[Vnbiz] EuroCham urges Vietnam to follow WTO commitments

[Tai Phan]

  EuroCham urges Vietnam to follow WTO commitments 17:25' 10/04/2008 (GMT+7)


*VietNamNet Bridge – The European Chamber of Commerce in Vietnam (EuroCham)
has insisted on Vietnam keeping pace with its commitments to the World Trade
Organization [WTO) to maintain the country's attractiveness and gain
confidence among foreign investors.*

Speaking at a news briefing in HCMC on Tuesday, EuroCham executives said
Vietnam's fulfillment of WTO commitments had been slowed in banking and
distribution among others.

Alain Cany, who has been re-elected EuroCham chairman, demonstrated that the
State Bank of Vietnam (SBV) had not taken any action in allowing Standard
Chartered Bank and HSBC to open their own subsidiaries, though 'in
principle' approval was announced for them during Prime Minister Nguyen Tan
Dung's visit to London one month ago.

EuroCham vice chairman Jean-Pierre Achouche said the two large European
banks applied to set up 100% foreign-owned subsidiaries in compliance with
Vietnam's WTO commitments effective on April 1 last year.

"We would like now to urge the SBV to fulfill the commitment soon by
licensing both banks as it would be a very important milestone for Vietnam
to attract further foreign direct investment," Achouche told the briefing
held to introduce new EuroCham executive committee for 2008.

Cany said EuroCham had paid much attention to Vietnam's implementation of
WTO commitments regarding distribution. It has pledged to allow foreign
firms to join this sector through joint ventures from January 2008 and
directly from January 2009.

"It looks to me that there has been a delay," Cany said. Firms still face
barriers and find it difficult to get a license for their joint ventures.

"It is important that Vietnam fulfills its commitments within a reasonable
period of time," Cany said. He stressed if the delay was long, the world's
current economy was not good, Vietnam would likely not be a destination of
choice any more for foreign investors.

Cany said EuroCham did not blame the Government on some delays because it
understood that it was difficult to fulfill a lot of commitments, but it
would be a big concern if things did not change at the end of 2008.

"Any delays or impediment in the implementation of WTO commitments will be
detrimental to Vietnam's economy and sustainable development," Cany said.

EuroCham executives hailed an initiative by the Ministry of Industry and
Trade to abolish the single-distributor requirement set forth in a circular
issued last year, but called on Vietnam to act fast on that initiative so
that European trading companies will be able to resell their imported goods
to multiple distributors.

Other concerns voiced by EuroCham cover the restriction on deductibility of
advertising and promotional expenditure, performance related to
remuneration, personal income tax, illegal strikes at a number of
foreign-owned manufacturing plants and factories.

"Most of the recent strikes are organized by workers demanding higher pay to
cope with rising inflation. EuroCham shares their concerns regarding
inflation but we request the central and provincial authorities to take
prompt action so that the procedures set forth by the Labor Code are
understood and respected," Cany said.

Cany said inflation was big concern in Vietnam when it was higher than the
economic growth, but it is also a global problem at the moment so it did not
affect foreign investment flow.

"I do not think inflation will affect FDI flow into Vietnam as foreign
investors are excited about this country," Cany said. He hoped that the
Government's measures to solve the problem would take effect in the next few
months.

However, Cany said inflation had placed impact on the companies operating in
Vietnam and exporters as their products had become less competitive due to
increasing input costs.

*(Source: SGT)*
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