy goals. The dong is not a convertible currency. And the Socialist Republic of Vietnam is a superhighway transshipment route for unlawful and duty-evading Chinese projects.”
CPA’s comment letter provides evidence of how “Vietnam is engaged in a pattern of violation of U.S. anti-dumping laws.” According to the law firm of Cassidy Levy Kent, “[O]ver the last decade, Vietnam has been the target of a successive dumping investigation seven different times after the original target – the People’s Republic of China (“PRC”) – was found to be engaged in injurious dumping. Within as little as 130 days after the date of the anti-dumping duty order concerning China, new producers in Vietnam were subject to ultimately successful allegations of dumping in the United States.”
CPA’s comment letter also explains why Vietnam fails to meet the criteria for Market Economy Status. “Vietnam manifestly fails to meet the other criteria for market economy designation, as discussed in the attached Appendix,” the letter affirms. “We believe these failures to meet the criteria for market economy status are obvious.” This includes the following:
- Vietnam’s currency is not convertible into the currency of other countries.
- Wage rates in Vietnam are not determined by free bargaining between labor and management.
- Foreign investment in Vietnam is prejudiced.
- The government ownership or control of the means of production is pervasive.
- The extent of government control over the allocation of resources and over the price and output decisions of enterprises is extensive.
Read CPA’s comment letter here.
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