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Vietnam eliminating export incentives in line with WTO (28/07)
06/08/2010 - 288 Lượt xem
For the past eight years, enterprises scoring high export turnover have been eligible to receive cash bonuses from the government. However, these incentives will have to be revoked once Vietnam joins WTO as the body views them as subsidies that twist free trade.
The incentive program took effect in 1998 and rewarded 66 enterprises cash bonuses totaling VND4.6 billion (US$290,000) in the first year, the trade ministry reported.
The figures jumped to 106 businesses and VND6.2 billion ($390,000), respectively one year later and have increased steadily every year. In 2004, the figures were 349 enterprises and VND29.4 billion ($1.84 million).
Subsidization in different forms, including the subsidization of exports, was a hot topic in bilateral negotiations for Vietnam’s WTO entry.
Vietnam is seen as export-oriented economy internationally with a high export growth rate, and trade counterparts often feared that subsidies in the form of incentive payments would give the local exporters an unfair advantage over domestic enterprises in trading partners’ home economies.
Under WTO rules, members are permitted to support research and development, disadvantaged zone and environment protection measures where other forms of subsidy or governmental support, including export subsidies and incentives, are banned.
Vietnam will also have to phase out export subsidies on agricultural products, textiles and garments immediately upon joining WTO.
Subsidies for domestic production permitted by WTO are to be kept at less than 10 percent of total production value, according to the finance ministry.
Source: VietnamNet
