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Significance of Vietnam being a market economy


Vietnam will have a newfound advantage in dealing with anti-dumping and anti-subsidy investigations by other countries if major importers like the U.S. and EU consider it a market economy.

According to the Ministry of Industry and Trade, 72 countries recognize Vietnam as a market economy, including Canada, Australia, Japan, and South Korea. The U.K. did so recently with an official letter to the effect.

Speaking to VnExpress, a Trade Remedies Authority Department official said since its first anti-dumping investigation case against Vietnam in 2002 the U.S. had been considering the country a non-market economy.

In a meeting with the U.S. Secretary of Commerce Gina Raimondo in Washington last Tuesday, Prime Minister Pham Minh Chinh proposed the U.S. to soon recognize Vietnam’s market economy status. The need for recognition of Vietnam's market economy status was also in the joint statement between General Secretary Nguyen Phu Trong and President Joe Biden on upgrading the two countries' relations to a Comprehensive Strategic Partnership.

The EU also sees Vietnam as a non-market economy. In 2015, while free-trade agreement negotiations were underway, the EU Delegation representative told the press that the signing shouldn’t be equated to recognizing Vietnam as a market economy.

A non-market economy is one where the government has a monopoly, or near-monopoly, on trade and the state gets to set domestic prices. Traditional calculation principles are not applicable to exporters considered "non-market." Importers, meanwhile, can use other suitable principles. This creates major disadvantages for manufacturers and exporters based in non-market economies.

Each country will have its own regulations to determine a non-market economy.