Viet Nam - A Guide for Business and Investment - asean-korea centre

APPENDIX ISummary of WTO commitmentsThe package of Vietnam’s accession documents consists of:• Vietnam’s commitments ongoods – the 560-page list for“schedule of tariffs, quotas andceilings on agricultural subsidies,and in some cases thetimetable for phasing in thecuts• Vietnam’s commitments onservices – the 60-page document(also a “schedule”) describingin which services itis giving access to foreignservice providers and any additionalconditions, includinglimits on foreign ownership• The working party’s 260-pagereport – describing Vietnam’slegal and institutional set upfor trade, along with commitmentsit has made in many ofthese areas.These are some highlights:GOODS: Schedule of Concessionsand Commitments onGoods For the majority of agriculturaland non-agricultural goods,Vietnam is promising ceilings (or“bound” rates) on duties rangingbetween zero and 35%. Some ofthese invoice reductions phasedover periods up to 2014, the preciseend date varying from productto product.Among products with higher ceilingsare: alcoholic drinks, tobaccoproducts, instant coffee and somerelated products, new and usedmotor vehicles and components,and roof tiles. Used vehicles lessthan five years old can be chargedadditional flat-rate duties up tospecified limits.These “bound” rates are legal ceilings.The actual duties that Vietnamcan charge (the “applied” rates)can be lower than the committedrates. Among the details of Vietnam’scommitments is a promisenot to charge higher applied rateson rapeseed (also known as cotzaor canola) and derived meal, oiland other products than the dutiesactually charged on soy products– allowing the oilseed products tocompete with soy.In the separate working party report,Vietnam has also reservedthe right to charge applied dutiesin the form of specific duties (e.g.dollars per ton) instead of percentagesof the price (“ad valorem”) solong as the result stays below thecommitted ceilings.A handful of products are goingto be protected with tariff quotas(higher duties for quantities outsidethe quotas, and lower duties forquantities within the quotas): eggs,tobacco, sugar, and salt (whichVietnam says is the main incomesource for 100,000 poor farmersin coastal areas). But Vietnam willexpand the quotas until they disappearaccording to agreed timetables.Vietnam has also signed the “plurilateral”Information TechnologyAgreement (“plurilateral” meaningonly some WTO members havesigned). For these products, Vietnamhas agreed to allow importsin duty-free. In some cases, thezero duty will apply immediately;in others it will be achieved graduallyover periods ending in 2010 to2014.In agriculture, Vietnam has promisednot to subsidize exports. It willbe allowed to support its farmersdomestically with trade-distortingsupports (“Amber Box” or “AggregateMeasurement of Support”, i.e.supports that have a direct impacton prices or quantities produced)of up to 3,961.5 billion Vietnamesedong (currently about US$246million) in addition to the usual allowancefor developing countries(known as “deminimis”) of up to10% of the value of domestic agriculturalproduction. As with all WTOmembers, Vietnam can also spendunlimited amounts on supportsthat do not distort trade (“GreenBox” supports).SERVICES: Schedule of SpecificCommitments on Trade in ServicesVietnam has made commitmentson a range of services. In somecases Vietnam reserves the right tolimit foreign ownership of servicecompanies operating in Vietnam– for example in some telecommunicationsservices the eventuallimits can be 49% or 65%, dependingon the service. In a few cases,permitted foreign ownership is im-APPENDIX IViet Nam - A Guide for Business and Investment 57