Domestic and Foreign Market Access

Overview: Trade Policy and Business Environment

The Socialist Republic of Viet Nam is classified a lower middle income country. The country was ranked 68th out of 132 countries in the World Economic Forum (WEF) Global Enabling Trade Index (2012), which measures institutions, policies and services to facilitate trade in countries. Viet Nam has become more competitive due to a better macroeconomic environment. Political and economic reforms have transformed Viet Nam from one of the poorest countries in the world to a lower middle-income country, and from a centrally planned economy into a more market-oriented economy through gradual integration into the global trading system. Nevertheless, there are significant transport infrastructure deficiencies and higher fees and surcharges on foreign firms that have affected export competitiveness.

WEF, 2012, Global Enabling Trade Report

INDICATOR, UNITS RANK/132 SCORE
Domestic Market Access The pillar assesses the level and complexity of a country’s tariff protection as a result of its trade policy. This component includes the effective trade-weighted average tariff applied by a country, the share of goods imported duty free and the complexity of the tariff regime, measured through tariff variance, the prevalence of tariff peaks and specific tariffs, and the number of distinct tariffs. 41 4.37
Foreign Market Access The pillar assesses tariff barriers faced by a country’s exporters in destination markets. It includes the average tariffs faced by the country as well as the margin of preference in destination markets negotiated through bilateral or regional trade agreements or granted in the form of trade preferences. 83 7.75
Tariff rate (%) This indicator is calculated as a trade-weighted average of all the applied tariff rates, including preferential rates that a country applies to the rest of the world. The weights are the trade patterns of the importing country’s reference group (2012 data). An applied tariff is a customs duty that is levied on imports of merchandise goods. 5 22.36
Complexity of tariffs , index 1-7 (best) This indicator is calculated as the average of the following indicators: Tariff dispersion, Specific tariffs and Number of distinct tariffs. See description of each individual indicator for more details. Prior to averaging, values for each indicator were transformed to a 1–7 score, using the min-max method. 68 5.72
Tariffs dispersion (standard deviation) This indicator reflects differences in tariffs across product categories in a country’s tariff structure. The variance is calculated across all the tariffs on imported merchandise goods, at the 6-digit level of the Harmonized Schedule. 103 11.62
Tariffs peaks (%) This indicator is the ratio of the number of tariff lines exceeding three times the average domestic tariff (across all products) to the MFN (most-favoured nation) tariff schedule. The tariff schedule is equal to the total number of tariff lines for each country. These tariffs are revised on a yearly basis. 84 8.38
Specific tariffs (%) This indicator is the ratio of the number of Harmonized System (HS) tariff lines, with at least one specific tariff, to the total number of HS tariff lines. A specific tariff is a tariff rate charged on fixed amount per quantity (as opposed to ad valorem) 1 0
Number of distinct tariffs This indicator reflects the number of distinct tariff rates applied by a country to its imports across all sectors. 68 49
Share of duty-free imports (%) Share of trade, excluding petroleum, that is imported free of tariff duties, taking into account MFN tariffs and preferential agreements. Tariff data is from 2013 or most recent year available and imports data is from 2012 83 48.4
Tariffs faced (%) This indicator is calculated as the trade-weighted average of the applied tariff rates, including preferential rates that the rest of the world applies to each country. The weights are the trade patterns of the importing country’s reference group (2012 data). A tariff is a customs duty that is levied by the destination country on imports of merchandise goods 7 4.67
Index of margin of preference in destination markets, 0-100 (best) This indicator measures the percentage by which particular imports from one country are subject to lower tariffs than the MFN rate. It is calculated as the average of two components: 1) the trade-weighted average difference between the MFN tariff and the most advantageous preferential duty (advantage score), and 2) the ratio of the advantage score to the trade-weighted average MFN tariff level. This allows capturing both the absolute and the relative margin of preference. 87 13.2
Source : World Economic Forum, Global Enabling Trade Report 2014

Trade Policy and Market Access

Viet Nam has been a member of the WTO since 2007. In the process of economic restructuring and comprehensive international integration, the Vietnamese Government is strongly committed to the multilateral trading system and considers it the main focus of Viet Nam’s economic integration policies. Viet Nam’s average MFN applied tariff in 2012 was 9.5 per cent. Agricultural exports into the country face higher barriers (18.5 per cent) compared to non-agricultural exports (10.4 per cent). Viet Nam became a member of the Association of Southeast Asian Nations (ASEAN) in 1995, and granted preferential treatment for goods to its ASEAN partners under the Common Effective Preferential Tariffs in 1996. As a member of ASEAN Viet Nam signed the ASEAN Trade in Goods Agreement that included provisions on the elimination of non-tariff barriers (NTB) further to WTO requirements and the 2006 ASEAN Work Programme on the Elimination of NTBs (WTO 2013a).

WTO, 2013, Trade Policy Review (Viet Nam)

Standard Compliance and Other Relevant Import/Export Restrictions

Upon its accession to the WTO Viet Nam undertook to comply with the obligations of the Agreement on Technical Barriers to Trade (TBT). Viet Nam notified a number of measures to the TBT Committee including a notification to accept the Code of Good Practice. The Ministry of Science and Technology is responsible for developing standards and technical regulations for products and services and its affiliated organization, the Directorate for Standards, Metrology and Quality, under this Ministry, represents Viet Nam in international and regional standard organizations. Moreover, Viet Nam undertook to comply with the requirements of the Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures. Viet Nam has put in place a legislative framework for SPS measures as set out in the ordinances for plant protection and quarantine, animal health, and laws on food safety and environmental protection. The measures generally correspond to standards established by the World Organization for Animal Health, Codex Alimentarius, and the International Plant Protection Convention.

WTO, 2013, Trade Policy Review (Viet Nam)