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Viet Nam’s accession to the WTO – Implications of the negotiation outcomes

I. Goods

1. Tariffs

1.1 Specific features of Viet Nam's tariff commitments

Viet Nam committed to bind the whole tariff schedule including 10,600 tariff lines, of which the rates of about 3,800 lines will be reduced and eliminated, 3,700 be bound at current rates, 3,170 lines be bound at higher rates than current ones e.g. gasoline, metals, chemicals, some types of transportation means. BTA: 247 tariff lines.

For agricultural products, the average committed tariff rate is 25.2% at the time of accession and will be reduced to 21% finally. The average committed tariff rate of industrial products is 16.1% at the time of accession and will be 12.6% finally. Below is the average tariff rates committed for main group of products:

Group of products Bound tariff rate upon accession (%) Final bound tariff rate (%)

1. Agricultural products 25.2 21.0

2. Fishes and fish products 29.1 18.0

3. Petroleum oil and gas 36.8 36.6

4. Wood, papers 14.6 10.5

5. Textile and garment 13.7 13.7

6. Leather and rubber products 19.1 14.6

7. Metals 14.8 11.4

8. Chemicals 11.1 6.9

9. Transport means 46.9 37.4

10. Mechanical machinery & equipment 9.2 7.3

11. Electrical machinery & equipment 13.9 9.5

12. Mineral resources 16.1 14.1

13. Other manufactured products 12.9 10.2

Average rate of the whole tariff schedule 17.2 13.4

In addition, Viet Nam also committed to such sector arrangments as information technology (ITA) products, textile & garment, medical equipments i.e. tariff rates of all products belonging to these sectors will be eliminated after a period of implementation. Detailed HS codes and tariff elimination schedule of ITA products are set out in the Attachment B of the Schedule of Concessions and Commitments on Goods. The last year of implementation of ITA tariff elimination is 2014.

Viet Nam also committed to participate partially to another sectors arrangements e.g. aircraft parts, chemicals and construction equipments. The implementation period of tariff elimination of such arrangements is 3 – 5 years.

Commitments on sector arrangements

Sector Number of tariff lines

Current MFN tariff rate (%)

Final bound rate (%)

Information technology products – 100% 330 5.2 0

Chemicals – 81% 1,300/1,600 6.8 4.4

Civil aircraft – almost 100% 89 4.2 2.6

Textile & garment – 100% 1170 37.2 13.2

Medical equipment – 100% 81 2.6 0

1.2 Products subject to significant tariff reduction

No Description Current MFN rate

(%)

Initial bound rate (%)

Final bound rate (%)

Implementation period

1 Pork 30 30 15 5 years2 Processed meat 50 40 22 5 years3 Beer 80 65 35 5 years4 Spirits 65 65 45 – 50 5 - 6 years5 Television 50 40 25 5 years6 Air conditioner 50 40 25 3 years7 Washing machines 40 38 25 4 years8 Textile & garment

products37,3 37,3 13,7 Upon accession

9 Shoes 50 40 30 5 years10 Cars with cylinder not

less than 2,500 cc consuming gasoline

90 90 52 12 years

11 Cars with cylinder not less than 2,500 cc,

90 90 47 10 years

12 Trucks with capacity of less than 5 tonnes

100 80 50 10 years

1.3 Difficult sectors in the negotiation

Obviously, negotiation has focused on those products that have been under high protection. They included agricultural products e.g. beef, pork, processed meat, milk in

form of raw materials and finished milk products, spirits, cigarettes, and industrial products e.g. electronic equipments, textile and garment products, motor-vehicles.

Viet Nam had tried to maintain a reasonable protection for agricultural products. Tariff rates for important products such as bovine meat, poultry’s meat, vegetables, fruits etc. are not reduced significantly.

In terms of industrial products, key sectors of national economy such as cement, steel, construction materials are still under reasonable protection. There will be significant reduction in tariff rates of motor-vehicles, however, the implementation period is quite long i.e. 5 - 12 years since the date of accession.

2. Products subject to quantitative restriction before WTO accession

2.1 Products subject to import prohibition

No Description1 Weapons, ammunition, explosive materials and military technical equipment.

2 All types of drugs of addiction3 Toxic chemical4 Pornographic or reationary cultural items; Children's toys which have an adverse

impact on personal development and/or social order and safety. 5 All types of firecrakers (except for flares used for marine safety and other purposes in

accordance with the separate provision of the Prime Minister of the Government 6 Cigarettes, cigars and other forms of tobacco finished products7 Second-hand consumer goods including these groups of goods :

- Textile and garments, shoes and sandals, clothes; - Electronic goods; - Refrigerator; - Household electrical goods; - Furniture and items of interior decoration; - Households goods including porceland, terracotta and china; glassware; metalware; resin, rubber, and plastic articles and other materials.

8 Right-hand-drive automobiles (including knocked down form vehicles, and vehicles where the right-hand-drive has been transferred to left-hand-drive prior to importation into Vietnam), except all types of specialised transport means used in narrow places including cranes, canal and drain digging machines, road sweepers, road watering vehicles, rubbish collecting vehicles, road surfacing vehicles, passenger vehicles at airport, and fork-lift trucks at warehouses and ports.

9Second-hand materials and means of transport, including :

- Second-hand frames, tires, tybes accessories and engines of automobiles, tractors, and two-wheeled and three wheeled vehicles;

- Second-hand internal combustion engines with 30CV or less capacity; all types of secon-hand machines attached to internal combustion engines with 30CV or less

- Second-hand chassis attached to second-hand engines;

- Second-hand bicycles;

- Second-hand two-wheeled and three-wheeled vehicles;

- Second-hand first-aid vehicles;

- Second-hand passenger automobiles with or less than 16 seats (including trucks which transport both passengers and cargo in one cabin);

- Second-hand passenger automobiles with 16 seats which are more than 5 years old as from the year of import; - Transport trucks of GVW less than 5 tons (including trucks which transport both passengers and cargo in separate sections of the one cabin) which are more than 5 years old as from the year of import.

10 Products containing asbestos of the group of amphibole. 11 All types of specialized encrypted machines and cipher software programs used for

protection of State secrets.

2.2 Products subject to import licence (until 31 December 2002)

No DescriptionBlack and white Portland cement.White smooth glass of 1.5-12mm thicknessBrown coloured glass of 5-12mm thickness- Some kinds of round bar steel, angle steel and section steel; - Some kinds of welded tube steel; - Some kinds of steel plate and plating. Some kinds of refined vegetable oil in liquid formRefined sugar and raw sugarTwo-wheeled and three-wheeled complete motor vehicles which are 100% new, and complete parts for assembly which have not registered a localization ratio; incomplete bodies and engines of two-wheeled and three wheeled motor vehicles of all kinds, except for the types which belong to complete parts for assembly which have registered a localization ratio. New minibuses of 9 seats or less (including vehicles which transport both passengers and cargo in the same section of the one cabin)

3. Products subject to quantitative restriction elimination since WTO accession

No Description Note1 Cigarettes, cigars Subjec to tariff quota upon accession

2 Used motor-vehicles of less than 5 years usage

upon accession

3 Motorcycles with engine capacity exceeding 175 cm3

Subject to import licence since 31 May 2007

Difficult products in the negotiation: WTO members had put high pressure to ask Viet Nam to remove the import prohibition on cigarettes and cigars, used consumer goods, used motor-vehicles, used parts of motor-vehicles, motorcycles with engine capacity exceeding 175 cm3.

Viet Nam agreed to replace import prohibition by tariff quota on cigarettes and cigars and justified the restriction on imported cigarettes & cigars by domestic policy of smoking reduction.

With respect to used consumer goods, Viet Nam explained that import prohibition is the only one feasible measure that Viet Nam can apply in order to guarantee safety for domestic consumers.

Regarding used motor-vehicles, Viet Nam made a big concession when allowing importation of these products with less than 5 years usage upon accession. However, importation of used parts of used motor-vehicles are still prohibited.

4. Tariff quota

4.1 Products subjec to tariff quota before accession

No HS Description Quota volume In-quota-rate

Out-of-quota rate

Note

1 0401 Milk and cream, not concentrated

Upon demand 20% 30% TRQ was removed since 4/2005

2 0402 Concentrated milk and cream

Upon demand 10% - 30%

20% - 40%

TRQ was removed since 4/2005

3 0407 Eggs Upon demand 40% 80%4 1005 Maize Upon demand 5% 10% TRQ was

removed since 4/2005

5 2401 Tobacco leaves

29,774 tones 15% - 30%

80% - 100%

6 2501 Salt 200,000 tones 10% - 30%

60%

7 5201 52025203

Cotton Upon demand 0 - 10% 10% - 20%

TRQ was removed since 4/2005

4.2 Products subjec to tariff quota after accession

No Description HS In-quota-

rate (%)

Out-of-quota

rate upon accession

(%)

Final out-of-quota

rate (%)

Quota quantity

upon accession

Final quota

quantity

1 Eggs 0407 40 80 30,000 dozen

inf

2 Raw sugar 170111 25 100 85 55,000 mt inf3 Refined sugar 170199 30-60 100 854 Unmanufactured

tobacco 2401 30 100 80-90 31,000 mt inf

5 Salt 2501 15-30 15-30 15-30 150,000 mt infNote: Implementation period is 2009

Maize, milk materials and milk products, cotton were initially proposed to be subject to tariff quota, but at the end Viet Nam had decided not to apply tariff quota on these products as a concession to the US, EU and Australia.

II. Services

1. General commitments

Viet Nam has made commitments in 11 services sectors including 110 sub-sectors (in BTA: 8 sectors and 65 sub-sectors).

Foreign organizations and individuals will be allowed to buy shares in Vietnamese enterprises with maximum equity as stipulated in respective sector in the Schedule of specific commitments of Viet Nam. The maximum equity that foreign organizations and individuals are allowed to buy in Vietnamese banks is 30%.

Foreign enterprises will be allowed to send their management staff to work in Viet Nam but at least 20% of the management staff of such enterprises must be Vietnamese.

Foreign enterprises are not allowed to set up their commercial presence in Viet Nam in the form of branch except as otherwise regulated in each specific sector or sub-sector of the Schedule of specific commitments of Viet Nam.

Unlike BTA, Viet Nam committed to allow contractual service suppliers (CSS), who are are employees of a foreign enterprise having no commercial presence in Viet Nam to come to Viet Nam to provide computer and relating services and engineering services in Viet Nam.

2. Sectors and subsectors where significant commitments have been made (higher than BTA commitments)

Telecommunication services: High pressure had been put in this sector. Viet Nam’s commitments in BTA was considered by WTO members as an initial basis for negotiation.

- Falicity-based telecommunication services: no more concessiond are made as compared with those under the BTA. Foreign services suppliers are only allowed to enter into joint ventures with maximum capital contribution of 49% with licensed Vietnamese partners.

- Non-based facility based telecommunication services: Non-state enterprises will be allowed to provide non-based facility telecomunication services and to establish joint venture with foreign partners according to the regulation in the Schedule of specific commitments. Within 3 years from the date of accession, foreign services suppliers will only be allowed to enter into joint ventures with licensed Vietnamese partners with maximum capital contribution of 51%, 3 years after accession, this restriction will be expanded to 65% and foreign suppliers will be free to select Vietnamese partners.

- VPN and value-added telecommunication services: foreign suppliers are free to select Vietnamese joint venture partners upon accession with maximum capital contribution of up to 70%.

Viet Nam will eliminate the system of calls quota allocated among service suppliers.

Banking services: Foreign commercial banks will be allowed to open representative office, joint venture banks with foreign capital contribution not exceeding 50% of chartered capital, joint venture financial leasing companies, 100% foreign-invested financial leasing company, join venture finance company and 100% foreign-invested finance company. 100%-foreign-owned banks in Viet Nam will be allowed to be opened since 1 April 2007. Foreign banks are allowed to open branches in Viet Nam but these branches will not be allowed to open sub-branches. Foreign banks' branches will not be allowed to open transaction offices outside these branches but the number of branches will not be limited. Foreign banks will be granted MFN and national treatment in terms of installing and operating ATMs. Since 1 January 2011 foreign bank branches in Viet Nam will be allowed to accept deposits in VND without limitation. Upon accession, foreign credit institutions are allowed to issue credit cards on a national treatment basis.

Securities services: Upon accession, foreign securities service suppliers shall be permitted to establish representative offices and joint ventures with Vietnamese partners in which foreign capital contribution not exceeding 49%. Foreign securities service suppliers are allowed to provide such financial information, financial advice, intermediate and securities business supporting services in mode 2 (cross-border supply). Foreign securities companies are allowed to establish joint ventures with Vietnamese partners with maximum capital contribution of 49% upon accession and 100% 5 years later.

Services incidental to mining: this service was required by many partners as it is a hot topic of the Doha Round. Viet Nam has allowed foreign enterprises to establish 100%

foreign-owned companies to supply services for supporting oil and gas exploitation in Viet Nam 5 years after accession. Foreign companies exploring and exploiting natural resources must be selected by the government.

3. Sectors and subsectors where commitments are in similar to those under the BTA

Insurance services: The licensing criteria for insurance and securities services will comply with Viet Nam’s Schedule of specific commitments and relevant commitments in the Working Party Report on accession of Viet Nam to the WTO from the date of accession. The licensing for foreign non-life insurance companies will be in conformity with the standards and principles of the International Association of Insurance Supervisors. Upon accession, 100% foreign-invested insurance enterprises shall not be allowed to engage in statutory insurance business, including motor vehicle third party liability, insurance in construction and installation, insurance for oil and gas projects, and insurance for projects and construction works of high danger to public security and the environment. This limitation will be abolished 1 January 2008. After 5 years from the date of accession, non-life branches of foreign insurance enterprises shall be permitted, subject to prudential regulations.

Distribution services: Upon accession, foreign enterprises will be allowed to set up joint ventures with Vietnamese partners with maximum foreign capital contribution of 49% to provide distribution services, this capital limitation will be removed since 1 January 2008 and since 1 January 2009 100% foreign capital will be allowed. Upon accession, foreign-invested companies engaging in distribution services will be permitted to engage in the commission agents, wholesale and retail business of all legally imported and domestically produced products except for: (excluding tyres of airplanes); papers; tractors; motor vehicles; cars and motorcycles; iron and steel; audiovisual devices; wines and spirits; and fertilizers. Since 1 January 2009, foreign-invested companies engaging in distribution services will be permitted to engage in distribution services for tractors, motor vehicles; cars and motorcycles. The establishment of outlets for retail services (beyond the first one) will be determined by the government on case by case basis.

Hotel and restaurant services: foreign services suppliers will be allowed to invest in Viet Nam to provide these services, however, within 8 years from the date of accession the services provided should be in parallel with investment in hotel construction, renovation, restoration or acquisition. None afterwards.

Travel agencies and tour operator services: foreign service suppliers are permitted to provide services in the form of joint ventures with Vietnamese partners with no limitation on foreign capital contribution.

Legal services: foreign lawyers organizations are permitted to establish commercial presence in Viet Nam in the forms of branches of foreign lawyers organizations; subsidiaries of foreign lawyers organizations; foreign law firms; partnerships between foreign lawyers organizations and Viet Nam's law partnerships. Commercial presences of foreign lawyers organizations are permitted to make consultations on Vietnamese laws if

the consulting lawyers have graduated from a Vietnamese law college and satisfy requirements applied to like Vietnamese law practitioners.

Accounting and auditing and bookkeeping services: foreign enterprises are allowed to provide these services in Viet Nam without limitation.

Architectural services: within 2 years from the date of WTO accession, 100% foreign-invested enterprises may only provide services to foreign-invested enterprises in Viet Nam.

Engineering services: within 2 years from the date of WTO accession, 100% foreign-invested enterprises may only provide services to foreign-invested enterprises in Viet Nam.

Advertising services: upon accession, foreign service suppliers are permitted to establish joint venture with maximum capital contribution not exceeding 51% or business cooperation contract with Vietnamese partners who are legally authorized to do advertising services. Since 1 January 2009, there shall be no limitation on foreign capital contribution in the joint ventures.

Market research services: upon accession, foreign service suppliers are permitted to establish joint venture with maximum capital contribution not exceeding 51% or business cooperation contract with Vietnamese partners who are legally authorized to do advertising services. Since 1 January 2009, there shall be no limitation on foreign capital contribution in the joint ventures.

Audio-visual services: Foreign enterprises are only allowed to enter into business cooperation contracts or joint ventures to produce motion picture with Vietnamese partners who are authorized to provide these services in Viet Nam. Foreign capital contribution may not exceed 51% of the legal capital of the joint venture. Distribution of motion picture is only allowed through business cooperation contract or joint venture with Vietnamese partners who are authorized to provide these services in Viet Nam. Foreign capital contribution shall not exceed 51% of the legal capital of the joint venture. Viet Nam's houses of culture, film projection place, public cinema clubs and societies and mobile projection teams are not allowed to engage in business cooperation contract or joint-venture with foreign service suppliers.

Construction and related engineering services: within 2 years from the date of accession, 100% foreign-invested enterprises could only provide services to foreign-invested enterprises and foreign-funded projects in Viet Nam. After 3 years from the date of accession, branching is allowed.

Educational services: Apart from secondary education services, foreign suppliers must set up joint ventures with Vietnamese partners upon accession to provide education services. Majority foreign ownership of such joint ventures is allowed. Since 1 January 2009, 100% foreign-invested education entities will be permitted.

Environmental services: for providing sewage, refuse disposal, cleaning exhaust gases and noise abatement services, foreign services suppliers will be allowed to enter into joint ventures with maximum capital contribution of 51% within 4 years from the date of accession, after this period the above limitation will be removed. However, services supplied in the exercise of governmental authority may be subject to public monopolies or exclusive rights granted to Vietnamese private operators. Foreign-invested enterprises are restricted from collecting refuse directly from households.

Health related and social services: foreign service suppliers are permitted to provide services through the establishment of 100% foreign-invested hospital, joint venture with Vietnamese partners or through business cooperation contract. The minimum investment capital for a commercial presence in hospital services must be at least US$20 million for a hospital, US$2 million for a policlinic unit and US$200,000 for a specialty unit.

Recreational, cultural and sporting services: only 5 years from the date of accession, joint ventures with foreign capital contribution not exceeding 49% will be permitted for entertainment services. Electronic game business will only be allowed through business cooperation contract or joint-venture with Vietnamese partners who are specifically authorized to provide these services. Foreign capital contribution will not be exceed 49% of the legal capital of the joint ventures.

4. Sectors and subsectors where no commitments have been made.

Foreign services suppliers are not allowed to engage in printing and publishing services in Viet Nam.

5. MFN exemption list

Viet Nam reserves MFN exemption in the following sectors:

- Bilateral Investment Treaties signed with several WTO members: some preferential treatment under these treaties will not be extended to all WTO members.

- Audiovisual services: preferential treatment in producing, distributing and broadcasting TV programs, motion pictures will only be granted to WTO members signing Cultural co-operation agreements with Viet Nam.

- Maritime transport service: Discriminatory treatment in those activities relating to normal business operations of fully owned subsidiaries of foreign shipping companies under bilateral agreements that Viet Nam signed with some WTO members will be reserved. However, this exemption will only be applied within 5 years from the date of accession. In addition, preferential treatment under Maritime Agreement between Viet Nam and Singapore will be maintained within 10 years from the date of accession.

III. Multilateral rules

1. Removal of import prohibition on some products

During the WTO accession negotiation, Viet Nam has committed to remove import prohibition on cigars and cigarettes, used motor vehicles, motorcycles having engines' capacities greater than 175 cm3 , which were under the import prohibition list of Decision No. 46/2001/QD-TTg of the Prime Minister on management of import and export during 2001 - 2005.

- Policies that have been and to be adjusted: Decree No. 12/2006/ND-CP dated 31 January 2006 guiding the implementation of the new Commercial Law has been issued to replace the above Decision No. 46.

- Affected industries and the extent to which these industries are affected: Viet Nam currently does not manufacture large motorcycles, domestic cigarettes consumption is not encouraged for the purpose of human health protection, therefore, the most affected industry would be automobile as automobile products of Viet Nam are not considered as competitive as compared with imported ones.

- Comparison with commitments under BTA: The list of import prohibition in the BTA includes: cigarettes, used consumer goods, cars with right hand drive, used spare parts of automobiles of all kinds, motorbikes and motor tricycles, used internal combustion engines with capacity of less than 30 CV, motorcycles, scooters and motor tricycles with cylinder of 175 cc and higher.

2. Trading rights

Before acceding to the WTO, Viet Nam did not grant foreign direct invested enterprises full trading right, i.e. they can only import those products described in their investment licences to Viet Nam for supporting their production. WTO members have requested Viet Nam to grant full trading right to FDI enterprises and foreign individuals.

- Commitment: Viet Nam has commited to granted trading right i.e. the right to engage in import and export activities (this right does not include the right to distribute goods in Viet Nam) to all foreign enterprises including those who do not have commercial presence in Viet Nam and individuals since 1 January 2007. Trading right includes the right to sell imported products to those who have distribution right in Viet Nam. These enterprises and individuals will be allowed to import and export all kinds of goods except for those subject to state trading enterprises and those subject to a transitional period.

- Products subject to a transitional period for full import trading right:

Import Trading Rights

HS Description Schedule Rationale Pharmaceutical products

HS Description Schedule Rationale3003 Medicaments nesoi of mixtures, not dosage etc

form...2009 Essential to human life

3003.10. 10

- - Containing amoxicillin (INN) or its salts

3003.10. 20

- - Containing ampicillin (INN) or its salts

3003.10. 90

- - Other

3003.20. 00

- Containing other antibiotics

3003.31. 00

- - Containing insulin

3003.39. 00

- - Other

3003.40. 10

- - Antimalarial

3003.40. 90

- - Other

3003.90. 10

- - Containing vitamins

3003.90. 20

- - Containing analgesics or antipyretics, whether or not containing antihistamines

3003.90. 30

- - Other preparations for the treatment of coughs and colds, whether or not containing antihistamines

3003.90. 40

- - Antimalarial

3003.90. 90

- - Other

3004 Medicaments nesoi, mixed or not, in dosage etc form...

2009 Essential to human life

3004.10. 11

- - - Containing penicillin G or its salts (excluding penicillin G benzathin)

3004.10. 12

- - - Containing phenoxymethyl penicillin or its salts

3004.10. 13

- - - Containing ampicillin or its salts, for taking orally

3004.10. 14

- - - Containing amoxycillin or its salts, for taking orally

3004.10. 19

- - - Other

3004.10. 21

- - - Ointment

3004.10. 29

- - - Other

3004.20. 11

- - - For taking orally

3004.20. 12

- - - Ointment

3004.20. 19

- - - Other

3004.20. 21


HS Description Schedule Rationale3004.20. 22

- - - Ointment

3004.20. 29

- - - Other

3004.20. 31


3004.20. 32

- - - Ointment

3004.20. 39

- - - Other

3004.20. 41

- - - Containing gentamycines or derivatives thereof, for injection

3004.20. 42

- - - Containing lincomycins or derivatives thereof, for taking orally

3004.20. 43

- - - Ointments

3004.20. 49

- - - Other

3004.20. 51


3004.20. 52

- - - Ointments

3004.20. 59

- - - Other

3004.20. 60

- - Containing isoniazide, pyrazinamide or derivatives thereof, for taking orally

3004.20. 90

- - Other

3004.31. 00

- - Containing insulin

3004.32. 10

- - - Containing hydrocortisone sodium succinate

3004.32. 20

- - - Containing dexamethasone or its derivatives

3004.32. 30

- - - Containing fluocinolone acetonide

3004.32. 90

- - - Other

3004.39. 10

- - - Containing adrenaline

3004.39. 90

- - - Other

3004.40. 10

- - Containing morphine or its derivatives, for injection

3004.40. 20

- - Containing quinine hydrochloride or dihydrochloride, for injection

3004.40. 30

- - Containing quinine sulphate or bisulphate, for taking orally

3004.40. 40

- - Containing quinine or its salts and anti-malarial substances, other than goods of subheadings 3004.10 to 30

3004.40. 50

- - Containing papaverine or berberine


- - Containing theophylline

3004.40. 70

- - Containing atropin sulphate

3004.40. 90

- - Other

3004.50. 10

- - Syrups and drops of vitamins, of a kind suitable for children

3004.50. 20

- - Containing vitamins A, other than goods of subheading 3004.50.10 and 3004.50.79

3004.50. 30

- - Containing vitamins B1, B2, B6 or B12 , other than goods of subheadings 3004.50.10, 3004.50.71 and 3004.50.79

3004.50. 40

- - Containing vitamins C, other than goods of subheadings 3004.50.10 and 3004.50.79

3004.50. 50

- - Containing vitamins PP, other than goods of subheadings 3004.50.10 and 3004.50.79

3004.50. 60

- - Containing other vitamins, other than goods of subheadings 3004.50.10 and 3004.50.79

3004.50. 71

- - - Containing B complex vitamins

3004.50. 79

- - - Other

3004.50. 90

- - Other

3004.90. 10

- - Specialised medicines for cancer, AIDS or other intractable diseases

3004.90. 21

- - - Sodium chloride solution

3004.90. 22

- - - 5% glucose solution

3004.90. 23

- - - 30% glucose solution

3004.90. 29

- - - Other

3004.90. 30

- - Antiseptics

3004.90. 41

- - - Containing procaine hydrochloride

3004.90. 49

- - - Other

3004.90. 51

- - - Containing acetylsalicylic acid, paracetamol or dipyrone (INN)

3004.90. 52

- - - Containing chlorpheniramine maleate

3004.90. 53

- - - Containing diclofenac

3004.90. 54

- - - Analgesic balm oil, solid or liquid

3004.90. 59

- - - Other

3004.90. 61

- - - Containing artemisinin, artesunate or chloroquine (INN)


- - - Containing primaquine

3004.90. 69

- - - Other

3004.90. 71

- - - Containing piperazine or mebendazole (INN)

3004.90. 72

- - - Containing dichlorophen (INN)

3004.90. 79

- - - Other

3004.90. 80

- - Transdermal therapeutic systems (TTS) patches for cancer or heart diseases

3004.90. 91

- - - Containing sulpiride (INN), cimetidine (INN), ranitidine (INN), aluminium hydroxide or magnesium hydroxide or oresol

3004.90. 92

- - - Containing piroxicam (INN) or ibuprofen (INN)

3004.90. 93

- - - Containing phenobarbital, diazepam, chlorpromazine

3004.90. 94

- - - Containing salbutamol (INN)

3004.90. 95

- - - Closed sterile water for inhalation, pharmaceutical grade

3004.90. 96

- - - Containing o-methoxyphenyl glyceryl ether (Guaifenesin)

3004.90. 97

- - - Nose-drop medicaments containing naphazoline, xylometazoline or oxymetazoline

3004.90. 98

- - - Sorbitol

3004.90. 99

- - - Other

3006 Pharmaceutical goods in note 4 to chapter 30... 2009 Essential to human life3006.10. 00

- Sterile surgical catgut, similar sterile suture materials and sterile tissue adhesivesfor surgical wound closure; sterile laminaria and sterile laminaria tents; sterile absorbable surgical or dental haemostatics

3006.20. 00

- Blood-grouping reagents

3006.30. 10

- - Barium sulfate (for taking orally)

3006.30. 20

- - Reagents of microbial origin for veterinary biological diagnosis

3006.30. 30

- - Other microbial diagnostic reagents

3006.30. 90

- - Other

3006.40. 10

- - Dental cements and other dental fillings

3006.40. 20

- - Bone reconstruction cements

3006.50. 00

- First-aid boxes and kits


- Chemical contraceptive preparations based on hormones, on other products of heading 29.37 or on spermicides

3006.70. 00

- Gel preparations designed to be used in human or veterinary medicine as a lubricant for parts of the body for surgical operations or physical examinations or as a coupling agent between the body and medical instruments

3006.80. 00

- Waste pharmaceuticals

Cinematographic film3706 Motion-picture film, exposed and developed... 2009 Sensitive to public

morals3706.10. 10

- - Newsreels, travelogues, technical and scientific films

3706.10. 20

- - Consisting only of sound track

3706.10. 91

- - - With picture taken abroad

3706.10. 99

- - - Other

3706.90. 10

- - Newsreels, travelogues, technical and scientific films

3706.90. 20

- - Consisting only of sound track

3706.90. 90

- - Other

Unused postage, printed cards, calendars...4907 Unused postage, check forms, banknotes, stock,

etc...2009 Sensitive to public

morals4907.00. 10

- Banknotes, being legal tender

4907.00. 20

- Unused postage stamps

4907.00. 30

- Revenue or similar stamps

4907.00. 40

- Stock, share or bond certificates and similar documents of title; cheque forms

4907.00. 90

- Other

4909 Printed or illustrated post cards, greeting cards, etc....

2009 Sensitive to public morals

4909.00. 00

Printed or illustrated postcards; printed cards bearing personal greetings, messages or announcements, whether or not illustrated, with or without envelopes or trimmings

4910 Calendars, calendar blocks of any kind, printed...


4910.00. 00

Calendars of any kind, printed, including calendar blocks

4911 Printed matter nesoi, incl print pictures & photos...



- Trade advertising material, commercial catalogues and the like

4911.91. 10

- - - Anatomical or botanical instruction charts and diagrams and the like

4911.91. 20

- - - Other wall pictures and diagrams for instructional purposes; pictures, designs and photographs for incorporation into books, advertising circulars or commercial catalogues

4911.91. 90

- - - Other

4911.99. 10

- - - Printed cards for jewellery or for small objects of personal adornment or for Articles of personal use normally carried in the pocket, in the handbag or on the person

4911.99. 20

- - - Printed stickers for explosives

4911.99. 90

- - - Other

Industrial printers8442 Machinery etc nesoi for type-setting, making

printing plates etc...2009 Sensitive to public order

8442.10. 10

- - Electrically operated

8442.10. 20

- - Not electrically operated

8442.20. 10


8442.20. 20


8442.30. 11

- - - Impressed flongs and matrices

8442.30. 12

- - - Machinery for type founding machines

8442.30. 19

- - - Other

8442.30. 21

- - - Impressed flongs and matrices

8442.30. 22

- - - Machinery for type founding machines

8442.30. 29

- - - Other

8442.40. 10

- - Of electrically operated machines, apparatus or equipment

8442.40. 21

- - - Of type-founding or type-setting machinery

8442.40. 29

- - - Other

8442.50. 10

- - Printing type of all kinds

8442.50. 90

- - Other

HS Description Schedule Rationale8443 Print machinery excluding ink-jet printers

(HS 84435100), machinery for used ancillary to printing nesoi...


8443.11. 10

- - - Electrically operated

8443.11. 20

- - - Not electrically operated

8443.12. 10


8443.12. 20


8443.19. 10


8443.19. 20


8443.21. 10


8443.21. 20


8443.29. 10


8443.29. 20


8443.30. 10


8443.30. 20


8443.40. 10


8443.40. 20


8443.59. 10

- - - Platen presses

8443.59. 20

- - - Screen printing machinery for the manufacture of PCB/PWBs [ITA/2 (AS2)]

8443.59. 90

- - - Other

8443.60. 10


8443.60. 20


8443.90. 10

- - Of screen printing machinery for the manufacture of PCB/PWBs [ITA/2 (AS2)]

8443.90. 20

- - Other, for electrically operated machines

8443.90. 90

- - Other

HS Description Schedule Rationale Other machinery8525 Transmission apparatus for radio-telephony etc;

TV camera & other video camera recorders excluding mobile phones (HS 852520) and consumer cameras (HS 85254010)


8525.10. 10

- - For radio-broadcasting

8525.10. 21

- - - Video senders

8525.10. 22

- - - Central monitoring systems

8525.10. 23

- - - Telemetry monitoring systems

8525.10. 29

- - - Other

8525.10. 30

- - Data compression tools

8525.30. 90

- - Other

8525.40. 20

- - Other still image video cameras

8525.40. 30

- - Digital cameras

8525.40. 40

- - Other video camera recorders

8526 Radar apparatus, radio navigational aid apparatus and radio remote control apparatus


8526.10. 90

- - Other

8526.91. 90

- - - Other

8526.92. 00

- - Radio remote control apparatus

Note: For the purpose of this Table, schedule starts from 1 January of the specified year.

Export Trading Rights

HS Description Schedule Rationale Cereals1006 Rice 2011 Food security1006.10.10 - - Suitable for sowing 1006.10.90 - - Other 1006.20.10 - - Thai Hom Mali rice 1006.20.90 - - Other 1006.30.11 - - - Whole1006.30.12 - - - Not more than 5% broken 1006.30.13 - - - More than 5% but not more

than 10% broken 1006.30.14 - - - More than 10% but not more

than 25% broken 1006.30.19 - - - Other 1006.30.20 - - Parboiled rice

HS Description Schedule Rationale1006.30.30 - - Glutinous rice (pulot)1006.30.40 - - Basmati rice1006.30.50 - - Thai Hom Mali rice 1006.30.61 - - - Whole1006.30.62 - - - Not more than 5% broken 1006.30.63 - - - More than 5% but not more

than 10% broken1006.30.64 - - - More than 10% but not more

than 25% broken 1006.30.69 - - - Other 1006.40.00 - Broken rice

Note: For the purpose of this Table, schedule starts from 1 January of the specified year.

- Comparison with commitments under BTA: in addition to what listed in the above table, those subject to import trading right restriction under the BTA includes many other commodities e.g. live animals, meat, milk products, rice, fruits, vegetable, beer, alcohol drinks, tobacco products, crude oil, chemicals, books, newspapers, woven fabrics, steel, machinery, transportation means, postage etc (detailed list can be provided if necessary) with transitional periods from 3 to 7 years since the effective date of the BTA. Another difference is according to the BTA, trading right does not include the right to sell imported goods to legal distributors in Viet Nam.

3. State-owned and state trading enterprises

3.1 Products subject to state trading:

No HS Description Rationale1. 2402 Cigars, cheroots, cigarillos and cigarettes... Both domestic

production and consumption are restricted

2402.10.00 - Cigars, cheroots and cigarillos, containing tobacco2402.20.10 - - Beedies2402.20.90 - - Other2402.90.10 - - Cigars, cheroots and cigarillos of tobacco

substitutes 2402.90.20 - - Cigarettes of tobacco substitutes 2403 Other manufactured tobacco and manufactured tobacco

...2403.10.11 - - - Blended tobacco2403.10.19 - - - Other 2403.10.21 - - - Blended tobacco2403.10.29 - - - Other2403.10.90 - - Other2403.91.00 - - "Homogenised" or "reconstituted" tobacco2403.99.10 - - - Tobacco extracts and essences2403.99.30 - - - Manufactured tobacco substitutes2403.99.40 - - - Snuff2403.99.50 - - - Smokeless tobacco, including chewing and

sucking tobacco2403.99.60 - - - Ang Hoon 2403.99.90 - - - Other

2. 2709 Crude oil from petroleum and bituminous minerals... Natural monopoly2709.00. 10 - Crude petroleum oil 2709.00. 20 - Condensate 2709.00. 90 - Other 2710 Oil (not crude) from petrol & bitum mineral etc....2710. 11. 11 - - - Motor spirit, premium leaded 2710. 11. 12 - - - Motor spirit, premium unleaded 2710. 11. 13 - - - Motor spirit, regular leaded 2710. 11. 14 - - - Motor spirit, regular unleaded 2710. 11. 15 - - - Other motor spirit, leaded 2710. 11. 16 - - - Other motor spirit, unleaded 2710. 11. 17 - - - Aviation spirit 2710. 11. 18 - - - Tetrapropylene 2710. 11. 21 - - - White spirit 2710. 11. 22 - - - Low aromatic solvents containing by weight less

than 1% aromatic content 2710. 11. 23 - - - Other solvent spirits 2710. 11. 24 - - - Naphtha, reformate or preparations for preparing

spirits 2710. 11. 25 - - - Other light oil 2710. 11. 29 - - - Other 2710. 19. 11 - - - - Lamp kerosene 2710. 19. 12 - - - - Other kerosene, including vaporising oil 2710. 19. 13 - - - - Aviation turbine fuel (jet fuel) having a flash

point of not less than 23o C 2710. 19. 14 - - - - Aviation turbine fuel (jet fuel) having a flash

point of less than 23oC 2710. 19. 15 - - - - Normal paraffin

No HS Description Rationale2710. 19. 19 - - - - Other medium oils and preparations 2710. 19. 21 - - - - Topped crudes 2710. 19. 22 - - - - Carbon black feedstock oil 2710. 19. 23 - - - - Lubricating oil basestock 2710. 19. 24 - - - - Lubricating oils for aircraft engines 2710. 19. 25 - - - - Other lubricating oil 2710. 19. 26 - - - - Lubricating greases 2710. 19. 27 - - - - Hydraulic brake fluid 2710. 19. 28 - - - - Oil for transformer or circuit breakers 2710. 19. 31 - - - - High speed diesel fuel 2710. 19. 32 - - - - Other diesel fuel 2710. 19. 33 - - - - Other fuel oils 2710. 19. 39 - - - - Other 2710. 91. 00 - - Containing polychlorinated biphenyls (PCBs),

polychlorinated terphenyls (PCTs) orpolybrominated biphenyls (PBBs)

2710. 99. 00 - - Other3. 4902 Newspapers, journals & periodicals... Cultural products

affecting to society morals

4902. 10. 00 - Appearing at least four times a week 4902. 90. 11 - - - Scientific, technical or economic 4902. 90. 19 - - - Other 4902. 90. 21 - - - Scientific, technical or economic4902. 90. 29 - - - Other 4902. 90. 91 - - - Scientific, technical or economic4902. 90. 99 - - - Other

4. 8524 Records, tapes and other recorded media for sound or ... excluding 852410, 852431, 852432, 85243910, 85244000, 852491, 85249920

Cultural products affecting to society morals

8524. 39. 20 - - - For cinematographic film 8524. 39. 90 - - - Other 8524. 51. 10 - - - Videotape 8524. 51. 20 - - - Computer tape 8524. 51. 30 - - - For cinematographic film 8524. 51. 90 - - - Other 8524. 52. 10 - - - Videotape 8524. 52. 20 - - - Computer tape8524. 52. 30 - - - For cinematographic film 8524. 52. 90 - - - Other 8524. 53. 10 - - - Videotape 8524. 53. 20 - - - Computer tape 8524. 53. 30 - - - For cinematographic film 8524. 53. 90 - - - Other 8524. 60. 00 - Cards incorporating a magnetic stripe 8524. 99. 10 - - - For video 8524. 99. 30 - - - For cinematographic film 8524. 99. 90 - - - Other

5. 8802 Other aircraft (for example, helicopters, aeroplanes); spacecraft (including satellites)and suborbital and spacecraft launch vehicles.

Natural monopoly

8802. 11. 00 - - Of an unladen weight not exceeding 2,000 kg 8802. 12. 00 - - Of an unladen weight exceeding 2,000 kg

No HS Description Rationale8802. 20. 10 - - Aeroplanes 8802. 20. 90 - - Other 8802. 30. 10 - - Aeroplanes 8802. 30. 90 - - Other 8802. 40. 10 - - Aeroplanes 8802. 40. 90 - - Other 8802. 60. 00 - Spacecraft (including satellites) and suborbital and

spacecraft launch vehicles 8803 Parts of goods of heading 88.01 or 88.028803. 10. 10 - - Of helicopters or aeroplanes 8803. 10. 90 - - Other 8803. 20. 10 - - Of helicopters, aeroplanes, balloons, gliders or kites 8803. 20. 90 - - Other 8803. 30. 00 - Other parts of aeroplanes or helicopters 8803. 90. 10 - - Parts of telecommunication satellites [ITA/2] 8803. 90. 20 - - Of ballons, gliders or kites 8803. 90. 90 - - Other

In addition to commitment in state trading enterprises (STE), Viet Nam has been asked by the WTO members to make commitments in respect of operation of state-owned enterprises (SOE). Like China, Viet Nam has made commitments in both STE and SOE:

The representative of Viet Nam confirmed that Viet Nam would ensure that all enterprises that were State-owned or State-controlled, including equitized enterprises in which the State had control, and enterprises with special or exclusive privileges, would make purchases, not for governmental use, and sales in international trade, based solely on commercial considerations, e.g., price, quality, marketability, and availability, and that the enterprises of other WTO Members would have an adequate opportunity in accordance with customary business practice to compete for participation in sales to and purchases from these enterprises on non-discriminatory terms and conditions. In addition, the Government of Viet Nam would not influence, directly or indirectly, commercial decisions on the part of enterprises that are State-owned, State-controlled, or that have special and exclusive privileges, including decisions on the quantity, value or country of origin of any goods purchased or sold, except in a manner consistent with the WTO Agreement and the rights accorded to non-governmental enterprise owners or shareholders. The Working Party took note of these commitments.

The representative of Viet Nam confirmed that, without prejudice to Viet Nam's rights with respect to government procurement, all laws, regulations and other measures relating to the purchase or sale of goods and services, by enterprises that are State-owned, State-controlled, or that have special or exclusive privileges, that are for commercial sale, production of goods or supply of services for commercial sale, or for non-governmental purposes, would not be considered to be laws, regulations and measures relating to government procurement. Thus, such purchases and sales would be subject to the provisions of Articles II, XVI, and XVII of the GATS and Article III of the GATT 1994. The Working Party took note of these commitments.

- Comparison with commitments under BTA: Viet Nam’s commitments in state trading enterprises under the BTA is only the obligation to comply with Article XVII of GATT 1994. In addition to the goods subject to import state trading under Viet Nam's commitment with WTO members, those subject to import state trading under BTA includes: mineral or chemical fertilizers, propellant powders, safety fuses, books, children's pictures, industrial printers, postage or revenue stamps etc (detailed list can be provided if necessary).

- Affected enterprises and the extent to which these enterprises are affected: all state trading enterprises, state-onwed enterprises and equitized enterprises where the state holds not less than 51% of shares. However, the above commitment will not make any change in the operation of these enterprises because they all operate on market economy basis.

4. Subsidy

Viet Nam has been applying local content program in mechanical - electric - electronic industries, i.e. imported materials enjoy preferential import duty rates according to the localization rate of the final products. This program is considered by WTO members as prohibited subsidy under Article 3.1 of the WTO Agreement on Subsidy and Countervailing Measures (SCM Agreement) and therefore has been asked to be removed upon accession. Viet Nam also provides another subsidies in forms of credit incentives contingent upon export performance and the use of domestic materials.

Example: complete products of two-wheel motorbike

Achieved localization ratio (%) MFN import tariff ratescontingent upon localization

ratios (%)

MFN committed rate (%)

1- Above 0 and up to 202- Above 20 and up to 30 3- Above 30 and up to 404- Above 40 and up to 505- Above 50 and up to 606- Above 60 and up to 707- Above 70 and up to 808- Above 80

60504030201053

45 - 50

In addition, Viet Nam maintains several types of subsidies in the form of investment incentives e.g. exemption and reduction of corporate income tax, land rental for domestic and foreign invested enterprises.

- Commitment: All prohibited subsidies will be eliminated upon accession except those in form of investment incentives to current beneficiaries, which will be eliminated within 5 years from the date of accession. During this period, no new prohibited subsidy will be

granted to any investor. All prohibited subsidies applied in textile and garment sector in any form will be eliminated upon accession.

In the bilateral negotiation with the US, Viet Nam has commited to remove all prohibited subsidies in textile and garment industry from the date of its accession to the WTO.

- Policies that have been and to be adjusted: the Law on Investment had been revised to eliminate the practice of granting prohibited export subsidies.

- Affected industries and the extent to which these industries are affected: Obviously, with a preliminary look at Viet Nam's current commitments, mechanical - electrical - electronical industries will be affected by the commitment of eliminating prohibited subsidies in form of preferential import duty rates contingent on local content of the finished products and on the use of domestic over imported materials. Textile and garment industry would also be affected. A more detailed evaluation on which industries are affected and the level of impacts by Viet Nam's commitment in WTO accession on these industries should be based on a more specific research.

Comparison with commitments under BTA: none

5. Agricultural subsidy

- Commitments on elimination of export subsidies according to the WTO Agreement on Agriculture: Viet Nam has commited to bind its agricultural export subsidies at 0% upon accession.

- Policies that have been and to be adjusted, possibility of a reduction of flexibilities led by such adjustments:

- Affected sectors and the extent to which these sectors are affected: pork, processed vegetable and fruits, rice and coffee beans are the products beneficial from export subsidy program, however, the impact of export subsidy removal in these sectors would be negligible as the amount of subsidy in all these sectors is very low.

- Comparison with commitments under BTA: none

6. Trade related investment measures

- Commitment on elimination of trade-related investment measures that violate the WTO’s TRIMs Agreement: Viet Nam has commited to eliminate, upon its accession to the WTO, the localization requirements and import duty preferences contingent upon localization ratios for enterprises producing engines of two-wheel motorcycles, automobile parts, electronic and mechanical products. Furthermore, Viet Nam will comply fully with the TRIMs Agreement upon its accession to the WTO.

- Policies that have been and to be adjusted: the requirement on localization ratios and the use of domestic over imported goods had been abolished by the new Investment Law, which came into effect since 1 July 2006.

- Affected industries and the extent to which these industries are affected: As stated above, automobile, two-wheel motorcycles, electronics and mechanical products are the industries mostly affected by Viet Nam’s commitment in compliance with the TRIMs Agreement.

- Comparison with commitments under BTA: similar to the commitments with WTO members.

7. Non-market economy

- Commitment of Viet Nam and the implications on exports in the future: Like China, Viet Nam has accepted, under the bilateral negotiation with the US, the non-market economy (NME) procedure in anti-dumping investigations until 31 December 2018. This commitment will make importing WTO members very easy to impose anti-dumping duties on imports from Viet Nam at their discretion. It is likely that the industries manufacturing products which account for highest ratios among total export value of Viet Nam such as garment, footware would be at risk of suffering high anti-dumping duty rate in such export markets as the US and the EU.

- Comparison with commitments under BTA: Viet Nam accepted NME procedure in anti-dumping and countervailing duty investigations made by the US relevant authorities for undetermined period. In addition, accoding to the BTA, the US reserves the right to impose quota on textile and garment products imported from Viet Nam for undetermined period.

IV. Conclusion

1. Potential opportunity of enhancing export following WTO accession

The biggest export opportunity that Vietnamese enterprises are expecting from WTO accession would be textile and garment products since producers do not have to depend on quotas from importing countries anymore, the industry's products can be freely exported. As one of the industries that for many recent years ranked very high in terms of export value, with low labour cost, it is possible that Viet Nam would become a large producer and exporter of textile and garment in the world if it could take advantage of quota removal by WTO members' markets and develop domestic potential.

2. Evaluation on the implications of the outcomes of Viet Nam’s accession to the WTO

Most of multilateral commitments are consistent with the government's policy, hence would not affect strongly the national economy. The elimination of export subsidies and

local content subsidies would probably affect certain sectors, especially automobile and motorcycles manufacturing, electronics. However, the level of impact would not be too high as the state budget spent fot subsidies are limited so far. Furthermore, the effectiveness of export subsidies and local content subsidies is still a debate now.

Tariff reduction will put some production sectors in higher competitive pressure. However, it should be noted that the level and scope of tariff reduction under WTO commitments are not as high and wide as what has been committed under ASEAN - China Free Trade Area (FTA), ASEAN - Korea FTA. Furthermore, the tariff reduction under ASEAN's FTA (CEPT - Common Effective Preferential Tariff) framework actually did not seem to cause important change in domestic production. As far as agriculture is concerned, competitive pressure would be high as the agricultural production of Viet Nam is still of small and dispersed scale with low productivity and quality, average agricultural land size per capita is too small, the average agricultural production value per 1 hectare of cultivated land is only 30 million VND.

Commitments in services market access would put such sectors as distribution, banking, telecommunication and securities services under high pressure. In the other hand, however, competitiveness in services sectors will also reduce production costs and transaction costs in general, therefore can help another sectors increase competitiveness. The opening of services markets and increasing of the maximum shares that foreign organizations and individuals are allowed to buy in Vietnamese equitized enterprises above 30% would likely make Viet Nam's stock exchange more active. Finally, together with a WTO-consistent economic policy reform, Viet Nam's services commitments will definitely create a more attractive environment for foreign investment.

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