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Vietnam will use every allowable means to shrink trade deficit
Intent on curbing a trade deficit that has reached $6.7 billion in the first half of the year, the Ministry of Finance has instructed customs and other officials to tighten controls over consumer goods imports. With surprising candor, Deputy Minister of Finance Do Hoang Anh Tuan discussed these steps with Tuoi Tre newspaper.
Deputy Finance Minister Tuan: The trade deficit in 2009 was $13 billion. Consumer goods accounted for a big proportion. Mobile phone imports alone totalled one billion dollars. Vietnamese companies also imported many kinds of food which can be produced domestically: maize, potatoes, carrots and even bamboo toothpicks. The Ministry of Finance (MOF) therefore must take technical actions to restrict imports
Specifically, the ministry has reviewed our WTO commitments and raised import tariffs where that’s permitted. For example, the tariff on pork and beef has been raised to the 20-30 percent level. The tariff on phones that Vietnam is able to produce domestically may also increase. Regarding products already assessed at ceiling levels under the WTO commitments, such as air conditioners, Vietnam will rely on technical barriers allowed by WTO to restrict imports.
The Ministry of Industry and Trade will apply an automatic import licensing scheme. The Ministry of Health will strictly examine import quality and require certificates on food hygiene. MOF will not allow enterprises to keep goods in a bonded warehouse, untaxed and unexamined. All these technical barriers will push up the cost of imports, helping to restrain demand for them.
These are temporary measures only. In long term, Vietnamese enterprises must improve the competitiveness of their products.
Tuoi Tre: Imports of farm produce from China have been increasing rapidly in recent days. How will Vietnam apply technical barriers to such imports?
Tuan: The Finance Ministry will only allow farm products imported through normal channels through our seaports to clear customs when they are fully documented, including vegetation examination and food hygiene certificates. Farm produce imported across our land border will be examined right at the border gate. Only products that meet our quality standards can enter Vietnam’s market. We intend to keep out low-quality Chinese produce.
We have a problem with cross-border trade. Many people abuse the regulations to bring in Chinese goods informally. [Under current regulations, every person who lives in a border area can cross the border to buy goods worth up to two million dong without being subjected to tax – VNNB.] In the near term, local level officials will seek to educate the people who collect goods to bring to Vietnam. In the longer term, Vietnam needs to ensure that the people in our border provinces have stable jobs, so that they do not work for the people who organize informal imports.
Tuoi Tre: MOF has organized a dialogue with enterprises to help resolve policy problems, enabling them to step up production and business. However, companies say that not many problems have been settled and that MOF concentrates on the problems of big firms . . .
Tuan: We organize such dialogues every year to address problems relating to customs and tax policies. Of course, we cannot satisfy all enterprises during the dialogue sessions, so we note down the inquiries give answers later.
I think that there are many reasons for small enterprises to complain, but, I must say, it is MOF policy not to discriminate in our treatment of big and small enterprises.
Companies complain that a lot of problems arise during the implementation of the policies, and that directives are unrealistic. It’s true that many directives fail to address all aspects in the life of enterprises, so the ministry must give more guidance. Enterprises also complain that the same document is interpreted in different ways by local tax offices. In some cases, we’ve found that tax officials have deliberately ‘misunderstood’ the documents and in other cases, they simply didn’t understand them.
vietnamnet, TuoiTre
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