Vietnam has to review the sugar tax, after the change in sugar prices

Thailand looks set to ask Vietnam to review its punitive measures on Thai sugar and open a new investigation next year after Vietnam ruled to impose an anti-dumping (AD) levy of 47.64% on some sugar products from Thailand.

Keerati Rushchano, director-general of the Foreign Trade Department, said that after one year of Vietnam imposing the AD measure, Thailand will ask Vietnam to review it and open a new investigation as required by World Trade Organization (WTO) rules.

“We think there is still some uncertainty such as damage caused by Thai sugar products in Vietnam,” said Mr Keerati. “Thailand’s authorities need to give a clear and accurate explanation.”

Vietnam’s industry and trade ministry said on Wednesday the country imposed an anti-dumping levy of 47.64% on some sugar products from Thailand for five years to replace a temporary tax introduced in February. The decision comes after the ministry finished an anti-dumping investigation that started last September on behalf of the domestic industry. The probe showed that subsidised sugar from Thailand surged 330.4% to 1.3 million tonnes in 2020 and imports were undermining the domestic sugar industry, the ministry said. Previously, the industry ministry had imposed a temporary 33.88% levy on Thai sugar in February. The anti-dumping tax will not impact Thai sugar manufacturers and farmers who are more affected by changes in global sugar prices in the commodity market, said the Office of the Cane and Sugar Board (OCSB) and Thai Sugar Millers Corporation (TSMC). “Sugar traders and brokers will be affected by the new tax rate,” said OCSB secretary-general Ekapat Wangsuwan, adding they usually buy sugar from Thai factories to resell abroad under their own marketing plans. Thailand is the world’s fourth-largest sugar producer and the second-largest exporter following Brazil.

Siriwut Siempakdi, president of TSMC’s public relations working group, said sugar traders and brokers have exported more to Vietnam in recent years. Vietnamese sugar producers have found it hard to compete because their production cost is higher than Thailand’s, said Mr Siriwut. However, despite no impact on Thai sugar factories, industry and commerce officials are still required to work together to clarify doubts over the subsidised sugar issue, said Mr Ekapat. “It is understandable Vietnam needs to protect its sugar industry,” he said.

Vietnam removed import duties on sugar imported from Southeast Asian countries in 2020 in accordance with the commitments to the Asean Trade in Goods Agreement (ATIGA). However, provisions allow Asean countries to impose import duties to protect their domestic industries against anti-competitive behaviour.