Concluding remarks by the Chairperson

This first Trade Policy Review of Viet Nam has provided an excellent opportunity to improve our understanding of its trade and investment policies. I would like to sincerely thank H.E. Mr. Quoc Khanh Tran, Vice-Minister of Industry and Trade, Ambassador Trung Thanh Nguyen, Permanent Representative of Viet Nam to the WTO, and the rest of the very large Vietnamese delegation, for their open, frank and constructive engagement throughout this exercise. I would also like to thank Ambassador Francisco Pirez Gordillo, Permanent Representative of Uruguay to the WTO, for his interventions as discussant. Viet Nam’s written answers to the over 500 written questions have been well appreciated by Members and we look forward to its replies to the additional and outstanding questions, no later than one month after this meeting.

Members congratulated Viet Nam on its achievement in moving from being a low-income country with a centrally-planned economy to become a market-led lower middle-income economy. They strongly commended Viet Nam on its impressive socio-economic performance, allowing the country to substantially reduce its poverty levels, and secure high growth rates over the last couple of decades, as well as its gradual integration to the multilateral trading system and rising competitiveness, making it an active player in export-led growth. Members recognized that these successes were the result of significant reforms initiated prior to, during and after its WTO accession and welcomed Viet Nam’s determination to ensure that its WTO membership provides a renewed impetus for further domestic reforms rather than being an the end in itself. In this context, while noting the recent macroeconomic stabilization, some Members also expressed concern over Viet Nam’s growth slowdown, underlining delays in the implementation of certain important structural reforms, not least of state owned enterprises (SOEs), and the systemic risks facing the financial sector. Viet Nam was encouraged to address these macroeconomic and structural challenges, including through its “Master Plan on Economic Restructuring” from 2012, if it is to maintain its development trajectory and achieve its established objective of becoming a modern industrialized country by 2020.

Members commended Viet Nam for its continued, active pursuit of trade liberalization in a multilateral, regional and bilateral context. Many Members praised Viet Nam for its firm commitment to trade openness as a means for development and its rejection of protectionism in general. Members welcomed Viet Nam’s clear support for the WTO, the conclusion of the DDA and a successful outcome in Bali, illustrated by its constructive role, among other things, as Recently Acceded Member. At the same time, with such an ambitious regional and bilateral agenda, the need to ensure compatibility with the multilateral trading system was highlighted. Some Members also invited Viet Nam to accede to the GPA in an expedited manner, and to join the on-going negotiations to expand the coverage of the Information Technology Agreement (ITA).

Members recognised Viet Nam’s serious efforts to implement its WTO accession package, among other things, highlighting the extensive tariff reductions undertaken by Viet Nam and its relatively comprehensive services’ reforms, as well as expressed appreciation for Viet Nam’s efforts towards administrative reform, improved transparency of its trade regime, and enhanced protection and enforcement of intellectual property rights.

Even so, despite the many positive and important steps taken to open up Viet Nam’s trade regime and instil necessary reforms of its economy, Members pointed to a number of areas where further improvements could be made. The main — although admittedly non-exhaustive — areas for possible improvement brought up by Members during the review include the following points and we take due note of the Vice-Minister’s constructive statement in this regard:

•    Transparency of the regulatory and institutional framework: Several Members noted that Viet Nam’s administrative and legal system remains complex, and its functioning could be improved through simplification, elimination of overlapping responsibilities, and increased transparency. Incoherence of laws and regulations, and inconsistency in their application by authorities, presents serious problems for economic operators. As also recognized by Viet Nam, work to comply with its notification obligations towards the WTO needs to be stepped up and Members have taken due note of Viet Nam’s request for support in this area. Many Members also saw a simpler, more stable, and predictable investment regime as essential for Viet Nam to attract more foreign direct investment.

•    Tariff and non-tariff measures: Despite Viet Nam’s general thrust towards trade liberalization, a number of issues were highlighted by Members in their interventions and written questions, including frequent tariff changes and the use of the gap between bound and applied rates to “support” selected industries and the relatively high tariff protection afforded to some industrial sectors and agriculture. Similarly, Members pointed, with concern, to new licensing requirements, customs valuation, minimum or reference prices and classification issues, tax incentives and subsidies, and local content requirements in government procurement. Concerns were also expressed regarding measures affecting specific goods such as motor vehicles, pharmaceuticals, chemicals, and alcoholic beverages. Effective protection of intellectual property rights remains a matter of high priority for both Viet Nam and many of its trading partners.

•    Technical standards and sanitary and phytosanitary measures: Although some progress has been made in setting of technical regulations and standards and SPS measures, some Members were concerned over the lack of sufficient opportunities to comment on proposals, that the measures were more trade-restrictive than necessary, particularly those relating to food safety, and that the measures deviated from international standards. Members encouraged Viet Nam to act in line with its international obligations, including under the TBT and SPS Agreements.

•    State owned enterprises and state control over the economy: While noting the steps taken to ensure equal treatment between foreign and domestic companies, Viet Nam was strongly encouraged to continue reforms of its state owned sector to create a more level playing field for all concerned. Considering the very sizable part of Viet Nam’s economy that is represented by state owned enterprises, a number of Members underlined that this situation runs the risk of negatively affecting the overall business environment in Viet Nam and thereby hindering its future economic development.

•    Sectoral issues: Some Members noted the high rate of protection and support for certain manufacturing activities, as well as new measures affecting mining royalties, some telecommunication activities, air transport, distribution, and the broadcasting and film industry. Certain Members recommended improving the operational framework of trade‑related sectors (e.g., electricity supply, transport infrastructure), besides regulatory reforms and trade liberalization in certain sectors. It was further noted that while agriculture production had increased considerably and Viet Nam was now a major producer and exporter of several agricultural products, there was concern over the lack of information available on Government assistance to the sector, as well as that support to the fisheries sector risks contributing to over-exploitation of fishing stocks.

In conclusion, Members generally recommended that Viet Nam continues undertaking further trade policy and structural reforms to further improve its overall efficiency, productivity, and competitiveness, and to maintain an open WTO-consistent trade and investment regime to secure sustainable growth and realize its full potential. Members invited Viet Nam to avoid resorting to trade restricting or distorting measures to promote domestic production.

Members warmly welcomed that this first TPR of Viet Nam has provided an opportunity to assess the points of progress and to identify further ways forward. The numerous questions posed and the participation of a large number of delegations in this meeting reflect Members’ substantive interest in Viet Nam’s trade and investment policies and practices. In closing, I would like to thank the Vietnamese delegation, all the other delegations, the discussant and the Secretariat for this successful review.