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Protectionism for paper producers decried
Protectionist policies for domestic paper industry will run counter to the trend of global integration, senior economists say.
Domestic paper makers are struggling to compete with foreign competitors who have cut their prices in the wake of the global financial recession, and the Vietnam Paper and Pulp Association has appealed to the government for help.
The association has asked the government to protect domestic paper producers by raising the Common Effective Preferential Tariff (CEPT) on paper products from the Association of Southeast Asian Nations, or ASEAN, from 3 to 5 percent.
Eighty percent of the imported paper products are from ASEAN members, 40 percent of which are at present subject to the CEPT, according to the Vietnam Chamber of Commerce and Industry.
Economist Pham Tat Thang, former official of the Ministry of Industry and Trade, said raising taxes was not the right solution. He said outdated technology was the main problem behind the lack of competitiveness of domestic paper makers.
Economist Pham Chi Lan said the paper industry needs protection only if companies can prove that they are hit hard by foreign competitors and that too only in an emergency situation.
Other analysts opposing a protectionist policy point to the auto industry as an example. With the protection afforded it for the last ten years, the Vietnamese auto industry is still in the doldrums. Among ASEAN members, only Laos, Cambodia and Myanmar are ranked below Vietnam.
Lan said the government should protect industries that serve many consumers and have a strong bearing on the economy during the global financial crisis.
“But the government should also say no to industries that remain stagnant in spite of being protected for a long time,” she added.
VietNamNet, DTCK, TN
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