The Vietnamese Ministry of Industry and Trade (MoIT) has continued to slap safeguard measures on diammonium phosphate (DAP) and monoammonium phosphate (MAP) fertilizers imported to Vietnam, rejecting proposals by some importers to temporarily cancel the decision due to a recent shortage and the increasing price of the items in the domestic market.

Vietnam continues slapping safeguard duty on fertilizer imports. Photo: Bao Cong thuong

The ministry’s temporary safeguard duty is based on a trade defense agreement of the World Trade Organization (WTO) and after a comprehensive investigation and assessment of the impact of those items to the Vietnamese market in accordance with the relevant regulations. Safeguard measures will be applied as a substantial increase in imports causes serious injury for the domestic sector. 

According to the ministry, DAP price fluctuations are mainly due to external factors such as the increase in the prices of some input materials and transportation costs. The domestic demand for DAP has basically not increased compared to the previous years.

The safeguard duties are applied at a lower rate, with an application time shorter than the one permissible under WTO regulations, the MoIT said, adding that relevant ministries and branches have carefully considered the current situation of the domestic fertilizer market, the impact of the safeguard measures on local producers and farmers, and the impact on the costs of rice cultivation, according to the MoIT.

At the time  the decision to apply safeguard measure takes effect, the safeguard duty is only equivalent to a maximum of 0.66% of the total cost of rice production. This rate may be even lower because the safeguard  tariff would be  gradually reduced along the roadmap while many other costs of rice production increase.

The imposition of the safeguard tariff under a gradual reduction creates a fair environment for domestic production, and bring benefits to fertilizer users. For an agricultural country like Vietnam, reducing dependence on imported fertilizers is an important issue, the MoIT emphasized.

The ministry said that the current law does not provide temporarily canceling safeguard measures according to temporal changes. The MoIT will continue to coordinate with the Ministry of Agriculture and Rural Development and related units to evaluate and review the application in accordance with the provisions of law.