Trade disputes take toll on local firms
Trade disputes take toll on local firms
International trade disputes involving local enterprises are found to have caused great economic losses for them, said officials at a workshop in the Mekong Delta city of Can Tho on Friday.
Held by the Can Tho branch of the Vietnam Chamber of Commerce and Industry (VCCI Can Tho) and the Vietnam International Arbitration Center (VIAC), the workshop focused on risk management in trade and legal barriers in key markets, given the rising tendency of protectionism across the world.
Vo Thi Thu Huong, deputy director of VCCI Can Tho, said that between 1993 and March 2019, the VIAC offered its resolution services to 168 trade disputes in China, 97 in South Korea, 58 in the United States and 23 in Japan.
“The total number of cases was a small number from 1993 to 2018, but their value was enormous,” she said, adding that the accumulated value amounted to more than VND2.27 trillion for those disputes handled by the VIAC in South Korea, VND3.5 trillion in Japan, and VND366 billion in the United States.
Notably, the accumulated value of the disputes in China was 179 times higher than in the United States, at more than VND65.4 trillion during the period.
These figures are only “a slide of the picture” about the number of disputes during the international economic integration of Vietnamese firms, according to Huong.
She added that local firms might take much time in dealing with these cases, while their business operations could have been severely affected. Their value could cause them to risk possible bankruptcy, as well.
Le Thanh Kinh, head of the HCMC-based Le Nguyen Law Office, who is also a VIAC arbitrator, told the Saigon Times on the sidelines of the workshop that the disputes between local firms and their Chinese partners are largely due to trade in border markets involving a variety of agricultural products, including fruit and food.
The payments for many deals are made in cash, with 30%-50% of their value in advance. In case of market fluctuations, Chinese partners have opted not to receive goods ordered from Vietnamese firms. This means local firms could not receive the entire value of their products, leading to disputes in payment.
Another issue is when the quality of goods and input materials, mainly in garment and chemicals from China into Vietnam, is of poor quality. As a result, local manufacturers find it difficult to ensure the quality of their products, and they have no other choice but to file lawsuits about substandard commodities.
