Prime Minister’s Dialogue with Entrepreneurs – AmCham Statement, Oct 13-14, 2004

Herb Cochran, Executive Director, AmCham Vietnam

AmCham feels obliged to raise a delicate but critical issue, the issue of corruption, which is a widespread phenomenon that undermines good governance, erodes the rule of law, hampers economic growth and efforts for poverty reduction and distorts competitive conditions in business transactions. We will not remind participants here about the many recent cases, across many industry sectors, including agriculture, telecommunications, road construction, oil and gas, and most recently textiles and apparel.”

AmCham Statement at the Prime Minister’s Dialogue with Entrepreneurs, 13-14 Oct 2004

Mr. Prime Minister, Distinguished Guests, Ladies and Gentlemen,

Representing the American Chamber of Commerce in Vietnam, I deeply appreciate this opportunity to address the Prime Minister’s Dialogue with Entrepreneurs, and to discuss how to improve the efficiency and competitiveness of Vietnam-based enterprises so Vietnam can integrate into the regional and global economy.

We have heard many good recommendations, and I am sure there will be many more, so I would like to limit my remarks to three important issues.

First, I would like to ask that the Prime Minister and the Government take immediate action to improve the efficiency and the competitiveness of the textile and apparel industry. It is a critical industry for Vietnam at this stage of economic and social development. The industry employs about two million direct workers, representing almost 25 percent of the industrial labor force in Vietnam. It accounts for $4.5 billion a year in exports, of which $2.5 billion go to the United States market.

AmCham and other International Business Associations with FDI in the textile/apparel sector have put forth proposals on a quota allocation system for the export of apparel to the United States that is “transparent, efficient, and fair.” However, we have not yet achieved that objective.

And, as of the end of September, there were many quota categories where only fifty or sixty percent of the quota had been used, although nine of twelve months, seventy-five percent of the year, has passed.

It is now urgent that the Government co-operate with industry to establish a credible system that will work in 2005, and for the Government to reinforce its determination to do what is necessary to get into the WTO as soon as possible.

AmCham has submitted detailed recommendations to the Ministry of Trade, the Ministry of Industry, the Ministry of Planning and Investment, and to the Vietnam Textile & Apparel Association on September 29, 2004. To summarize, we have recommended:

1. Allocate immediately the unallocated and unutilized quota for 2004.

2. Allocate the 2005 quota as soon as possible, based on performance. Allocating quota based on arbitrary, non-market factors only results in inefficiencies, brokers’ involvement, and temptations leading to corruption

3. Appoint representatives of the Vietnam Textile & Apparel Association and representatives of U.S. buyers to meet with the Quota Allocation Board regularly to advise on implementation of regulations that affect the conduct of their business activities related to exporting apparel to the USA.

We respectfully request that the recommendations be favorably considered and implemented as quickly as possible.

Second, AmCham requests the Prime Minister and the Government to do what is necessary to get into the WTO as soon as possible, both on the bilateral negotiations track and on the multilateral WTO compliance track.

AmCham supports and encourages Vietnam’s accession to the World Trade Organization (“WTO”) at the earliest possible date. At the same time, we recognize that Vietnam will have to make a number of signification renovations in its trade and investment regime, for products and services, in order to meet the WTO standards.

With respect to the “Bilateral Negotiations Track,” we welcome the news reports that Vietnam and the EU have reached agreement on the bilateral aspects of WTO negotiations. Under the Most Favored Nation principle, AmCham member firms will also benefit from this agreement. American and Vietnamese negotiators are meeting in Geneva this month for bilateral negotiations.

With respect to the “WTO Compliance Track,” AmCham hopes that Vietnam will quickly take the necessary steps to bring its trade and investment regime into compliance with the WTO global standards. In particular, we believe that the following areas need to be brought into compliance:

• Market access

• Distribution and trading

• Financial services (banking, insurance, etc.)

• Telecommunications

• Audiovisual

• Intellectual Property Rights

• Transparency and Rule-making

In the very near future, AmCham will submit specific recommendations to the Vietnamese Government on how best to prepare for WTO accession.

Third and finally, AmCham feels obliged to raise a delicate but critical issue, the issue of corruption, which is a widespread phenomenon that undermines good governance, erodes the rule of law, hampers economic growth and efforts for poverty reduction and distorts competitive conditions in business transactions.

Under the authorization of the Prime Minister of Vietnam, on June 16, 2004, the State Inspector General of Vietnam signed an Official Letter announcing that Vietnam endorses the Anti-Corruption Action Plan for Asia and the Pacific. AmCham welcomes this initiative. We look forward to Vietnam’s implementation of the three pillars of action:

• Developing effective and transparent systems for public service

• Strengthening Anti-bribery Actions and Promoting Integrity in Business Operations

• Supporting Active Public Involvement

We will not remind participants here about the many recent cases, across many industry sectors, including agriculture, telecommunications, construction, oil and gas, and most recently textiles and apparel.

We sincerely appreciate that bribery and corruption offenses are investigated and prosecuted by competent authorities. At the same time, we hope that the Government will work with industry associations to develop appropriate transparent, efficient, and fair systems for regulating business, including the issuance of licenses, quotas, customs procedures, tax payments, etc., so as to prevent in advance bribery and corruption.

Once again, on behalf of AmCham, allow me to express my appreciation for this opportunity to address the Prime Minister’s Dialogue with Entrepreneurs, and make recommendations that will contribute to the economic and social development of Vietnam.

I wish good health to the Prime Minister, leaders of the Ministries, and all of the Entrepreneurs.

Thank you.

Comment by Prime Minister Phan Van Khai (Tiếng Việt – Vietnamese) (English translation)

About the author  ⁄ AmCham Vietnam

AmCham is an independent association of companies with the objective of promoting trade and investment between Vietnam and the U.S. With two chapters, one in Ho Chi Minh City and one in Hanoi, our membership of 700 companies and 1,500 representatives is unified by a commitment to promote trade and investment between Vietnam and the United States.

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