Asia Times: Ministry of Trade 'goes public'


	May 25, 2001	atimes.com

Southeast Asia

Ministry of Trade 'goes public'

HANOI - Vietnam's Ministry of Trade has made public its planned trade policies for the 2001-05 period to help enterprises and state agencies to formulate their import and export strategies.

Trade Minister Vu Khoan has said that the decision to release the outline, which has never been done before, was a positive step that will help domestic firms prepare for the process of regional and international integration. He said the decision will also reduce excessive bureaucracy and increase transparency in allocating quotas. The decision will effectively lift trade restrictions on all commodities except those which have been banned by the government.

For five commodities - rice, fertilizer, wine, clinker and petroleum - the quota system will be phased out gradually.

The decision also states that the MoT will lift non-tariff] barriers for all commodities except petrol and sugar by 2003, when Vietnam will have to abide by the provisions of the Asean (Association of Southeast Asian Nations) Free Trade Area.

While restrictions on some key products will remain, including a ban on some dangerous items, the decision has lifted the trading ban on finished wooden products, except sawn timber and logs.

The decision states that the state will encourage exports of processed timber products where checks have been carried out on the origin of wood at the areas of exploitation. The Finance Ministry is formulating a policy of tax incentives to boost domestic production of finished wooden products.

Export restrictions will remain on garments because of quotas imposed by importing nations. Negotiations are unde rway to have the quotas removed, based on the volume of annual production and multilateral and bilateral agreements signed by the government on garment and textiles. The ratio of garment and textiles quotas granted through tenders will increase every year, gradually replacing the system of allocating quotas.

The allocation of quotas for enterprises in Hanoi, HCM City, Hai Phong and Da Nang will be done by the municipal People's Committee. Quota allocation for all other firms will remain with the MoT.

From now until 2005, the government will use internationally recognised trade protection measures including tariff rates, tax ceilings, anti-dumping duties and environmental protection charges. These tools will allow the country to retain some supervision over imports and exports, while satisfying standards set by international and regional trade bodies, the minister said.

One major outcome of the decision is that only seven items - petrol, glass, iron, vegetable oil, sugar, motorbike and nine-seat motorised vehicles - require a trading license from the ministry.

And for the first quarter of this year, state-run industry in Hanoi has increased its gross domestic product (GDP) by 9.1 percent over the same period last year. Of the 20 developing sectors, textiles, garment manufacturing, chemical industry, electric facilities and rubber production have proved especially beneficial to the economy.

Companies with record increases are Rang Dong Lamp and Vacuum Flask with 35.7 percent, Dong Xuan Textile with 47.2 percent, Thang Long Garment with 77.4 percent, Hanoi shoes with 198.8 percent and Hanoi Soap with a 233 percent raise over last year.

Meanwhile, industrial production of non-state industry in 12 districts has also developed, by 20.8 percent in the first quarter. Of which, individual economic income has increased by 45.6 percent while the co-operative area has increased by 40.3 percent.

In this competitive market, major development potential is expected to belong to enterprises and stock companies rather than individual households and small industrial production units. Therefore, it will be necessary for these individual households and small economic units to diversify in order to remain competitive.

Last year, the Hanoi Industrial Parks' management board attracted 13 foreign direct investment projects (FDI) with the overall investment totalling US$24.1 million. For the first quarter this year, there were three FDI projects registered to operate in the industrial park sector, with the total registered capital of $1,860,000.

Three notable investments received by the management board earlier this month will bring in a combined revenue of $11 million.

During the first quarter, the industrial production value increased by 5.9 percent - the lowest increase for several years, said to be due to various factors, such as reduction of export contracts of electronics and the company relocation of VMEP, Kimberly Clark and Lever Haso.

Meanwhile, the improved time-keeping and general transport service has upped its revenue by 10.3 percent, and the general income of hotels and restaurants has increased by 16.2 percent. Tourist sector profits have increased by 15.4 percent and export turnover has seen an increase of 10 percent. In general, the start of the year has highlighted a positive trend within the country.

The development of industrial production has developed day by day. Analysts predict it will meet the demand of the socio-economic development of the city, both at present, and in the future.

(Asia Pulse)

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