February 14, 2015
– The Ministry of Industry and Trade believes that domestic firms will be able to compete with counterparts from other ASEAN countries after Vietnam joins the ASEAN Economic Community (AEC) late this year.
Minister of Industry and Trade Vu Huy Hoang said domestic enterprises now hold 97% local retail and wholesale market share though Vietnam opened its doors to imports from the Association of Southeast Asian Nations (ASEAN) decades ago.
Hoang raised the point after some recent surveys show a lot of local enterprises are not well prepared for or aware of AEC establishment and some experts even warned that local businesses may lose market share at home when imports from ASEAN surge on tariff reductions and exemptions, Vietnam News Agency reported.
The trade minister stressed Vietnam considers wholesale and retail as sensitive areas when the country negotiates with partners for bilateral and multilateral free trade agreements. Therefore, Vietnam will open these markets to foreign investors based on prudent road maps and adopt appropriate policies for different imports, especially farm produce and fuels.
Quotas are among the measures Vietnam applies to protect local enterprises and encourage them to invest and maintain a firm foothold in the wholesale and retail sectors.
Apart from quotas, authorities will carefully consider the expansion plans of foreign wholesale and retail companies based on a master zoning plan for these sectors and their possible impacts on the wholesale and retail networks of Vietnamese enterprises. Foreign wholesale and retail companies should have plans to boost consumption of Vietnamese goods at their stores as well as local production if they want their expansion plans approved.
In addition, foreign wholesale and retail companies are requested to give priority to domestic enterprises if they want to transfer part or all of their investments. They may only sell their investments to other foreign partners in case they cannot find suitable local firms.
Under its commitments to the ASEAN Free Trade Agreement, Vietnam will gradually reduce import tariffs for many products to 0% and relax requirements for imports from ASEAN after AEC comes into existence.
Vietnam’s retail market last year is estimated at more than VND2,945 trillion (nearly US$138.4 billion), up 6.3% against the previous year, adjusted for inflation. According to the General Statistic Office, the foreign investment sector accounted for VND97.8 trillion, the State sector VND299.7 trillion and the private sector VND2,547.7 trillion.
(The Saigon Times)