The status of 'non-market economy' and the demand of Vietnam


The south-eastern country of Vietnam is suing the US administration for avoiding high taxes imposed by the US on imported goods. “Non-market Economies” Status To To convert to “market economy” Is pressing for.

related facts

  • current situation of vietnam
    • Although Vietnam has emerged as one of the US's top trading partners and has helped counter China's growing influence in the south-eastern region, it has been a US adversary for more than two decades. 'Non-market economies' Remains in the list.
    • in this list 12 non-market economies Like Russia, China and some other countries, which former soviet union Used to be a part of.
  • Non-market Economies
    • America ranks a country based on many factors non-market economy Designates as.
    • These factors are-
      • If the country's currency convertible Is;
      • If Wage Rates Labor and Management are determined by free bargaining between;
      • If Joint venture or other foreign investment is allowed;
      • What State ownership of means of production are in;
      • And if the state resource allocation and price and output decisions Controls.
      • human rights Other factors are also considered.
    • US policy regarding non-market economy
      • Non-market economy status on goods imported to the US from designated countries 'Anti-dumping' duty Allows installation.
        • in international trade, dumping occurs when someone Deliberately keeping the country's export prices below domestic prices. is determined, causing loss to industries in the importing country.
      • anti-dumping duty essentially between the export price of imported goods and their normal price make up the difference Does.
      • anti-dumping duty The level of is determined by trust in the third country, for example, Bangladesh, which is a market economy. The US estimates the value of a product imported from a non-market economy like Vietnam based on its price in Bangladesh and then assumes that it Estimated production costs for Vietnamese company Is. Company's own data regarding costs are not considered.
  • Due to Vietnam's demand for 'market economy' status
    • Substantial Economic Reforms: Vietnam has argued that in recent years it has economic reforms implemented have done, due to which his name From the list of non-market economies Should go away.
    • Fulfilling the criteria: Vietnam meets several criteria for changing status.
      • For example, Center for Strategic and International Studies (CSIS) According to a report, Vietnam foreign investment allows, salary Free dialogue between workers and management and most of the means of production are not owned by the state.
    • Waiver of 'Anti-Dumping Duty': The change in status will also help Vietnam get rid of anti-dumping duties, which would hamper the export of its products. More competition in the US market Will become.
      • According to Vietnam International Trade Centre, anti-dumping duty The method of calculating is flawed because it 'Dumping Margin' increases too much” and it does not really reflect the situation of Vietnamese companies.
  • Challenges
    • The path for Vietnam to get the market economy tag is full of obstacles.
    • American steel manufacturers and American Shrimp Processors Association' has asked the Biden administration not to change the status of Vietnam.
    • This move may also be opposed in Congress, where Eight US senators and 31 members of the House of Representatives claims that the change in situation in Vietnam will lead to huge investment in Vietnam Chinese state companies Will get help, which will give them an opportunity to easily avoid American tariffs.
    • Currently, the US Department of Commerce status review Doing – This process is scheduled to be completed by the end of July.

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