Decision No. 160/2008/QĐ-TTg Approving the Overall Strategy and Domestic Industrial Production Protection Policy in Line with International Commitments and WTO Regulations for the Period up to 2020

Pursuant to …;

APPROVE THE OVERALL STRATEGY AND POLICY FOR PROTECTING DOMESTIC INDUSTRIAL PRODUCTION IN LINE WITH INTERNATIONAL COMMITMENTS AND WTO REGULATIONS UNTIL 2020

PRIME MINISTER

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Considering the proposal of the Minister of Industry and Trade,

DECISION:

Article 1. Approve the overall strategy and policy for protecting domestic industrial production in line with international commitments and WTO regulations until 2020, with the main contents as follows:

I. GUIDING PRINCIPLES

1. Protective measures must be reasonable, conditional, and have a phased reduction plan consistent with Vietnam's commitments when joining the World Trade Organization (WTO) and other commitments of Vietnam.

2. State protective measures must aim to promote and establish competitive advantages for priority industries and key industries, and for the Vietnamese industry in general on both domestic and international markets.

3. Protective measures must be implemented uniformly and equally for all enterprises under various economic sectors.

4. Link protection of domestic production with the continued adjustment of state management functions in a socialist-oriented market economy.

II. OBJECTIVES

1. Create conditions to assist domestic producers in gradually improving their competitiveness on the domestic market and gradually expanding into foreign markets.

2. Create conditions to mobilize domestic and foreign resources into exploiting potential and advantages to accelerate the process of industrialization and modernization of the country.

3. Contribute to stabilizing the national economy and society during the process of international economic integration based on creating more jobs, improving the living standards of workers, and meeting the needs of goods in the economy.

4. Protection of domestic production not only aims at economic goals and protecting the interests of domestic producers but also at social goals and protecting the interests of consumers in the domestic market.

III. STRATEGY FOR PROTECTING DOMESTIC INDUSTRIAL PRODUCTION IN LINE WITH INTERNATIONAL COMMITMENTS AND WTO REGULATIONS

Based on international commitments and WTO regulations, utilize tax and non-tax measures to assist domestic industrial enterprises under all economic sectors, primarily focusing on priority industries and key industries, to create and enhance competitiveness on the domestic market and gradually expand into foreign markets. Protection must aim to gradually improve national competitiveness as well as the competitiveness of industries and industrial products. Conversely, enhancing competitiveness will contribute to protecting domestic industrial production.

IV. POLICIES FOR PROTECTING DOMESTIC INDUSTRIAL PRODUCTION IN LINE WITH INTERNATIONAL COMMITMENTS AND WTO REGULATIONS

1. Group of policies related to tax and non-tax measures

a) Policies related to taxes

Continue to protect through tax policies consistent with WTO regulations and Vietnam's international commitments. Apply flexible tax calculation methods, effectively use anti-dumping duties and countervailing duties to protect domestic production.

b) Policies related to non-tax measures

- Implement current investment policies, temporary trade protection policies; organize competition management, anti-dumping, anti-subsidy; technical barriers, quarantine safety ...;

- Reform policies and regulations related to customs procedures. Continue to strictly manage distribution services of goods that significantly impact the economy and society (such as oil, pharmaceuticals, books, newspapers, magazines, video tapes, tobacco, rice, sugar, precious metals, fertilizers, cement ...);

- Apply intellectual property protection policies to prevent fraudulent trade activities and copyright violations based on WTO regulations and Vietnam's international commitments.

2. Group of policies related to enhancing competitiveness

a) Investment policies

- Prioritize investment in infrastructure, especially in economically disadvantaged areas, rural and mountainous regions, to facilitate domestic and foreign investors in building production and business facilities to narrow the gap between regions.

- Combine new investments with expanded production and business operations. Prioritize investment in high-tech industries, environmentally friendly technologies, resource-efficient technologies, producing quality and competitively priced products.

- Enhance investment efficiency. Continue to fully leverage domestic resources, attract external resources, and effectively combine internal and external resources for investment implementation.

b) Policies on production, business, and industrial services

- Vigorously develop industries and products based on dynamic competitive advantages of the economy; while ensuring production to meet essential product demands to contribute to economic and social stability and export growth.

- Implement protective policies based on classifying industrial goods into groups according to certain criteria and clearly identifying protected goods for selection.

- Develop production and business of advantageous products, improve industrial services, implementing the goal of enhancing competitiveness as the most effective measure for protecting domestic production.

c) Market policies

- Gradually reduce and eventually eliminate state intervention in commodity prices (except for strategic and essential goods) based on respecting market laws in a socialist-oriented market economy.

- The state supports enterprises in enhancing competitiveness in line with international commitments and WTO regulations.

- Develop a synchronized market system (such as commodity and service markets, financial markets, real estate markets, labor markets, and science and technology markets) and efficiently manage the operation of these markets.

d) Policies on capital mobilization

- Consistently implement the policy of developing a multi-sector commodity economy and diversifying business organizations to effectively mobilize domestic and foreign resources for general economic development and industrial development.

- Develop a stable financial market including capital and money markets in a synchronized and structurally complete manner. Expand and improve the quality of activities in the capital market and stock market. Mobilize all sources of capital for investment and development. Modernize and diversify activities in the money market. Open up the banking service market according to the integration roadmap of the international economy.

d) Science and technology policy

- Enhance the capabilities of science and technology agencies in all aspects to gradually increase the scientific and technological content in key industrial products and services; at the same time create organic links between research institutions and enterprises to transfer research results into production and business.

- Accelerate the formation and development of the science and technology market to create favorable conditions for enterprises to apply scientific and technological achievements in investment and production, business. Promote the application of advanced management technologies in the production and business management of industrial enterprises.

- Prioritize the research and development of endogenous technology; while combining with the priority application of source technologies and advanced technologies in the region and worldwide in the fields of industry. Strengthen the awareness of enterprises and management agencies about the importance of standardization and intellectual property work.

e) Environmental policy

- Prioritize the construction of advanced environmental standards in the production and consumption of industrial products. Complete the industrial environmental standard system harmonized with those of developed countries; at the same time strengthen investment in means and equipment to implement monitoring.

- Establish a roadmap to modernize outdated technologies and apply new advanced technologies to minimize environmental pollution factors in production sectors.

- Promote research and build the environmental industry sector.

g) Human resource policy.

- Continue to reform training objectives, content programs, and methods from vocational training, intermediate specialized education, college to university level, reaching regional and international standards. Focus on training and building a high-quality teaching staff.

- Combine state investment with the socialization of education policies to mobilize economic resources from both domestic and foreign sectors for the development of education and training; pay attention to on-the-job training forms of enterprises, develop overseas training forms to quickly access advanced techniques and technologies.

- Build preferential policies to attract talent in some prioritized industries and fields, apply pilot programs, evaluate comprehensively, and adjust policies appropriately for each area.

V. IMPLEMENTATION MEASURES

1. Group of measures related to tax and non-tax

a) Group of measures related to tax

- Under permissible conditions and consistent with WTO agreements and Vietnam's commitments on the tariff reduction schedule, continue to protect certain goods categories needing support through taxation. Adjustments to tariff rates for specific items must have transition periods and be widely announced before implementation.

- Implement commitments to comply with the WTO agreement on customs valuation. Abolish additional charges on imports.

- Flexibly apply tax calculation methods, mainly using percentage taxes to ensure transparency, and limit the use of absolute taxes. If an import tariff is converted to an absolute or mixed tariff, it must have clear purposes, and the new rate must not exceed Vietnam's commitments.

- Continue to study and effectively apply anti-dumping and countervailing duties to protect domestic production from unfair competition from imports. The application of anti-dumping and countervailing duties is based on WTO regulations and Vietnam's commitments.

b) Group of measures related to non-tax

- Maintain existing investment policies and investment incentives that do not conflict with WTO rules such as indirect incentives, investment projects for developing socio-economic infrastructure, agricultural development, rural areas, investment in economically disadvantaged areas, particularly difficult areas...

- Study and propose investment policies and investment incentives in forms such as supporting research and development, education and training, investment in upgrading existing equipment to meet new environmental regulations...

- Study the use of non-tax measures such as temporary trade protection (such as self-defense, subsidies, countermeasures, anti-dumping measures).

- Improve competition management mechanisms and anti-dumping and anti-subsidy measures to create a healthy competitive environment. Develop technical standards and food safety and hygiene standards in line with the Technical Barriers to Trade Agreement (TBT) and the Sanitary and Phytosanitary Measures Agreement (SPS) to protect the domestic market and consumers.

- Implement sanitary and phytosanitary policies based on international standards, consistent with WTO regulations to protect agricultural economies and consumer health. Harmonize quarantine standards for animals and plants with regional and international standards.

- Maintain quotas and licensing systems for permitted products according to commitments and WTO regulations, for items affecting national security, defense, resource protection, environmental protection, human health, cultural traditions... and ensure the principle of non-discrimination.

- Complete the system of policies on competition and reduce monopolies to enhance openness and create an equal competitive environment for development. Prevent economic activities that may create barriers to market development and competition, reducing investment and business opportunities for enterprises.

- Strictly implement the Law on Customs. Reform customs procedures, ensuring transparency and standardization according to international regulations, creating conditions for smooth trade and investment activities.

- Open up the distribution service market according to the committed roadmap. Continue to strictly manage distribution activities of goods with significant impacts on the economy and society such as oil, pharmaceuticals, books, newspapers, magazines, video tapes, tobacco, rice, sugar, precious metals, fertilizers, cement.

- Study and apply forms of intellectual property protection to prevent fraudulent trade activities and copyright violations based on WTO regulations and Vietnam's commitments. The application of protective measures through the enforcement of intellectual property rights must not become barriers to legitimate trade activities and must be tied to the protection period stipulated by the WTO.

2. Group of solutions related to enhancing competitiveness.

a) Investment solutions

- Focus on developing transportation infrastructure, mainly road systems, seaports, airports, located in regions with large cargo throughput capacity and strong spillover effects on other regions.

Prioritize the development of energy infrastructure, primarily electricity. Accelerate the construction progress of power plants with comprehensive benefits (electricity production, flood control, water supply, tourism); develop thermal power reasonably; strengthen coal-fired thermal power; develop environmentally friendly wind and solar power; prepare thoroughly for the initial nuclear power plant construction in the near future. Apply integrated technical, economic, and organizational measures to use electricity efficiently and save energy, reducing power loss.

- Adjust the strategy and policy for the development of industrial sectors (product groups) based on prioritizing key industries and spearhead industries. Accordingly:

+ Focus on developing domestic products with competitive advantages both in the domestic and international markets by leveraging the comparative advantages of the country and each region regarding human resources, natural resources, and traditional trades.

+ Selectively develop certain products with potential to improve competitive advantages, including high-tech industries, with state assistance within the framework of international commitments and WTO regulations.

+ Concentrate investment in developing certain products (components, product details) to participate in "global value chains" based on establishing relationships with suitable partners, mainly global corporations (TNCs) with global production and distribution networks.

- Overcome the basic situation of scattered investment (especially public investment funds) and situational investments lacking long-term strategies ensuring sustainable development. Promote foreign direct investment in industries and fields requiring substantial capital, advanced technology, environmental friendliness, and low resource consumption.

b) Production, business, and industrial services solutions

- Promptly implement Decision No. 55/2007/QD-TTg dated April 23, 2007 of the Prime Minister approving the list of priority and spearhead industries for the 2007-2010 period with a vision to 2020 and some encouraging policies for development.

- Study and classify industrial goods into groups based on certain criteria, such as: common goods, goods with significant impacts on the economy and society; traditional industry goods, young industries; competitiveness... to have appropriate measures and levels of protection.

- Strengthen the attraction of investment to develop supporting industries and foundation industries for national industrialization and modernization. Ensure production to meet the demand for essential products contributing to maintaining economic and social stability and export growth.

Pay attention to investment in developing industrial service activities and business support services, including logistics services, business consulting and legal services; financial and banking services; insurance services; trade promotion services; training services according to enterprise requirements.

c) Market solutions

- Solutions to eliminate state intervention in prices

+ In the long term, gradually shift to market values for goods currently subject to state pricing mechanisms. Gradually abolish all forms of subsidies, including price subsidies, implementing market prices for all types of goods and services according to the committed roadmap with the WTO.

+ Improve price policies, competition policies, and monopoly control policies consistent with international economic integration commitments and ensuring macroeconomic stability.

+ Support and encourage professional associations and enterprises to build price roadmaps for important products with large volumes to create a competitive pricing environment, ensuring stable, sustainable, and harmonious development.

- Solutions to support enterprises in enhancing competitiveness

+ Support enterprises in implementing investment and trade promotion measures; base market information to formulate appropriate business strategies.

+ Continue to review and improve policies and legal provisions related to contract signing and implementation, market supervision and regulation, trade and investment promotion, and dispute resolution in accordance with international commitments.

+ Encourage and create conditions for enterprises to expand linkages to ensure raw materials, processing, and product distribution in the market.

+ Enhance investment in capital, material infrastructure, and human resources for research and development (R&D) activities; develop scientific and technological enterprises; strengthen collaboration between research institutes, universities, and businesses.

+ Support and encourage businesses to implement applied research activities and improve the training of high-quality human resources (including management personnel).

+ Leverage the role of industry associations in cooperation and unified action among member businesses to enhance competitive capacity.

- Solutions for establishing a synchronized market system

+ Develop a synchronized market system to facilitate quick and convenient access for businesses to various resources: utilize state spending to stimulate production and consumption.

+ Gradually eliminate monopolies, encourage, and protect fair competition among businesses.

+ The State plans reasonable expenditures to stimulate production and consumption.

+ Combine state protection with encouragement and protection of fair competition among businesses to create conditions for improving competitiveness and gradually expanding into foreign markets.

+ Study and promulgate legal regulations on ownership rights of foreign enterprises, organizations, and individuals in Vietnam.

d) Solutions for mobilizing capital

- Solutions for developing a multi-component commodity economy

+ Review, amend, and supplement legal documents, preferential mechanisms, and policies for products and business areas eligible for protection to ensure true equality among businesses from all economic components.

+ The State plays a guiding role, creating a favorable environment for investors to choose appropriate business opportunities and organizational forms based on their conditions.

+ Build a high-quality Vietnamese enterprise system with strong competitiveness and reputable brands, with large economic groups as the main force.

- Solutions for building and developing financial markets

+ Vigorously develop domestic and foreign funding channels; closely integrate monetary policy with fiscal policy; strengthen management, inspection, and supervision of the capital market.

+ Promote reforms in the financial and banking sectors to ensure that commercial banks are truly autonomous economic units without discrimination based on ownership form or economic component. Ensure conditions and environments for commercial banks and stock exchanges to operate according to market principles, self-governance, and financial responsibility.

+ Improve credit operation mechanisms according to market principles: perfect transaction procedures to be as convenient as possible.

+ Continue to accelerate the pace of state-owned enterprise shareholding reform, ensuring effectiveness and compliance with the purpose of shareholding.

+ Encourage, support, and create favorable conditions for entrepreneurs to access all sources of capital. Pay special attention to supporting small and medium-sized industrial enterprises from international governmental and non-governmental organization support funds. Establish mechanisms for initial capital formation for new businesses entering the market.

đ) Solutions for science and technology

- Solutions for enhancing the capacity of science and technology agencies

+ Create conditions for science and technology agencies to increase autonomy, independent accounting, and collaboration with businesses to promote technological innovation.

+ Increase state budget investment in programs and projects positively impacting the exploitation of domestic resources, enhancing production capacity, and competitiveness of goods. Establish accountability mechanisms for organizations and individuals implementing programs and projects to ensure research effectiveness.

+ Establish a National Technology Innovation Fund and a Venture Capital Fund in the field of science and technology.

- Solutions for building and developing the science and technology market

+ Implement initial support policies for applied research institutions participating in the science and technology market; establish a widespread and smooth national technology market.

+ Implement policies to encourage the development of intellectual property and technology transfer services, advisory services, and various types of technology fairs, exhibitions, incubation centers; establish technology trading centers in major economic regions.

- Solutions for research and development of technology and intellectual property

+ Encourage businesses to apply scientific and technological achievements in investment and business while protecting intellectual property rights.

+ Encourage the development of design, measurement, evaluation, appraisal, quality monitoring, information, brokerage, technology transfer, and legal advisory services on intellectual property.

+ Develop and promulgate technical standards for goods originating from consumer interests and aligning with international standards.

+ Increase the scientific and technological content in key industrial products and services; intensify the application of advanced management technologies in business operations.

+ Assist businesses in adopting modern quality management systems; strengthen oversight of compliance with quality standards.

+ Perfect mechanisms for assessing imported technology and equipment to ensure modernity and effectiveness when applied in Vietnam.

+ Perfect legal regulations on copyright and intellectual property protection.

e) Group of solutions for the environment

- Develop and promulgate advanced environmental standards suitable for Vietnam's conditions and gradually align with those of developed countries, strictly handle violations of established standards.

- Establish financial mechanisms to assist businesses in environmental protection activities at production and business sites.

- Gradually build the environmental industry into a strong industry ensuring the supply of technologies and equipment for environmental treatment in industrial production and serving public needs.

g) Human resource solutions

- Gradually implement the national education system reform program according to the requirements of ensuring systematicity and connectivity, meeting regional and international standards; linking training with usage needs, especially vocational training.

- Gradually increase state investment combined with implementing the policy of socializing education to mobilize resources for the development of the education and training cause.

- Strengthen vocational training (including college, specialized secondary, and worker levels) to ensure human resources for new investment projects and expanded investments.

- Establish mechanisms and policies to support training, upgrading, and improving the skills of workers; encourage the private sector and businesses to participate in vocational training.

- Promote international cooperation in the field of education and training; develop forms of training abroad to quickly access advanced technology and techniques.

Article 2. Implementation

1. Responsibilities of Ministries and Sectors:

a) The Ministry of Industry and Trade is responsible for announcing the strategy after it has been approved by the Prime Minister; guiding, urging implementation, and inspecting the execution of this Decision; monitoring; advising the Government and the Prime Minister to adjust mechanisms and policies to suit actual conditions.

b) The Ministry of Industry and Trade coordinates with relevant ministries and sectors to implement specific measures and policies related to production, business, industrial services, trade promotion, market development, and dispute resolution in accordance with international commitments.

c) The Ministry of Planning and Investment takes the lead in implementing specific measures and policies on investment; non-tax measures related to investment and investment incentives.

d) The Ministry of Finance takes the lead in implementing specific measures and policies related to taxation; tax policy reforms and regulations related to customs procedures; capital mobilization and financial market development.

đ) The Ministry of Science and Technology takes the lead in implementing specific measures and policies related to science and technology development; intellectual property protection; technical barriers in trade.

e) The Ministry of Agriculture and Rural Development takes the lead in implementing specific measures and policies related to animal and plant quarantine measures.

g) The Ministry of Health takes the lead in implementing specific measures and policies related to food safety and hygiene measures and pharmaceutical management.

h) The Ministry of Education and Training takes the lead in implementing specific measures and policies related to education and training reform and human resource development.

i) The Ministry of Natural Resources and Environment takes the lead in implementing specific measures and policies related to establishing advanced environmental standards in production and consumption of industrial products; developing the environmental industry.

k) Other ministries and sectors within their assigned responsibilities shall cooperate with leading ministries to implement specific measures and policies to ensure the successful implementation of the strategy.

2. Responsibilities of Provincial People's Committees:

Provincial People's Committees directly under the Central Government need to grasp the spirit of the strategy and disseminate it to units and enterprises; at the same time, they should have plans to implement the construction and execution of the strategy's policies and measures suitable to local conditions.

3. Reporting System:

- Before November 20 each year, ministries, sectors, and localities report to the Ministry of Industry and Trade on the implementation situation and results of the year regarding the strategy's measures and policies for consolidation and reporting to the Prime Minister.

- The Ministry of Industry and Trade leads, coordinating with ministries and sectors to organize mid-term reviews of the strategy's implementation in 2010; mid-term reviews in 2015 and final reviews in 2020.

Article 3. This Decision takes effect fifteen days after its publication in the Official Gazette.

Article 4. THE MINISTERS, HEADS OF GOVERNMENT-LEVEL MINISTRIES, HEADS OF GOVERNMENT-LEVEL AGENCIES, AND CHAIRMEN OF PROVINCE AND CITY PEOPLE'S COMMITTEES DIRECTLY UNDER THE CENTRAL GOVERNMENT SHALL BE RESPONSIBLE FOR ENFORCING THIS DECISION./.