VN to further open market

CA - Vietnam will further open its domestic services market to ASEAN companies under its commitments to the ASEAN Framework Agreement on Services (AFAS), an official said.

According to Le Trieu Dung, head of the ASEAN Office of the Multilateral Trade Policy Department under the Ministry of Industry and Trade, so far, the commitments to AFAS on services market openness are similar to those made to the World Trade Organization (WTO).

However, Vietnam will let more ASEAN firms join the services market, and by 2015, the commitments on service liberalization under AFAS will be greater than those to the WTO.

Vietnam has participated in 5 rounds of negotiations and offered 7 commitment packages on market liberalization to AFAS.

The 8th package is expected to be completed in February 2012, with commitments on par with those to the WTO.

Thailand, Malaysia and Singapore have completed this package, while the remaining ASEAN countries including Vietnam are still in progress.

By 2015, the services prioritized for liberalization will be healthcare, tourism, air transport and e-commerce in ASEAN or e-ASEAN, with foreign ownership in local businesses in these sectors rising from 51 percent in 2008 to 70 percent last year.
For the logistics sector, the foreign ownership ratio in Vietnamese firms will rise to 70 percent by 2013 from 49 percent in 2008, and for non-priority services areas, foreign holdings in local companies will rise to 70 percent by 2015 from 51 percent in 2010.
Dung said local enterprises showed little care about the commitments on services and investment in Vietnam under the bilateral and multilateral agreements. Therefore, he advised local firms to pay attention to such commitments when doing business with ASEAN partners.

Moreover, in the coming time when Vietnam signs a free trade agreement with the European Union and a Trans-Pacific Partnership (TPP) agreement, the services market will be further opened up.

According to figures provided by the Multilateral Trade Policy Department at a seminar in HCMC, the deficit in Vietnam’s services trade surged in 2000-2008. In 2009 alone, Vietnam’s services export and import dipped due to the global economic recession.

According to the General Statistics Office, Vietnam’s services export amounted to US$7.4 billion last year, with tourism services accounting for a hefty 60 and transport services for 30 percent.

In the meantime, the services import turnover reached over $8.3 billion, some 60 percent of it coming from transport services and 17 percent from tourism.