Socialist Republic of Vietnam

By Edward Alden in Washington
Financial Times; Jul 24, 2003


The US hit hard at two of its key Asian trading partners yesterday by locking in place hefty import tariffs on semiconductors from Korea and catfish from Vietnam.

The US International Trade Commission ruled unanimously in both cases that low-cost goods from the countries were hurting US competitors, which means tariffs imposed earlier this year will remain in place.

The cases have triggered anger in Vietnam and South Korea, which have charged the US with manipulating its trade laws to keep out efficient foreign competitors.

Minh Vu, economic counsellor at the Vietnamese embassy in Washington, said the case against Vietnam's catfish farmers was groundless and warned that the decision could hurt trade relations with the US.

The ruling means Vietnam's catfish industry, which the government says supports 400,000 jobs, will continue to face import duties of 38-64 per cent that were first levied in January after the US ruled the fish were being dumped below cost in the US.

Vietnam, which had about 20 per cent of the US frozen catfish market and shipped $63m (€56m, £39m) worth of the fish last year, says exports to the US are down 30-40 per cent since tariffs were imposed.

The action has caused considerable bitterness in Vietnam, though the country overall has gained substantially from a 2001 free trade agreement with the US. Vietnam's exports to the US more than doubled to $2.4bn last year, and have reached $1.8bn in the first five months of 2003.

The decision on semi-conductors will be a blow to Hynix, the Korean group that is the world's third biggest D-Ram supplier in a global market expected to hit $29bn this year. The company faces a 44 per cent duty on all its exports to the US.

Hynix said yesterday that the company had prepared a plan to minimise the impact of the decision, and would increase production of memory chips at its Oregon fabrication plant as a way to bypass the duties.

The Korean government has said it will appeal against the decision to the World Trade Organisation.

The memory chip case was brought by Micron, the world's second biggest chipmaker, which said yesterday that the decision confirmed Hynix was receiving illegal government subsidies and "demonstrates our government's commitment to enforce trade laws".