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Participation Of Non-state Actors In Formulation Of Trade Policy In Vietnam

Working paper by Dao Ngoc Tien, Nguyen Quynh Huong, Nguyen Thu Hang, Ngo Chi Le, 2013

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Vietnam has laid the initial legal foundation for consultation in trade policy development. The current consultation of trade policy in Vietnam can be divided into 3 layers, based on relationships between the bodies. The core layer with frequent and effective consultation includes those currently working in state sector, including government research institutes. At the centre of this core layer is the operation of MoIT as the main ministry relating to trade policy and NCIEC as the inter-ministries coordinating agency. However, this should not be considered as the consultation as all the actors are government with different policy making authority. Expanding from this core, the second layer will includes those are former governmental officials (head of business associations) and VCCI, which has a “special” relation with government. It is a part of business-focus consultation as it only allows indirect interaction rather than direct between enterprises and government.

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PARTICIPATION OF NON-STATE ACTORS IN FORMULATION
OF TRADE POLICY IN VIETNAM








Research team: Dao Ngoc Tien1 (PhD)
Nguyen Quynh Huong (MA)
Nguyen Thu Hang (MA)
Ngo Chi Le (MA)



































1
Corresponding author at email: dntien@ftu.edu.vn




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ACKNOWDLEDGMENT




The authors would like to express our gratitude to the State Secretariat for Economic
Affairs (SECO) and the World Trade Institute (WTI), in particular its Academic
Cooperation Project, for supporting this research project,


Special thanks to Professor Pierre Sauvé from World Trade Institute for his supervision,
valuable comment and guidance in this working paper.




Dao Ngoc Tien
Foreign Trade University,


Vietnam





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Table of Contents




CHAPTER 1: INTRODUCTION ......................................................................................................................... 8


1.1. Rationale of research .................................................................................................................... 8


1.2. Research questions ....................................................................................................................... 9


1.3. Literature Review ........................................................................................................................ 10


CHAPTER 2: LANDSCAPE ON NON – STATE ACTORS ................................................................................... 15


2.1. Concept of non-state actors ....................................................................................................... 15


2.1.1. Non-state actors in other countries .......................................................................................... 15


2.1.2. Non-state actors in Vietnam ..................................................................................................... 16


2.2. Overview of enterprises in Vietnam ........................................................................................... 17


2.2.1. Types of enterprises in Vietnam ............................................................................................... 17


2.2.2. Pattern of goods export in Vietnam by kinds of economic sectors and industries .................. 20


2.2.3. Total revenue and density of enterprises in Hanoi and Hochiminh city ................................... 21


2.2.4. Types and Management structure of State owned enterprises ............................................... 23


2.3. Overview of business /industry association/unions in Vietnam ................................................. 23


2.4. Overview of civil societies (NGOs, Chambers of Commerce, Trade Unions) .............................. 25


2.4.1. Trade Unions ............................................................................................................................. 26


2.4.2. Chambers of commerce ............................................................................................................ 26


2.4.3. Social funds, NGOs .................................................................................................................... 27


2.4.4. Others ....................................................................................................................................... 28


2.5. Academia .................................................................................................................................... 28


2.5.1. Universities ............................................................................................................................... 28


2.5.2. Academy and research institutes .............................................................................................. 29


2.5.3. Private research institutions ..................................................................................................... 29


CHAPTER 3: STRUCTURE OF THE POLICY MAKING PROCESS ...................................................................... 30




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3.1. Overview of trade policy formulation in Vietnam ...................................................................... 30


3.1.1. Formulation of commitment based trade policy ...................................................................... 30


3.1.2. Formulation of unilateral trade policy ...................................................................................... 33


3.2. The structure of the trade policy making consultation mechanisms ......................................... 33


3.2.1. Inter-ministerial/departmental coordination ..................................................................... 34


3.2.2. Business-focus consultation ................................................................................................ 36


CHAPTER 4: EMPIRICAL STUDIES ................................................................................................................ 43


4.1. Overview of the survey ............................................................................................................... 43


4.1.1. Methodology ....................................................................................................................... 43


4.1.2. Proportion of survey recipients .......................................................................................... 43


4.2. Analysis and findings ................................................................................................................... 44


4.2.1. Why do actors participate in the trade policy consultation process? ................................ 44


4.2.1.1. From the Government’s perspective .............................................................................. 44


4.2.1.2. From non – state actors’ perspective ............................................................................. 45


4.2.2. Who are involved in the trade policy formulation? ............................................................ 47


4.2.3. How do actors involve in the trade policy making process in term of methods and content


of consultation? .................................................................................................................................. 51


4.2.3.1. Method of consultations ................................................................................................. 51


4.2.3.2. Content of consultation .................................................................................................. 54


4.2.4. When does the trade policy consultation process occur? .................................................. 56


4.2.5. What are the challenges in trade policy consultation process? ......................................... 59


CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS ............................................................................. 63


References .................................................................................................................................................. 67


Appendix I: Questionnaire ............................................................................. Error! Bookmark not defined.


APPENDIX II: Statistical description of variables ............................................ Error! Bookmark not defined.


APPENDIX III: Statistical test of differences by Headquarter’s location ........ Error! Bookmark not defined.


APPENDIX IV: Statistical test of differences by State-investment ................. Error! Bookmark not defined.




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APPENDIX V: Statistical test of differences by Foreign Direct Investment .... Error! Bookmark not defined.






List of tables
Table 2.1: Number of enterprises by types in Hanoi and Hochiminh city year 2011 ......................... 22
Table 3.1: Main responsible Ministries for trade sectors ...................................................................... 32
Table 3.2: Participation of stakeholders in negotiation for international trade agreements in
Vietnam ...................................................................................................................................................... 35
Table 3.3: Consultation Mechanism in Vietnam .................................................................................... 39
Table 4.1. The proportion of surveyed recipients .................................................................................. 43
Table 4.2. Reasons for government to carry out consultation in trade policy process ....................... 44
Table 4.3. Reasons for non-state actors to participate into trade policy process (by location) .......... 46
Table 4.4. Reasons for non-state actors to participate into trade policy process (divided by their
ownership) ................................................................................................................................................. 47
Table 4.5. Actors involving in trade policy formulation in Vietnam with frequency ......................... 48
Table 4.6. The frequency of consultation with other partners in trade policy process....................... 49
Table 4.7. The enterprises’ targets of advocacies ................................................................................... 50
Table 4.8. Ways of enterprise’s engagement into trade policy on participation’s methods ............... 52
Table 4.9. The government’s ways to ask for consultation from non-state actors .............................. 53
Table 4.10. Enterprises’ capability about trade policies ....................................................................... 54
Table 4.11. The enterprises’ attitude as the policy affects negatively their activities ......................... 55
Table 4.12. The importance of the enterprise’s participation in formulation and implementation of
trade policy at each stage ......................................................................................................................... 57
Table 4.13: Challenges preventing enterprises from further participating into ................................. 59
Trade policy process ................................................................................................................................. 59





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List of figures
Figure 2.1: Percentage share of Vietnam GDP by types of ownership of enterprises ........................ 18
Figure 2.2: Total revenue, profit and contribution to government’s budget of Vietnamese State
owned business groups and central corporations (in billions VND) .................................................... 19
Figure 2.3: Percentage share of Vietnam GDP by non-state sectors .................................................... 20
Figure 2.4: Pattern of Vietnamese exported goods by kinds of economic sectors (in percentage) .... 20
Figure 2.5: Pattern of Vietnamese exported goods by industries from 2005-2011 (in percentage) ... 21
Figure 2.6: Turnover by types of enterprises in Hochiminh city and Hanoi year 2011 ..................... 22
Figure 2.7: Frequency of Vietnamese Association’s consultation on enhancing the business
environment per year ............................................................................................................................... 25
Figure 2.8: Main topics of the dialogues between associations and government offices..................... 25
Figure 3.1: Formulation of commitment-based trade policy ................................................................ 30
Figures 3.2. Consultation mechanisms of trade policy .......................................................................... 34
Figures 4.1. Managers in Vietnam Industry/Business Associations ..................................................... 48
Figure 5.1. The spheres of State Actors and Non-State Actors in the trade formulation in Vietnam
.................................................................................................................................................................... 63






List of boxes
Box 1: The operation of VCCI’s Advisory Committee on International Trade Policy ...................... 38
Box 2: Low perception of enterprises on the Trans-Pacific Partnership Agreement at early stage . 58
Box 3: Challenges to trade policy formulation in African countries .................................................... 61





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List of abbreviations


APEC Asia-Pacific Economic Cooperation
CITP Committee on International Trade Policies
CSO Civil Society Organization
EPA Economic Preferential Agreement
FTA Free Trade Agreement
INGO International non-governmental organization
LEFASO Leather and Footwear Association of Vietnam
MoET Ministry of Education and Training
MoIT Ministry of Industry and Trade
MoST Ministry of Science and Technology
NA National Assembly
NCIEC National Committee on International Economic Cooperation
NGO Non-governmental organization
NSA Non-state actor
SME Small and Medium sized Enterprises
TPP Trans-Pacific Partnership
US United States
VASEP Vietnam Association of Seafood Exporters and Producers
VCCI Vietnam’s Chamber of Commerce and industry
VICOFA Vietnam Association of Cocoa and Coffee
VITAS Vietnam Association of textile and apparel
VUFO Vietnam Union of Friendship Organization
WTO World Trade Organization









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CHAPTER 1: INTRODUCTION


1.1. Rationale of research


In the nowadays global economy, international trading has become an essential part in the daily
activities of all countries. Especially, export-import activities have become the locomotive for
economic development of developing countries like Vietnam. Naturally, when it comes to export
activities, one would like to enter markets with lower trade and non – trade barriers; which
explains the need of governments to negotiate for lower tariffs, for instance, from their trading
partners. Reciprocity basis would then require the exporting countries to as well open their
markets for imported goods to come in more freely. However, often governments would try to
protect their economy from the competition of imported goods and presence of foreign
businessmen to some extent, especially when they want to nurture vulnerable industries. The
export interest and import sensitivity do not go along together; hence, governments will have to
make decisions: which domestic industries to protect with all cost? Which ones to trade off for
market access into potential markets for strong export products? These decisions are realized in
trade policies, and reflected in official documents between the governments of different
countries, normally in the format of trade agreements, such as Free Trade Agreements (FTA) or
a commitment/membership to a common trading framework (for example, the World Trade
Organization (WTO) Agreement). Once governments bind their decisions in official documents,
the country has to conform to its commitment, which can affect deeply the nature, the scale, the
efficiency and the format of the business and activities of many sectors nation-wide. Needless to
say, governments’ decisions have to appropriately reflect the needs of the business community as
a whole, after balancing interests of exporters and importers, of private sectors and public
sectors, of other social groups. In the process of making decisions related to trading activities, or
trade policy making process, governments need to be backed up with information from interest
groups, especially the private sectors to have accurate calculation of benefits (e.g from exporting
activities) vs. loss (e.g. from losing local market to foreign competitors). The information is
necessary not only before the governments step in any trade negotiation (trade policy
formulation) but as well after that, during the implementation of trade policy, so that any
inappropriate steps can be revised somehow in the current policy or fixed in future commitment.
This information feeding – processing – selecting – implementing process is referred to as trade
policy consultation or participation of non – state sector in international trade policy.


Not only government will benefit from the participation of non – state actors in the trade policy
making process, non – state actors also gain benefits from these opportunities. Non – state actors,
especially private sectors, are heavily and directly affected from the implementation of trade
policies in the countries. Therefore, if they succeed in delivering their concerns to the




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government, and have their interests reflected in the trade policies (e.g. opening foreign market
access to their exporting products), their business activities will definitely boost up. Contrarily, if
the trade policies contain unfavorable conditions for their activities (e.g. the government decides
to open the domestic market of their sector), they will have to face fiercer challenges and
competition. Participation in trade policy making process will possibly not only bring more
opportunities and fewer challenges to non – state actors but as well prepare them for the
outcomes of the process, i.e. the finalization of the policies and the implementation process.
Participating in the trade policy consultation helps non – state actors to receive information on
the direction of government’s trade policy and helps them to be ready to reap opportunities and
face with challenges.


In conclusion, participation of non – state actors in international trade policy formulation and
implementation is very important for both government and non – state actors themselves.


1.2.Research questions


With the rationale set forth, the research team will seek to describe the roles of non – state actors
in the trade policy making process in Vietnam within this paper. The research aims to answer
following research questions:


Research question 1: Why do actors participate in the trade policy consultation process?
Research question 2: Who are involved in the trade policy formulation?
Research question 3: How do actors involve in the trade policy making process in term of
methods and content of consultation?
Research question 4: When does the trade policy consultation process occur?
Research question 5: What are the challenges in trade policy consultation process?


In answering the above research questions, we analyze the perspectives of both enterprises
(typically representative for non-state actors) and of the government towards the role of non –
state actors in the trade policy making process. The mismatch of reasons, methods, time, etc. of
consultation between enterprises and government will expose problems in the Vietnam’s trade
policy consultation.


In addition, in the scope of this research, we try to find out the link between different enterprises’
characteristics and the participation in trade policy formulation relating to the above research
questions. Three characteristics of the company will be analysed in details, including:


- Location of company’s headquarter either in the North or South of the country, which
reflects the proximity to political actors.




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- Presence of state-owned capital, which implies a special channel to affect policy through
ownership rather than consultation.


- Presence of foreign direct investment, which implies the market-based operation.


1.3.Literature Review


The complex process of foreign trade policy making involves and affects various actors whose
relative importance has shifted as issues have changed and grown more diverse. This fact creates
the need for multi stakeholder consultations and inclusive trade policy-making and
implementation processes. Brian Hockling - Professor of International Relations, Coventry
Business School, Coventry University, in World Trade Review 2004, showed that the growing
trend towards the expansion and redefinition of trade consultative processes was another facet of
the concern with transparency and access, which has become a crucial part of the debate on
globalization and global governance, not least in the World Trade Organization (WTO).
Moreover, establishing accountability and transparency in trade policy outside the borders of the
state is engaged inevitably to their development inside the countries.




Nowadays, there has been a great deal of research on the role of non-state actors (i.e. enterprises
and civil society organizations) contributing to the changes in the institutional mechanism and
implementation of trade policy in countries. Researchers worldwide have been debating on the
role and importance of non-state actors in the trade policy making process from various
perspectives.


Hyun-Seok Yu (2003) in the paper on “Transnational Actors and Foreign Policy Making in
South Korea: The Case Studies” demonstrated the increasing importance of non-state partners
in Korea's foreign policy making with two case studies. The Council for the Women
Drafted for Sexual Slavery by Japan case shows how international non-governmental
organizations redefined issues so as to draw international attention and support from
governments and other established international organizations. Their efforts compelled both
the Korean and Japanese governments to alter policy. In the second case, the American
Chamber of Commerce in Korea - a foreign based interest group for developing trade and
commerce between Korea and the U.S. - succeeded in changing Korean and the U.S’
foreign policies towards members' benefits through both direct lobbying and more back-channel
tactics. However, the research did not advice the legitimacy and the specific mechanism for
consultation.


Brian Hockling (2004), in his article: “Changing the terms of trade policy making: from the
‘club’ to the ‘multi-stakeholder’ model” showed the logic of trade consultation of the legitimacy




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and the involvement of a broader cross-section of interests as represented in enterprises and civil
society organizations, particularly in NGOs. He examined with specific reference to the
development of trade policy process in the Canadian and European Union contexts, then
suggested that it was possible to analyze the development of at least some national trade policy
environments in terms of a shift from a ‘club’, or through an ‘adaptive club’ to a ‘multi-
stakeholder’ mode of consultation. The author affirmed that transforming closed systems into a
multi-stakeholder model could embrace the expanding range of constituencies with an interest in
the trade agenda, and that new ‘rules of engagement’ between the key sets of actors –
government, business and NGOs – were gradually being shaped, based on shared interests in
trading resources – knowledge, legitimacy and access. However, the research did not reveal
how the actors could make their roles in the trade policy process.


In July 2005, a research on “Trade Policy Reforms and Poverty in Kenya: Processes and
Outcomes” of Walter Odhiambo and Gloria (KIPPRA) stated that there was limited participation
of actors including the society, enterprises and State due to the absence of an effective
cooperation mechanism among them. Later, in June 2007, KIPPRA executed a paper on “Trade
Policy-Making Process in Kenya: The Institutional Arrangements and Interaction of Actors”.
The study identified factors that contribute to a process of developing, implementing and
monitoring effective trade policies in Kenya, which calls for interaction between domestic and
international factors. However, the study emphasized the role of the ministries and departments
of the government, and mainly recommended enhancing such roles of these agencies in the
process of trade policy making.


The research “Towards More Inclusive Trade Policy Making: Process and Role of Stakeholders
in Select African Countries” published by CUTS international (2009) described the consultative
mechanism for stakeholders' participation in five African countries (Kenya, Malawi, Tanzania,
Uganda, and Zambia) anddocumented that the private sector had many more institutional
mechanisms to interact with the government on different issues including trade. Hence, the
general impression in project country stakeholders, particularly the civil society, that the private
sector, particularly the apex business umbrella organizations as well as powerful sectoral
organizations/individual firms have substantial influence on government trade policy making.
Consequently, the paper gave a general impression on national stakeholders, the civil society in
particular, that private sectors, especially the apex business umbrella organizations as well as
powerful sectoral organizations/individual firms could have substantial influence on
governmental trade policy making. However, there existed no single consultative mechanism
with a legal mandate. Its role was generally to provide a discussion forum in which private actors
were asked to provide inputs and advice regarding the country position in the WTO and
Economic Preferential Agreements negotiations. Whether and how these views and advices




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were taken on board was not often published to non-governmental stakeholders; hence, those
actors were often frustrated. This weakness of the mechanism needs to be seriously addressed.


In June 2009, Trevor Simumba published a paper in the Journal of the European Centre for
Development Policy Management on "Private Sector Participation in Aid for Trade: Breaking
Barriers to Private Sector Growth" and once again highlighted the role of the private enterprise
sectors in coordination with the State to effectively implement a supporting package for
commerce and trade development. The research proposed easing the cumbersome regulations,
and gave some recommendations to eliminate barriers to the development of private enterprises.


In 2010, Ann Capling and Patrick Low, in the book: “Governments, Non-state actors and Trade
Policy- making: Negotiating preferentially or multilaterally” indicated that the theories of trade
policy-making relates to state-centric approaches, societal approaches and as well a synthetic
approach. The research then conducted empirical studies in eight developing countries (Chile,
Colombia, Mexico, Indonesia, Thailand, Jordan, Kenya, and South Africa) showing how non-
state actors saw their interests, participated and sought to influence the government. The specific
case study could bring some lessons for inclusive participation of NSAs in trade policy process
in countries. However, it focused only on the process of trade agreements negotiations and did
not bring any conclusion on a clear mechanism with mandates.


Deepta Chopra (2010) studied the Indian government's role and interactions with the society in
the realm of policy–making by conducting an empirical case study on the National Rural
Employment Guarantee Act (NREGA) process in India, which had demonstrated the
Government’s consultation with the CSOs (Civil Society Organizations) during policy – making
process. The consultation was considered a strategy for the Government to govern its population;
and, in turn, the state itself was reconstituted in the policy – making process. Encapsulating from
feedbacks in five countries in Africa (Kenya, Malawi, Uganda, Tanzania, and Zambia), Rashid S
Kaukab (2010) in “Inclusiveness of Trade Policy-Making: Challenges and Possible Responses
for Better Stakeholder Participation” gave some suggestions for better consultation with non-
state actors in trade policy- making process. Firstly, the government should build knowledge and
expertise of all stakeholders on priority trade issues. Secondly, improving and providing regular
information on trade issues to key actors was also necessary to promote general understanding
and the quality of participation by stakeholders in consultations on trade. Thirdly, it was
suggested that the government should rationalize and strengthen consultative mechanisms.
Fourthly, they should improve the participation opportunities for CSOs, then balance
representation of members’ interests by private sector umbrella organizations. Finally, no
improvement in capacity, co-ordination, mandates or procedures could have a lasting impact in
the absence of dialogue and inclusiveness; therefore, the government should strengthen the




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culture of dialogue and inclusiveness. The author did not recommend an effective structure for
inclusiveness and advice on legal regulations and ways to influence the policy making decision.


In the same vein of issue, Heng Wang with the research entitled "Enhancing Business
Participation in Trade Policy-Making: Lessons from China" (The International Development
Research Center) suggested that governments should increase the participation of the business
sectors in the process of trade policy implementation. However, the research just suggested some
recommendations but did not give a specific effective mechanism; additionally, the objective of
this involvement mainly aims to enhance transparency according to China’s WTO membership
commitments.


In 2011, Kevin McKague published “Dynamic capabilities of institutional entrepreneurship”
(Journal of Enterprising Communities: People and Places in the Global Economy), the first study
to combine the institutional theory and the literature on dynamic capabilities to identify the
necessary skills for businesses to successfully change the institution. However, this study was
based on a specific case, leading to limited lessons to learn from. Research on more enterprises
would be needed.


Professor Robert A. Rogowsky (President of Institute for Trade and Commercial Diplomacy) in
his lecture on “Trade Negotiation” Training Course in Viet Nam (2012) showed the structure of
trade formulation in the US including all stakeholder participation of United States Congress,
Trade Policy staff committee (e.g. technical experts from ministries and other councils), Trade
Policy Review Group (including US trade representatives and high level political officials from
agencies) and Industry Trade Advisory Committees (including private sector, enterprises, NGOs,
etc.). The working relation of those groups is regulated in the US’s law, so that this mechanism
works strongly and frequently for better trade policy decision. However, the implementation of
trade policy and specific legal regulations should be studied deeper.


In Vietnam, the importance of the participation of non – state actors, especially enterprises, in
the process of formulating and implementing international trade policy in Vietnam has not been
thoroughly studied so far.


In 2009, Vietnam Chamber of Commerce and Industry (VCCI) implemented the program
"Enterprises and International Trade Policy" to promote the effective participation of the
business community in the process of policy making, negotiation and implementation of
international trade commitments through three parallel mechanisms: the Advisory Committee of
international trade policy, advocacy mechanism for flexible policy, and the awareness and
capacity building on the international trade advocacy for the business association. These
activities have been only in the very first stage and have not yet left any significant effects.




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In the same line of research, Professor Kenichi Ohno from the Japan Economic Research
Institute shared his perspective on the process of strategic industry and policy formulation of
Vietnam at the Vietnam Development Forum, confirmed that the process of policy making in
Vietnam was one of a kind. Most policies were built with very limited involvement of the
business. The business community was often allowed to give comments when it is too late, e.g.
only after problems have arisen. In his conclusion, Kenichi Ohno recommended a policy-making
process for Vietnam based on the lessons from other East Asian countries. Regrettably, the
conclusion did not take into account factual situations in Vietnam.


Moreover, there are several related papers on online newspapers (e.g. “Business community in
Vietnam & the process of negotiation participation – executing international commitments: Good
signs in 2011” (“Cộng ñồng doanh nghiệp Việt Nam & hành trình tham gia ñàm phán- thực thi
cam kết quốc tế: Tín hiệu vui 2011)” (The journal of legislation – Tạp chí Pháp lý); “Mutual
benefits” (“Lợi cả ñôi ñường”) (Institute of Southest Entrepreneur and Enterprise Development);
“Reflect when looking at others” (“Trông người mà ngẫm ñến ta”) (Vietnam leader) identifying
the important role, the direction and the consequent benefits of the participation of enterprises in
the process of trade policy formulation and implementation.


General speaking, the previous researches affirmed the importance of an inclusive participation
of all stakeholders in trade policy process (formulation and implementation) as an evitable
requirement for globalization and liberalization approach in all over the world, particularly in
developing countries. Some countries have conducted the effective engagement of all
stakeholders in some negotiations for Free Trade Agreements (FTAs) or Economic Preferential
Agreements (EPAs). However, the weakness remains in the method to build an official
mechanism with mandates to ensure legal powers that allow non-state actors to effectively and
frequently cooperate with and influence the government. Besides, most of the papers mainly
focused on trade policy formulation, and not much study was done on a structure for
implementing trade policy. While some papers already suggested a better engagement of the
business community into trade policy – making process, a formal mechanism for both trade
policy formulation and implementation and specific legal regulations should be more thoroughly
studied in the context of Vietnam.




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CHAPTER 2: LANDSCAPE ON NON – STATE ACTORS


2.1. Concept of non-state actors


2.1.1. Non-state actors in other countries


In the literature, the non-state actors have been defined differently and applied loosely depending
on the research context and the settings of political system in different countries. While
analyzing NSAs’ roles in trade policy’s decision making and forum choice (preference or
multilateral trade agreement negotiation), Capling.A and Low.P (2010) regarded NSAs as both
economic and socially-motivated NSAs. They commented that in the practice of trade policy
formulation in different countries, not all the NSAs show their interest, raise their voice in the
participatory dialogues or actively influence on the policy making process.


In the case of Chile, Herreros.S (2010) indicated that the Chilean business associations had been
the most active NSA in preference trade agreement negotiations since 1990. For this country,
labor organization, academic institutions and civil social organizations had participated in the
process only since late 1990s.


Meanwhile, NSAs in Columbia which were interacting with Columbian state actors in the
country’s trade policies are business, farmers’ associations and civil society organizations
(Agriculture Salvation’s organization and Health Mission) according to Gomez.H.J and
Gamboa.J (2010).


In Mexico, Zabludovsky.J and Pasquel. L (2010) remarked that business sectors joined the
consultation since this country’s accession to GATT. Other Mexican NSAs who mainly
negotiated NAFTA and PTAs such as “environmental and labour movement or academia” have
recently showed less interest in the trade negotiation.


NSAs in Jordan, according to Khouri.R.A (2010), are business, professional and labour groups,
private voluntary organizations. The researcher noted that there were “newer” NSAs who were at
the effort to be more active since 1990s while the “old NSAs” were more powerful behind the
scenes.




Introducing about the “Indian trade policy since the Uruguay Round”, Dhar.B and Kallummal.M
(2007) regarded “trade and industry associations, trade union, civil society organizations, mass-
media, policy think-tanks” are non-state actors.




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In the study of the selected five African countries, Kaukab. S.R et al (2009) divided the non-state
players in the international trade consultation into 2 groups: (i) multi-sector and sector umbrella
private sectors (enterprises and business associations), and (ii) civil society organizations (CSOs)
included NGOs, academia and CSOs network. In details, sector umbrella organizations of main
industries in the project countries such as “tobacco, farming, exports”, etc…represent both
private and state-owned enterprises. The most dominant players in this type of NSAs are large
scale companies who can be state-owned.


In short, for these brief cases of the above countries, NSAs were figured out as: (i) non-sovereign
economic organizations that are industrial or business associations, farmer’s associations, and (ii)
civil social organization that are NGOs (labor organization, private volunteer organizations,
chamber of commerce…), academia, and mass-media. They recently have seen their interests
and showed their influence at different levels on the trade policy setting process via business
consultations which are the discussing dialogues with the government agents.


2.1.2. Non-state actors in Vietnam


The NSAs in our research’s scope is to some extents similar to the literature. We would like to
clarify the participation of four NSAs groups in the trade policy making process in Vietnam.
They are (i) Enterprises, (ii) Business associations, (iii) CSOs (including NGOs) and (iv)
Academia (including universities and research institutes).


We would like to focus on the approach of non-state actors which is in the sense that the project
actors are only able to intervene the trade policy making process indirectly and their benefit are
under the impacts of the process.


The most significantly distinguished point of this project is that the individual enterprises have
been taken into account due to their recently growing participation to the trade policy making
process. Other key reason is since 2012, The Decision No.06/2012/QD-TTg shed the light on the
mandatory consultations in international trade agreements between the government bodies and
the “business community” including individual enterprises. The enterprises were used to be
claimed that they had been neglect to the participatory dialogue with government agencies for
formulation process or the policies’ adjustment. Therefore in this project, we would carefully
investigate this type of NSAs.


Other active NSAs in the process are the industry/business association which is one of the most
crucial representatives of the enterprises. It can be argued that the industrial business associations
are probably regarded as the representatives for evaluating the interactions of enterprises with the




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state players in trade policy forming. However, in Vietnam, it is not compulsory for the
enterprises to be member of any industrial and business associations.


Local NGOs such as VCCI - the legal representatives of enterprises, and foreign NGOs (such as
Eurocham, AmCharm, etc.) are supporters for both enterprises and government trade policy
settings. The Academia are claimed to be ineffective given their efforts to make responses and
arguments to the setting of trade policies.


The Labour Union/Trade Union in Vietnam is the representative NSA for workers supporting for
their benefits in the trade policy in issues of forced labour, child labour, refugees, etc…. Recent
interview with the Vietnamese WTO representative in Geneva (2013) revealed that during the
negotiation stage for FTAs, the Vietnamese Ministry of Labour, War Invalids and social affairs
is often in charge of labor related issues and the Trade Union is invited for consultations.
However, the participation of the Trade Union to the trade policy making process in practice is
not remarkable and it is excluded in this project’s survey due to the constraint on related data and
information.


The law firms are also the legal representative for the enterprises but in Vietnam they are
frequently representing their local entrepreneur clients in dispute settlement issues, or assisting
their foreign invested company clients for investment applying procedure. Because it is difficult
to find the evidence to show that this type of NSAs implemented significant activities on trade
policy lobby, they are not regarded as the surveyed object.


2.2. Overview of enterprises in Vietnam


2.2.1. Types of enterprises in Vietnam


The Enterprise Law of Vietnam (No. 60/2005/QH11) covers the following types of enterprises:
Sole proprietorship, partnership, limited liability company, shareholding company (Articles 16 –
19), corporate group (Part VII). Among these types, companies can be either state owned (more
or less than 50% capital invested by government’s funds), or private owned (locally and foreign
capital invested) or joint ventures (between foreign and local investors).


The issue of ownerships is discussed for inference since there would be an interesting question
that whether the state-owned enterprises can be more active than the private-owned enterprises in
lobbying the policy, or can press more influence on the policy makers since their management
system is so far controlled by the government. The answer needs more facts which would be
shown in the survey results to be confirmed. The following figure shows the shares of Vietnam
GDP by these 3 sectors at current price:




18










Figure 2.1: Percentage share of Vietnam GDP by types of ownership of enterprises
Source: Writer’s calculation based on values of Vietnam GDP by types of ownership at current
price (Billion Dongs) which was retrieved from GSO’s website:
http://www.gso.gov.vn/default_en.aspx?tabid=468&idmid=3&ItemID=12978
The year 2006 is excluded due to the missing value in the GSO’s website.


The figure reveals that the percentage share of GDP by non-state sectors has been gradually
increasing since 2005. That rate is standing at 48% in 2011, which is just a mild change from
45.61% in 2005. This shows the decreasing trend of the dominant role of state-owned sectors
which has been regarded as the backbone of the Vietnam economy for years. Currently, state-
owned sector in Vietnam are mostly large scaled enterprises carrying their business in most of
main industries such as electricity, petrol, cement, constructions, energy and mineral resource,
mining, transportations, telecommunications, capital, etc…


According to the report on Vietnamese government online portal, there are currently 11 state
owned business groups (which are planned to be reduced to 7 groups) (Government Portal,
2013), and 16 state owned corporations. The following graph describes the trend of total
revenue, profit and contribution (in billions VND) of state-owned business groups and central
corporations for 5 years. During the periods of 4 years, given the fact that their revenue has been
scaled up significantly, their profit was not at a racy growth rate due to the heavy burden of


38.40% 35.93%
35.54% 35.13% 33.74% 33.03%


45.61%
46.12% 46.04%


46.53%
47.54% 48.00%


15.99% 17.96% 18.43% 18.33% 18.72% 18.97%


0.00%


10.00%


20.00%


30.00%


40.00%


50.00%


60.00%


70.00%


80.00%


90.00%


100.00%


2005 2007 2008 2009 2010 Prel. 2011


Foreign investment sector


Non- State sector


State sector





higher cost. In the graph, their profit either collapsed or stayed the same from 2008 which is the
signal of the ineffective business management.


Figure 2.2: Total revenue, profit and contribution to government’s budget of Vietnamese
State owned business groups and central corporations (in billions VND)


Source: Vietnamese Ministry of Finance, report No. 336_BC_CP dated 16.11.2012, p.6


The contribution in percentage of the foreign investment sectors to this country’s GDP also has
not been at a big jump from nearly 16% to 19% in 6 years but remarked the higher growth rate of
share of GDP comparing to the state
more than 40% of the goods exporting from Vietnam, which has been show


The next graph gives more details about the percent of GDP contributed by non
Among three non-state sectors, the household has attained the most significant contribution to
the value of the final goods from 2005 to 2011 i
research objects). The private sector has also playing a crucial role in the GDP with their
contribution up to 12% for 6 observed years. This sector includes small and mediums enterprises
and several large scaled enterprises.




-owned sectors. However, they have taken over business of
ed in


n Vietnam (the household is excluded from our






19










Figure 2.2.


-state sectors.




20




Figure 2.3: Percentage share of Vietnam GDP by non-state sectors
Source: Writer’s calculation based on values of Vietnam GDP by types of ownership at current
price (Billion Dongs) which was retrieved from GSO’s website:
http://www.gso.gov.vn/default_en.aspx?tabid=468&idmid=3&ItemID=12978
The year 2006 is excluded due to the missing value in the GSO’s website.


2.2.2. Pattern of goods export in Vietnam by kinds of economic sectors and industries




Figure 2.4: Pattern of Vietnamese exported goods by kinds of economic sectors (in
percentage)


Source: GSO’s website:
http://www.gso.gov.vn/default_en.aspx?tabid=472&idmid=3&ItemID=13215


In figure 2.4, the red line represents for the percentage of exporting goods that produced by
foreign invested sector. It attained the higher rates comparing to the domestic economic sectors


6.82% 6.21% 5.66% 5.45% 5.35% 5.22%


8.89% 10.19% 10.50% 11.02% 11.33% 11.58%


29.91% 29.72% 29.88% 30.06% 30.87% 31.21%


0.00%


10.00%


20.00%


30.00%


40.00%


50.00%


60.00%


2005 2007 2008 2009 2010 Prel. 2011


Household


Private


Collective


0


10


20


30


40


50


60


70


Domestic economic sector


Foreign invested sector




21


until 2010, then it started to decline in 2011. The reasons may come from the global recession in
which foreign investors were under the higher pressure of crises. The next graph pictures the
main industries’ contribution to the country’s total export value. Among others, the light
industries and craft productions shows the highest percentage of the whole country’s total export
values in all observed years.






Figure 2.5: Pattern of Vietnamese exported goods by industries from 2005-2011 (in
percentage)


Source: GSO’s website:
http://www.gso.gov.vn/default.aspx?tabid=393&idmid=3&ItemID=13173


2.2.3. Total revenue and density of enterprises in Hanoi and Hochiminh city


In further details, this part is aimed at picturing the density of companies (in number and in total
revenue) in two biggest cities in Vietnam for reference of the survey conducted in the part for
empirical studies. Since the survey will diagnose enterprises in which city will participate more
actively to the trade formulation.


According to the Vietnamese enterprise census year 2011, the Vietnamese General Statistics
organization divided the Vietnamese enterprises into 14 types. To simplify the research’s
questionnaire, our team rearranged these types into 5 types which are:


A. Local enterprises with more than 50% capital funded by the Government (equivalent to
type 1-5 in the census).


B. Local enterprise with less than 50% capital funded by the Government (equivalent to type
9 and 11 in the census).


0


5


10


15


20


25


30


35


40


45


50


2005 2006 2007 2008 2009 2010 Prel.2011


Heavy industries and mineral


resources


Light industries and craft


productions


Agricutural products


Forestry products


Seafoods





C. Private local enterprise (without funding from the Government), (equivalent to type 6
and 10 in the census)


D. Joint – venture (equivalent to type 13 and 14 in the census).
E. Foreign owned enterprise (equivalent to




Figure 2.6 exhibits the total value of transactions carried by different types of enterprises in two
biggest cities in Vietnam.


Figure 2.6: Turnover by types of enterprises in Hochiminh city and Hanoi year 2011
Source: Writer’s calculation ba
by GSO


In 2011, it is obvious that enterprises with type B,C,D and E in Hochiminh city in total gained
higher revenues than ones in Hanoi, especially for the local enterprise with less than 50% c
invested by the Government. In contrast, the local enterprises with more than 50% in Hanoi
obtained more revenue than ones in Hochiminh city. One of the reason is that the number of
companies typed A in Hanoi is 696 while in Hochiminh city this numb
78,676 companies typed B in Hochiminh city is as more than twice as in Hanoi. Table
presents the number of enterprises in these two cities and displays the very high density of type
B enterprises in Hochiminh city while the pr
this city than in Hanoi.


Table 2.1: Number of enterprises by types in Hanoi and Hochiminh city year 2011
Types of enterprises


A. Local enterprises with more than




type 12)


sed on the Vietnamese Enterprises Census Year 2011 provided


er is 506. Furthermore,


ivate enterprise (including collectives) locate less in


Hanoi Hochiminhcity


696


22


-8






apital


2.1






506




23


50% capital funded by the Government.


B. Local enterprise with less than
50% capital funded by the Government. 35'868 78'676
C. Private enterprise (without funding from the
Government) 35'661 22'736
D. Joint – venture. 386 587
E. Foreignownedenterprise. 1'791 2'759


Source: Writer’s calculation based on the Vietnamese Enterprises Census Year 2011 provided
by GSO


2.2.4. Types and Management structure of State owned enterprises


Obviously, the existence of state-owned enterprises dominates the joint venture, private and
foreign owed enterprises in the business community. However, their contribution to GDP is not
remarkably higher than these non-state enterprises. Their business have not been run effectively
due to the very large scale and the complex decision making process inside the organization.
Below we would like to give the overview of the state owned corporation 90 and state-own
corporation 91 (business groups) to show that these types of entrepreneurs’ business activities
are currently still depending on the state’s control but less than before.


The business groups were established since the Decision No.91/Ttg dated 07/03/1994 which
board members appointed by the President and their capital have to be at least 1000 billion VND
(roughly 47-49 million USD at current exchange rate). However, these types of business groups
have been under the equitized since 2004. The state owned corporation 90 has been set up since
the Decision No.91/Ttg was in forced. This type of company’s manager was decided by
Ministries and Local Committees with the minimum capital at 500 billion VND (roughly 23,5-
24,5 million USD at current exchange rate). The number of both types has been collapsed to 27
core companies/groups since the government has been implementing the equitization and/or
partial privatization for these inefficient ones.


2.3. Overview of business /industry association/unions in Vietnam


Assemblies, including associations, clubs, leagues, or unions (prescribed in Decree 45/2010/ND-
CP dated 21 April 2010, amended in Decree 33/2012/ND-CP dated 13 April 2012), defined as
voluntary organization of Vietnamese citizens and organizations who share the same interests
and unite for regular, not-for-profit activities […] contributing to the economic development of
the country.




24


The Ministry of Industry and Trade lists 953 associations on their website, under ““List of
Vietnam's associtations”. According to the MoIT, out of 953 associations, there are 121
associations operating in the field relating economy in Vietnam (Website of MOIT’s
associations, 2013). Those associations are established within one specific industry/business or
around a certain group of enterprises.


Business/industry associations compose of enterprises operating in the same industry, such as
VASEP (Vietnam Association of Seafood Exporters and Producers), VITAS (Vietnam
Association of textile and apparel), LEFASO (Leather and Footwear Association of Vietnam) or
VICOFA (Vietnam Association of Cocoa and Coffee). With their objectives of supporting
enterprises members, the business associations will certainly lobbying policy toward providing
benefits to their own industries. There are examples on the involvement of business associations
in trade-related policy. For example, Vietnam Association of Motorcycle and Automobiles
(VAMA) has tried to oppose the government’s decision to lower tariff on automobiles (VEF,
2013). Recently, VITAS and LEFASO has actively participated in TPP’s multi-stakeholder
consultation to urge for the accessible opening of the US’s market for textiles and apparels
products (Youth newspaper, 2013).


Enterprises associations, such as SMEs associations, foreign-direct enterprises association or
young/female enterprises association, compose of enterprises sharing same characteristics. With
their wide range of operations, enterprise associations will be more neutral in policy
consultation.


The VCCI had run a project on Evaluation of Vietnamese Association capacity conducting the
survey on consultation/lobby for policies and legal regulations implemented by the Vietnamese
enterprise associations for their members. There were several activities of the association have
been analyzed in that project such as: consultation on strengthening business environment,
research for policy lobby, organizing policy lobby campaigns, government and enterprise
dialogues, setting up enterprise linkages, auctions in government procurement …


In the following figures, the associations generally arrange meetings with government one or
twice per year. At the national level, the associations take more opportunities for the
participatory discussion with policy makers. However, the multi-industry associations at the
local level have direct talks with representatives of the government bodies less often.




25










Figure 2.7: Frequency of Vietnamese Association’s consultation on enhancing the business
environment per year


Source: Report on Vietnamese Associations’ capacity, VCCI (2013), p.70 & p.75


According to the report, there are several main topics that the associations have been
representing the enterprises to discuss with the authorities. The next graph visualizes the top
issues in their interest which are Tax, Custom regulations; Land, Resources, and other topics
include industry development policies, integration agreement commitments, monetary and
financial policies…




Figure 2.8: Main topics of the dialogues between associations and government offices
Source: Report on Vietnamese Associations’ capacity, VCCI (2013), p.78




2.4. Overview of civil societies (NGOs, Chambers of Commerce, Trade Unions)


Distinction between different types of social organizations in Vietnam is not clear and there
exists overlapping of definition and legal documents stipulating different types of social
organizations.


27%


15%


20%


17%


20%
Tax


Custom regulation


Land


Resource


Others


In general Multi-sector association National association
Orange: 1-2 times per year , Blue: 3-4 times per year


Purple: 10 times per year, Brown: more than 10 times per year




26




In general, social organizations which are recognized in the legal framework in Vietnam are
divided into:




2.4.1. Trade Unions




According to official data from the government (Communist Party of Vietnam Online
Newspaper, 2013), currently Vietnam has about eight million trade union members nationwide,
representing close to 9% of the population (roughly 90 billion) and close to 16% of the working-
age population (GSO counted 50.3 million of Vietnamese population of over 15 years old in
2011). Trade unions are stipulated under the Law on Trade union No. 12/2012/QH13 which only
came into effect on 1 January 2013 (replacing the old one in 1990). All trade unions are
facilitated under the Vietnam General Federation of Labor, which is a member of the Vietnam
Fatherland Front and has strong tie with the Communist Party. Thus, trade unions, though trade
unions might or might not be considered as non-state actors, they can hardly be considered
independent entities. The research team excluded this type of entities from our scope of ‘non –
state actors’ recognition.




2.4.2. Chambers of commerce


Foreign chambers of commerce: There are a large number of foreign chambers of commerce
established and run by members who are foreign investors/businessmen doing business in
Vietnam. Those entities are driven by business interests of foreign investors/businessmen; hence,
they are very dependent from the Vietnamese government and are often active in contributing to
trade policy making process. Some very active ones to name: EuroCham, CanCham, AmCham,
French/Korean Chamber of Commerce and Industry, etc. Foreign chambers of commerce have a
long story of lobbying for their interests. One interesting example to note dated from 2001 when
a coalition of local enterprises, American Chamber of commerce in Vietnam and other countries,
American enterprises and international organizations (272 companies and associations in total)
all signed a letter calling for Normal Trade Relations and the US-Vietnam BTA (US-Vietnam
Trade Council, 2011).




Vietnam Chamber of Commerce and Industry (VCCI): An NGO as self-defined, VCCI
“assembles and represents business community, employers and business associations of all
economic sectors in Vietnam” (VCCI website, 2013). With more than 11,000 direct members
and over 100,000 indirect ones, VCCI was appointed recently by the Deputy Prime Minister to




27


be the focal point of business community in Vietnam, to actively contribute to policy-making
and to monitor the Party’s and State’s business orientations (English VOV, 2013). VCCI’s
influential power and strong connect with the business community and the government is
recognized by all international organizations in Vietnam and in many researches. VCCI also
holds the key in comprehensive forums and seminars, for example, the Vietnam Business Forum
(VCCI news, 2013). However, the role of VCCI is still influenced by the Government; for
example, VCCI Chairman is also the Secretary of the Party Union of VCCI (“Nhan dan”
(People) Magazine, 2013). Social protection facilities/care centers (prescribed in Decree
68/2008/ND-CP dated 30 May 2008 and Circular 07/2009/TT-BLDTBXH, amended in Decree
81/2012/ND-CP).


2.4.3. Social funds, NGOs


Social funds, or NGOs, are specified under Decree No. 148/2007/ND-CP dated 25 September
2007. The Decree aims to direct the organization and activities of charity funds and social funds,
but define those funds as ‘NGOs that have legal status, organized by one or more individuals or
voluntary organizations volunteering to contribute a certain amount of money […] with the aim
of supporting cultural, educational, health, sport, scientific, charity and humanitarian activities
for the society, not for profit purposes’ (Article 3, Decree No. 148/2007/ND-CP). The Decree
applies for Vietnamese individuals and organizations, joint ventures and enterprises with 100%
foreign investment, as well as foreign individuals and organizations who contribute to the funds
(Clause 2, Article 1, Decree No. 148/2007/ND-CP).


Foreign NGOs (herein referred to as International NGO or INGO) in Vietnam were formally
administered under Decision 340/TTg from 1996, and from 1 June 2012, administered under
Decree 12/2012/ND-CP (NGO Centre website, 2013) that came to effect on 1 June 2012.


Vietnamese government issues Certificates of Registration for three types of an INGO's status: a)
Operations; b) Project Office and c) Representative Office. Applications for registration are to be
sent to the Committee for Foreign NGO Affairs (COMINGO). The People's Aid Coordinating
Committee (PACCOM) under the Vietnam Union of Friendship Organizations (VUFO) has the
responsibility to work closely with INGOs and facilitate activities of INGOs in all provinces in
Vietnam (NGO Centre, 2013).


INGOs, through the VUFO-NGO Center (The VUFO-NGO Resource Centre was established in
1993 through a partnership between INGOs working in Vietnam, and the Vietnam Union of
Friendship Organisations (VUFO)), can have dialogues with the government institutions, and
local NGOs. According to the survey made in 2003 of the VUFO-NGO Center, INGOs were




28


very much interested in getting more information on new laws and regulations (74% replied that
this is their most concern) (Member survey of VUFO-NGO Centre, 2003). However, in the most
recent annual report in 2009, VUFO-NGO Center announced that they have Working Groups to
work with INGOs dealing with only: Agent Orange, Child Rights, Climate Change, Disability,
Disaster Management, Ethnic Minorities, Eye Care, HIV/AIDS, Information and
Communication Technology for Development, Landmines, Microfinance, and Water Supply and
Sanitation. No Working Group was established to work with INGOs dealing with trade issues
(Page 6, 2009 VUFO-NGO Centre Report). This shows the lack of contribution of INGOs
connected to VUFO-NGO Center to trade policy making process. Consumer protection
associations: In Vietnam, consumer protection associations are either under the umbrella of
Ministries, or work as independent units. They do not deal directly with business/trade policy but
rather protect consumers via raising awareness, reporting unsafe goods, etc.


2.4.4. Others


There exist as well other forms of social organizations such as think tanks or incubation centers
for young entrepreneurs. Those organizations fall into the categories above, depending on the
type of activities they carry out.


Except assemblies, all other types of local social organizations are considered serving the
purposes of social/charity/humanitarian/scientific interests. They do not contribute to Trade-
related policy making process.


2.5. Academia


The academia sector in Vietnam composes of different actors involving in either research or
training activities in Vietnam as followed:


2.5.1. Universities


According to the law of education, university system in Vietnam is under the management of the
MoET, except for 2 national universities. In 2012, there are 139 universities under the MoET, of
which 109 are public universities and 30 are private. Those public universities focus more on the
training than research activities, even though some plan to become research-based university.
On the research side, the higher education system is not performing to expectation. According to
the survey in 2012 by the World Bank, the research output of over 70 universities in Viet Nam is
very worrying. This is explained by the very poor funding for research at universities. (Nguyen
Ngoc Anh et.al, 2013)




29


The research projects will be managed by MoET or MoST (for state-level project) from idea
generation to results approval. There are representatives from other ministries involved in the
whole process as member of evaluation boards but they are all acts on personal capacity. So,
there is no evidence on the direct links of universities’ research with the policy making.


2.5.2. Academy and research institutes
In addition to MoET’s system of universities, there are academy and research institutes
belonging to other ministries. They are all operating on the budget from those superior
ministries. Similar to MoET’s universities, academies, such as Diplomatic Academy of Vietnam
(Ministry of Foreign Affairs) or Banking Academy (State Bank of Vietnam) has both training
and researching functions. However, research institutes focus only on research activities,
including strategy, plan and other projects as requested by their ministries.


In the field of trade policy, MoIT has 2 research Institutes of Trade (formerly belonging to
Ministry of Trade) and Industrial Policy and Strategy Institute (formerly belonging to Ministry of
Industry). Further discussions with those institutes reveal that they are in charge of helping
minister to prepare strategy or proposal plan, which will be submitted to the Government for
approval, while other ministries’ functional department will be in charge of preparing legal
document guidelining the implementation of the law or strategy under the form of decrees and
circulars. In conclusion, research institutes maintain the important role in preparing strategies or
feasible study to participate in FTAs (strategic policy) rather than regular participating in policy
making.


2.5.3. Private research institutions


Scientific research institutions, scientific and technology development research centers, science
and technology services centers (prescribed in Circular 02/2010/TT-BKHCN dated 18 March
2010), applied for all individuals and organizations who establish scientific and technology
organizations, for profit or non-profit


In Vietnam, there are also private research institutions/research centres operating in Vietnam
under Government Decree 115/ND-CP. According to MoST, there are 1661 private research
institutes in Vietnam in 2013, but most of them in the fields of technical sciences. There are few
institutions relating to trade, such as Development and Policy Centre (DEPOCEN), Mekong
Economics, Indochina Research Centre (IRC), etc. However, they usually work on contracts
with international organizations (WWB, UNIDO) to produce policy recommendation paper. In
general, they are do not directly influence the policy of the government but rather through the
international organizations.




30


CHAPTER 3: STRUCTURE OF THE POLICY MAKING PROCESS


3.1. Overview of trade policy formulation in Vietnam


Trade policies can be defined as any regulations issued by the government that can directly or
indirectly affect price or availability of goods and services (Nguyen H.N, 2009). This broad
definition implies that trade policy in Vietnam can be a decree of any ministries or even an
official document issued by ministerial-level agencies.


Similar to other countries, trade policy in Vietnam is reflected in either an international
agreement or in the framework of the national law, which herein after will be called commitment
– based and unilateral trade policy respectively. The former is promulgated to implement
international commitment that Vietnam has made. In principles, in case of international
commitment, Vietnam has to follow by promulgation and implementation of relevant policies.


The later, unilateral trade policy, is promulgated without international commitment but for the
benefits of the country. In this case, Vietnam can change the policy whenever it finds necessary.
Often, the distinction is not clear as Vietnam has promulgated new or revised current laws during
the period of international negotiation. However, the formulation processes as well as legal basis
are different in two cases.


3.1.1. Formulation of commitment based trade policy


As shown in the below flow chart, the formulation of commitment based trade policy in Vietnam
includes 4 key stages:














Figure 3.1: Formulation of commitment-based trade policy


According to the Law on signing, participation and implementation of international agreement
(Law No.41/2995/QH11), the issue of participating of international agreement will be initiated
by responsible ministry, then, be submitted to the government. There is normally is a feasibility


Approval of
international
agreement by


National
Assembly (2)


Promulgation of
trade policy


(3)


Implementation
of trade policy


(4)


Negotiation of
international
agreement


(1)




31


study carried out by the ministry’s research institute to serve as basis for the recommendation.
The law also provides MOFA and MoJ to be mandatorily consulted while other ministries and
relevant organization are not specifically mentioned. The decisions to join any international
agreement or start the international negotiation are then made by the Prime Minister. It is
assumed that before the Prime Minister makes these decisions; there are usually consultations
between the government and the Socialist Party.


Within the country, legal documents of Vietnam are basically divided into 2 main tiers (i) Law,
which is approved by the National Assembly; (ii) Decree and Circular, which is issued by
relevant ministries guidelining the implementation of the Law. According to this classification,
each governmental body plans its own annual schedule for legal documents development. At the
highest level, the National assembly has its annual law and ordinance development program.
Before approved by the National Assembly for the next year, the program is discussed among the
NA’s deputies, who represent the whole society. Among the national Assembly’s deputies,
91.6% are Communist Party’s members and only 30.8% are permanent members (National
Assembly website, 2013). Consequently, there is concern that the National Assembly is affected
by the Political Party as well as the government. At the lower lever, according to the NA’s
schedule, once the law is passed, relevant ministries will have plans to draft and issue decree and
circulars accordingly.


In Vietnam, the decision on the policy on trade of goods concentrates in the Ministry of Industry
and Trade (MoIT) but it relates to other ministries when the policy deals with specific issues. On
the other hand, the decision on the policy on trade of services is scattered at different ministries.
This fact is quite matched with the comment of Wolfe.R and Helmer.J (2007) that there exists
the colliding as well as the overlapping between the domestic policies and the trade policies.
Table 3.1 shows the current systematic relations among government agents in trade issues in
Vietnam.


In addition to ministries, there is the Vietnamese National Committee for International Economic
Cooperation (NCIEC) which was established and supervised directly by the Government. The
NCIEC is one of the seven inter-industries coordination established by the Prime Minister but de
facto, it belongs to MoIT. This Committee could bring in time interaction and information
transparence on trade issues among governmental departments from the very early stage of trade
policy formulation.


This system is not different from other countries’ trade policy making model. Other counries also
rely on an inter-ministries body to help connect different ministries regarding trade policies
decisions. For instant, as mentioned by Worlfe.R and Helmer.J (2007), the Foreign Affairs of
Norway and Brazil, or the Department of Trade of Canada, or the Netherland Economics Affair,




32


or the Department of Commerce in India are all leading government bodies dealing with trade
policies in their countries.


Table 3.1 demonstrates how responsibilities are divided among different ministries when dealing
with trade policy decisions affecting different sectors. MoIT is mainly in charge of all issues
related to Trade in Goods, while issues related to Trade in Services, Government procurement, or
Dispute settlement issues fall into the control of different ministries.


Table 3.1: Main responsible Ministries for trade sectors
Trade sector Main responsible Ministries
Trade in Goods Ministry of Industry and Trade
Trade in Agriculture, SPS issues Ministry of Agricultural and Rural


development
TBT issues Ministry of Science and Technology
Government Procurement Ministry of Planning and Investment
Labour relating issues Ministry of Labour, War Invalids and social


affairs
Dispute Settlement issues Ministry of Justice
Communication service Ministry of Information and Communications
Construction and related engineering
service


Ministry of Construction


Distribution service Ministry of Industry and Trade
Educational service Ministry of Education and Training
Environmental service Ministry of Natural resources and Environment
Financial service Ministry of Finance


State Bank of Vietnam
Health related and Social services Ministry of Health


Ministry of Labour, War Invalids and social
affairs


Tourism and travel related service Ministry of Culture, Sport and tourism
Recreational, cultural and sporting
service
Transport service Ministry of Transport




From the enterprises’ views, the MoIT is the most influential ministry on their operation. Asking
on the effects of ministerial policies, responded enterprises said rate MoIT’s policy at 3.0 out of
4.0, which is highest among all the authorities and much higher than the compared with the
overall average of 2.2 (authors’ survey results, 2013).




33




The authors’ survey in 2013 shows that enterprises, whose headquarters located in the South, are
affected by governmental policies more than those in the North. So, northern enterprises are
expected to involve more in the process of policy formulation, which results in their preparation
before the policy’s promulgation.


3.1.2. Formulation of unilateral trade policy


Depending on the type of trade policy, there will be a particular ministry to be in charge of
drafting the policy as mentioned above. During this period, there will be consultation among
departments and ministries. At the end of this stage, the draft will be examined by Ministry of
Justice (in particular, the Department of Examination of Legal Normative Documents).


As committed with WTO and stipulated in the Law of Domestic Legal Document Promulgation,
the draft is required to be made available for public consultation. The draft law is usually placed
in the website of relevant ministry and is open for public comments. Occasionally, relevant
governmental body organize seminars/conferences to receive comments from selected non-state
participants. Authors’ interviews with government officials reveal that business associations and
big enterprises are often invited rather than SMEs. However, the participation rate is just around
15% - 20% of the sent-out invitation letters. On the other side, from the enterprises, it is often
said that the comments has not been responded properly, so overtime, they become less and less
interested in consultation. It might lead to concerns about the real application and efficiency of
this requirement.


3.2. The structure of the trade policy making consultation mechanisms


Consultation is defined as the exchange of information through meeting, conference or any other
medium. In the research studying the reality of trade policy making process in five African
countries, Kaukab. S.R et al (2009, p.23) classified trade policy making consultation into three
mechanisms: inter-ministerial coordination only; public and private sectors representatives fora
only (business or enterprise focus consultation); and multi-stakeholders consultation (including
government authorities, civil society and private sectors).




34




Figures 3.2. Consultation mechanisms of trade policy
Source: adapted from Kaukab. S.R et al (2009)




However, in Vietnam, as mentioned in previous chapter, the roles of civil society organizations
and academia are limited, so, the multi-stakeholder consultation is not very popular. In this
research, we will focus on the inter-ministerial coordination and business-focus consultations.


Before moving to empirical results, chapter 3 will describe the regime of how consultations are
organized in Vietnam, i.e. how information flows are made available to the private sectors
through the consultative activities, and through which networks, forum or agents the sectors
would response or debate on the formulation and implementation of the trade policies. We would
like to basically focus on the mechanism and legitimate requirements of trade policy making
consultation.


3.2.1. Inter-ministerial/departmental coordination




The process of negotiation is led by Governmental Negotiation Delegation on International
Economic and Trade which was established by Decision No 30/2003/Qð-TTg dated 21/2/2003.
According to this decision, the delegation, headed by a Deputy Minister of Industry and Trade,
will draw member from other ministries on the on-the-job basis. Supporting the delegation is the
Secretariat which is part of the National Committee on International Economic Cooperation
(NCIEC). This inter-departmental structure of consultation mechanism has very well supported
the Vietnamese Prime Minister in the negotiation stage since it plays the role as the bottom-up


Inter-ministerial consultation


(Inter-departmental consultation)


Business focus consultation


Multi-stakeholder consultation


Non-state actors


State actors


MoIT


Other


ministries


Enterprises and


associations


Academia, NGOs


and CSOs




35


connection link crossing all departments of the government for information input. Similarly,
India typically organized their inter-department committee which is National Trade Advisory
Committee (NTAC) which members are their government department representatives. Wolfe. R
and Helmer. J (2007) noted that Canada set up a C-Trade committee which has both the federal
and provincial government representatives as well as 20 working groups from 17 federal
agencies. The Netherland has their Inter-department Council for Trade Policy (IRHP).


In short, the Vietnamese Governmental Negotiation Delegation is responsible for the inter-
departmental consultation, and the Vietnamese NCIEC is the government body assisting for the
delegation. With the members assigned from Ministries and Government Departments, the
Delegation and the Committee have also taken the role of business focus consultation to support
the Prime Minister and all Ministries for the international trade agreements on different sectors.
However, they did not involve directly in the multi-stakeholders. In the case of Malawi, Kaukab
R.S et al (2009) indicated that this African country designed their own National working group
on Trade policies which is not only advising the government on trade issues but also facilitating
the consultation among public and private sectors.


Table 3.2: Participation of stakeholders in negotiation for international trade agreements
in Vietnam


Stages Who are consulted Who does consult How are consulted
Initiation of the
negotiation


Vietnam
Communist Party
Governmental
research institute


National
Committee for
International
Economics
Cooperation
(NCIEC)


Internal and secret
(assumed Pre-feasibility study)


Feasibility
study of the
negotiation


Business
communities


Competent
Authorities
Vietnam Chamber
of Commercial
Industries (VCCI),
The Committee on
International Trade
Policies


Competent Authorities’ Websites
Emails
Conferences (open and/or
confidential)
Others
(considered by the competent
authorities)


Negotiation Business
communities


Vietnam Chamber
of Commercial
Industries (VCCI),
The Committee on


Competent Authorities’ Websites
Emails
Conferences (open and/or
confidential)




36


International Trade
Policies
Competent
Authorities


Others
(considered by the competent
authorities)


Approval of
agreement by
National
Assembly (NA)


All go through
deputies to NA


Macro-Advisory
Group


Research report
Conferences/seminars




3.2.2. Business-focus consultation


Before 2012, there is no mandatory system in Vietnam for the consultation of non-state sectors in
the stage of international trade agreement negotiation. However, under the management of the
VCCI, the Committee on International Trade Policies (CITP) was initiated in January 2010. This
focal agent has acted as the forum for the voice of both private sectors and government bodies on
international trade issues. Interestingly, therefore, they are to some extents able to play their role
both in the inter-ministerial consultation mechanism and the multi-stakeholders consultation
mechanism in Vietnam. CITP’s members include representatives of business associations in
crucial industries, experts from competent authorities such as the National Assembly, the
International Cooperation Department of the Vietnamese Ministries, Office of the Government
and Experts from Universities, etc. Their missions are to support the authorities in the
international trade agreement negotiation in providing the necessary input and domestic
consensus as well as to assist the agreement implementation. Meanwhile, they would pass the
opinions of business communities to the competent governmental bodies in regards to the
negotiating and implementing international trade commitments, informing them the progress and
the feedback.


Hence, the Vietnamese private sectors normally could contact the competent governmental
bodies via agents such as VCCI or CITP for their suggestions, their proposal of modification of
existing or on-going formulated trade policies. However, CITP only can influence on the trade
policy maker to some limited extents since their consultation with the government bodies and
enterprises is not compulsory in Vietnam.


Since January 2012, the Vietnamese Prime Minister issued Decision No.06/2012/QD-TTg on
consultation with the business community on international trade agreements setting requirements
for consultation at this stage. Who is the interested group for this multiple-stakeholders
consultation? Then the interesting question is whether they are really efficiently involved into
the consultation mechanism; which will be left for the later primary data analysis in this research.




37


According to the scope of this Decision2, it regulates the “consultation between agencies (which
are ministry, ministerial level agencies, government attached agencies or negotiation delegation
established by competent authorities to assume the prime responsibility for negotiating an
international trade agreement with one ore more than one partner) responsible for negotiation
and the Vietnamese business community in the process of preparing and negotiating international
trade agreements”. Business community which is referred in this Decision is limited within only
“Vietnamese enterprises defined under the Enterprise Law, business associations and lawful
representative agencies and organizations of these enterprises as provided by Vietnamese law”.
Dordi. C (2012) commented after the issuance of this Decision that the Vietnamese reluctant
enterprises had been supported with the “lobby instruments”.


The decision required delegations to provide “minimum” information including the Decision on
kick-start international trade negotiation/feasibility study on trade negotiation, email address and
website of the agencies being responsible for the negotiation, trade partners, deadline for
responses from the communities through e-mail and website to private sectors. The private
sectors then could directly response to the government agencies being responsible for the
international trade agreements or through Vietnam Chamber of Commerce and Industry (VCCI).
The competent agencies also have responsibilities to provide VCCI related information including
typical market opening agreements in which the trade partners had signed with the third party;
market opening agreements with third party equivalent to the on-going negotiated agreements;
time schedule for conferences, meetings with the business community if happens.


The TPP, VN-EU FTA and Vietnam-Korea FTAs were those first international agreements
subjected to the decision. Obviously, the decision had paved the crucial way of top-down
information transferring to the private sectors. This reveals the existence of multi-stakeholders
consultation as the compulsory legitimacy requirements in Vietnam.


So far, at the first glance, all the stakeholders and the governmental system have been connected
in the “mutual talk” forum. The legislative regulation has made the information available and
created opportunities for the private sectors to make use of it. It strongly enhances the
transparency of the trade policies. Perhaps after the Decision 06/2012/QD-TTg, the “room next
door consultation” does fully exist in Vietnam with the participation of the private players into
the international trade negotiation. As noted by Dordi.C (2012), there were more than 20
recommendations sent to the Government until mid of June 2012.



2
Translated version of the Decision No.06/2012/QD-TTg can be downloaded from


http://lawfirm.vn/?a=doc&id=2511




38


There are questions that whether and how much the feedbacks from the business community are
taken into account in the final decision of the international trade agreement? Those will be
reconsidered later in the statistics results and the final comments.


Upon conclusion of negotiation, the agreements are required by the Constitution to go through
National Assembly (NA) for approval. Up to now, there is no case that the international
agreement is rejected by the Vietnam’s NA. Recently, under a UNDP-sponsored projects,
Macro-Advisory Group was established to provide research-based report and information to
NA’s deputies to support them in the approval process.


Box 1: The operation of VCCI’s Advisory Committee on International Trade Policy
The VCCI’s Advisory committee on International Trade Policy was established as part of the
project “Enterprises and international trade policy” sponsored by MUTRAP. The committee is a
bridge between enterprise community and governmental negotiation agencies to facilitate the
enterprises’ consultation on policy formulation, negotiation and implementation of international
commitment (Vietnam’s WTO Centre, 2013). To achieve these objectives, the committee is
composed of representatives from both business associations and government’s ministries (on
individual capacity). The interaction between enterprises and state actors within the committee
seem to result in a success as the decision 60/QD-Ttg recognizing the role of VCCI in the
consultation process of trade policy. After this achievement, the committee is now following its 3
initiatives in lobbying decision to join the Vienna Convention on the sale of goods contract
(1980 Vienna Convention) and monitoring the participation of Vietnam in the TPP and VN-EU
FTA.


The committee has operate its website, providing the update information on the negotiation
process, impact study, survey results on the enterprises’ opinion on each issue.
In spite of initials achievements, there are still concerns on the operation of the committee:


- There is no evidence on the official provision of information from government to the
VCCI. In its various published outputs, the Committee has cited the sources as compiled from
overseas, i.e. InsideTrade.


- The committee has uploaded series of enterprises’ recommendations to government
relating to the negotiation of TPP or VN-EU FTA. These are results of the survey with either
enterprises or through other business associations. However, these papers have a tendency to be a
summary of survey results with strong recommendations rather than a scientific analysis with
balancing of different group benefits. The possible reason might be the lack of permanent
involvement of academia in producing these reports.




39


In general, the consultation mechanism in Vietnam can be summarized in Table 3. This table
proved the strong evidences that Vietnamese government has been making efforts to open the
transparence of the country’s trade policies to both public and private players.




Table 3.3: Consultation Mechanism in Vietnam
Mechanism Agents Role Composition


Inter-
department




(Inter-
ministerial)




National
Committee for
International
Economics
Cooperation
(NCIEC)




Supporting Prime Minister,
Coordinating, Ministries,
Industries, Municipal agents in
the international economics
integration
Supporting Governmental
Negotiation Delegation on
International Economic and
Trade.


Members: Vice Prime
Minister, Minister and
Deputy Minister of
Industrial and
Commerce and other
Deputy Ministers of
other ministries, Vice
Director of National
Bank, Vice Director of
the National Office
Under the direct
supervisor of the Prime
Minister, but de facto,
and belongs to Ministry
of Industry and Trade.


Office of
National
Committee on
International
Economics
Cooperation


Supporting the National
Committee on International
Economics and Cooperation


Belonging to the
Ministry of Industry and
Trade


Governmental
Negotiation
Delegation on
International
Economic and
Trade


Supporting Prime Minister,
Ministry of International Trade
And Industry for international
trade negotiation.


Leading and coordinating
Ministries, relevant government
bodies to set the strategies and
plans, formulation and
implementation for international
trade agreements.


Members: Minister of
Industry and Trade
Ministry, representatives
of departments from
other Ministries.


Under the direct
supervisor of the Prime
Minister




40




NCIEC
(Supported by
the Office of
National
Committee on
International
Economics
Cooperation)


Technical Supporting, Providing
information for the Ministry of
Industry and Trade as well as
other ministries in trade
negotiation, trade policies’
formulation and implementation.




Business-
focus
consultatio
n


Vietnam
Chamber of
Commerce and
Industry
(VCCI)


Creating forum for the meetings
between private sectors and
public sectors
Supporting public and private
sectors with trade information,
updating negotiation trends in
international trade agreements.
Acting as the third parties in the
consultation from the competent
authorities for business
community on the international
trade negotiation.
Assisting the government bodies
for updating enterprises
information database


Non-government
organization


The
Committee on
International
Trade Policies
(CITP)


Coordinating the forum for the
consultation of international trade
negotiation for business
communities
Being the connection between
competent authorities and
relevant enterprises for the
feasibility study or negotiation of
international trade agreements


Belonging to VCCI
Members:
representatives of
business associations in
crucial industries,
experts from competent
authorities such as the
National Assembly, the
International
Cooperation Department
of the Vietnamese
Ministries, Office of the
Government and
Universities




41


Vietnamese
Business
Associations


Representatives of individual
enterprises’ voice on their
proposal of modifications,
suggestions on trade polices
Providing information about
relevant international trade
agreements, trade partners, trade
negotiations…
Visame (Trade nuclei)-
Vietnamese Association of
Medium and Small Enterprises
Setting up 12 groups of export
oriented entrepreneurs in 8
provinces to pass the messages
and suggestions from small and
medium enterprises (Dordi.C,
2012)
Offering trade counseling
services to their member


(i.e Lefaso, Vinasme,
VICOFA, VINASA,
VIETFOREST ;
VITAS…)


Enterprises
Representative
s of enterprises


Debating and commenting on the
feasibility study or the negotiation
of the international trade
agreements on the time schedule
provide by competent authorities
(i.e: suggestions on strategies,
requirements for trade partners or
ideas for the negotiation process)




Multi-stake
holders


NGOs (i.e
EuroCham,
AusCham,
Academia)
(do not directly
participate,
only support
the enterprises)


Assisting, representing the
Foreign and Vietnamese
enterprises in international Trade
agreements
Collecting information, providing
information for those business
communities
Technical supports toVietnamese
government bodies in trade
policies’ making process,
assisting enterprises, business
association with lobby activities.





42


Academia
(research and
training
institutions)


Conducting research projects by
the request and funded by
governemnt.
Providing information to society
through conference and journals.


State-owned institution
Independent ínstitution
Private institutions




Source: Information is collected and summarized from the Legal documents: Decision No.182/2007/Qð-
TTg, Decision No.06/2012/QD-TTg, and websites: http://wtocenter.vn/citp, http://moit.vecita.gov.vn/


In conclusion, similar to the case of African countries studied by Kaukab. R et al (2009), the
inter-department, business-focus consultation in Vietnam are arranged separately with the multi-
stakeholders consultation. And it is obvious that non-state actors can formally react in the
process via emails and comments on the competent authorities’ websites or indirectly via the
agents like business or industry associations, VCCI or CITP. They are provided information but
are not allowed to participate in the negotiation of the international trade agreements with the
trade partners. Are these lobby instruments really efficient in improving the non-states
participation in the consultation process or enhance their influence sphere on the policy makers?
The answer would be further considered in the statistics analysis.




43


CHAPTER 4: EMPIRICAL STUDIES


4.1.Overview of the survey


4.1.1. Methodology




Apart from secondary data, the research focuses on analyzing the statistical result of primary
data collected through surveys with enterprises and interviews with governmental officials and
representatives of associations. The surveyed objects are selected randomly given their variety in
business types, scale and funding resources.


Questionnaires were designed to provide information on reasons, methods and frequency of
consultation in trade policy making. There are 3 different types of questionnaire, corresponding
to enterprises, government officials and associations. A pre-test has also been used to assure
questionnaires’ validity and accuracy. Questionnaires are attached in the Annex 1 of the report.
Due to limited resources, convenient sampling was applied. The questionnaires were posted on
www.surveymonkey.com with a separate email sent to each potential recipient.


4.1.2. Proportion of survey recipients


The research group received quite a lot of feedbacks from different stakeholders, including the
government officials, associations, and enterprises. A large number of enterprises were targeted
by the research group due to the complex nature of this type of non-state actors: Enterprises are
often the group most heavily affected by any changes in the trade policies, and often are the one
organizing the most lobbying activities all over the world. The table below reflects the
proportion of groups of non-state actors participated in the survey.




Table 4.1. The proportion of surveyed recipients
Actors By groups Number Proportion


(%)
Government
officials


Total 16 100%


MoIT 9 56%
Other ministries 7 44%


Associations Total 3 100%
Enterprises Total 226 100%




44


By
headquarters’
location


North of Vietnam 190 84%
South of Vietnam 36 16%


By state-
owned capital


With state-owned capital 48 21%
Without state-owned capital 171 78%


By Foreign
direct
investment


With foreign direct investment 57 25%
Without foreign direct investment 162 72%




The research group divided the surveyed enterprises into different groups based on the
ownership and the location of the headquarters.


4.2. Analysis and findings


4.2.1. Why do actors participate in the trade policy consultation process?


4.2.1.1. From the Government’s perspective


Table 4.2 summaries the reasons why the Vietnam’s government asks for consultation from non-
state actors in trade policy process. There are 6 possible reasons including: satisfying legal
requirement and international commitments, assuring policy transparency, gauging social
consensus, receiving real information, assuring efficient policy application and supporting
advance enterprise preparation. These six possible reasons were divided into two groups, i.e. to
satisfy legal requirement and to enhance policy quality respectively.




Table 4.2. Reasons for government to carry out consultation in trade policy process
Reasons Percentage of


agreement
To satisfy legal
requirement


To satisfy international commitment 44%
To assure policy transparency 94%


To enhance policy
quality


To create societal consensus 56%
To receive real information 56%
To assure efficient application 63%
To support beforehand preparation of
enterprises


75%


Source: Survey Results of the Research Team (2013)




45




The key finding of this study is that the involvement and participation of non-state actors in the
formulation and implementation of trade policies in Vietnam is to improve trade policy quality.
Table 4.2 shows that the second group receives more agreement than the first one. It implies that,
government officials consider non-state actors engagements as “should do” activities rather than
“forced to do”. There are some reasons for this. First, currently, policy implementation proves to
be inefficient due to the lack of social consensus and enterprises’ preparation. Second, ministries
responsible for trade policy-making and implementation faced constraints related to their
capacity and adequate information. For example, in antidumping cases, due to difference in
collecting statistic and facts, the government could not receive the real figures on export revenue
if enterprises do not cooperate and provide them with their data. It’s advisable for the
government to cooperate with non-state actors.


From the result above, it is obvious that for the government, assuring policy transparency is the
most important reason for non-state engagement (94%). The state actors recognize transparency
as a key element in the negotiation process and outcomes in Vietnam. Especially, after Viet Nam
became a WTO’s member, the requirements to enhance transparency and legitimacy in trade
policy decision-making have been more and more reflected in debates on the openness of the
multilateral negotiations.


The government officers identified supporting beforehand preparation of enterprises and assuring
efficient application as the second and the third important reasons for consultation with non-state
actors in trade policy-making (75% and 63% respectively). Besides, gauging social consensus
and receiving real information are also considered as the fourth important factors for engagement
of non-state actors (both 56%). Surprisingly, satisfying legal requirement and international
commitment was ranked the least important reason by the government (44%), implying that non-
state actors are yet to be fully accepted and appreciated as partners in trade policy–making
process even the government has issued the legal regulations allowing and encouraging non-state
actors to participate into trade negotiations.


Further interviews with governmental officials disclosed that they are all aware of the benefits of
consulting enterprises. However, in the context of globalization, the nested interest groups will
result in different, or even opposing opinions in consultation of any trade policy. Given their
limited time and capacity, they cannot solve the conflicts of interest.. So, in their views,
consultation is sometimes organized de jure to satisfy legal requirement.


4.2.1.2. From non – state actors’ perspective




46


On the other side, among three main reasons for trade policy’s involvement, non-state actors
mostly considered that the consultation would be for their own benefits because they will be
affected by the policy (73%). Some of them seemed to be aware of the existence of winner and
losers from policy. Surprisingly, 22% respondents agreed that consultation is to provide real
information to the government. It coincides with the assumption that enterprises just do what is
beneficial for them. Consequently, the information provided will likely be biased toward
business benefits rather than society’s benefits. In other words, the direct consultation from
enterprises in Vietnam will be inevitably avoided from these nested interest groups.




Table 4.3. Reasons for non-state actors to participate into trade policy process (by location)
Reasons Percentage Percentage by


location
Difference


The
North


The
South


Providing the government agencies with real
information


22% 17% 22% 0.053


Receiving adequate beneficial policy for their
own enterprises


73% 62% 44% -0.171*


For general benefits for all industries and
society


51% 43% 33% -0.098


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


For the first and the third reasons (see Table 4.3), no evidence shows that there is difference
among enterprises’ choice, including the Northern and the Southern ones and among their
ownership.


Concerning the second reason, enterprises’ opinion varies between Southern and Northern ones,
and differs among their ownership. The proportion of Northern enterprises agreeing with this
reason is significantly higher than the Southern’s (62% and 44% respectively). It is interesting as
in Vietnam, enterprises in the South are comparatively more business oriented and dynamic,
which should lead to more active participation in consultation process. The possible reasons is
that they anticipate the poorly efficient process, leading to the “just do the business” rather than
“try to change policy” attitude. In other words, they tend to accept all possibility from policy
changes.




47


Table 4.4. Reasons for non-state actors to participate into trade policy process (divided by
their ownership)




Reasons Between State and Non-
state enterprises


Between FDI and Non-FDI
enterprises


State
one


Non-
state one


Differ
ence


FDI one Non-
FDI one


Differen
ce


Providing the government
agencies with real information 25% 16% 9% 18% 17% 0.009
Receiving adequate beneficial
policy for their own enterprises 48% 70%


-


0.222* 64% 51% 0.127*
For general benefits for all
industries and society 50% 40% 0.096 43% 42% 0.011


Source: Survey Results (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


Relating to the presence of state capital among the domestic companies, the non-state enterprises
more accept this second reason than the state ones (70% and 48% respectively). It might be the
evidence that state-owned enterprises are less interested in policy consultation with the
assumption that the government should protect the benefits of their state-owned enterprises.


As for FDI and non-FDI enterprises, 64% of the FDI ones agree that trade policy consultation is
good for their own, and 51% of non-FDI companies approve for this choice (See Table 4.4). That
implies that the non-state and FDI enterprises seem more pragmatic because they feel less safe
and less protective from the government than the state ones in the economy.


Comparing the reasons from both sides, it seems to be a mismatch between the states and the
enterprises. From the state’s side, they see consultations mostly a way to improve policy
transparency, which is understood by government officials as one-way flow of information from
the state to the non-state actors. So they try to publicise the information to the public to fulfill
this one-way flow of information. From the enterprises’ perspective, consultation needs to
provide benefits to them, which cannot be satisfied with one-way communication without
government’s responses to business’s comments.


4.2.2. Who are involved in the trade policy formulation?


Among non-state actors, only associations have frequently participated in trade policy
formulation through their relations with government actors. This can be explained by the fact





that many associations’ staff and leaders are former governmental officials. Their personal
relationships have allowed them to affect trade policy,


Figures 4.1. Managers in Vietnam Industry/Bus
Source: Report on Vietnam Business/Industry Associations’ capacity, VCCI (2013), p.30




The other actors such as enterprises and academia have much less contacts. While enterprises
can indirectly involve in the process, academia actors ha
policy formulation.




Table 4.5. Actors involving in trade policy formulation in Vietnam with frequency
1 Ministries to Enterprises


Enterprises to ministries


2 Ministries to Associations


Associations to Ministries


3 Ministries to Academia


0%


10%


20%


30%


40%


50%


60%


70%


80%


Retired


government


officers


Enterprises'


Managers


either formally or informally.


iness Associations


s direct but less frequent roles in trade


67% of responded governmental officials has consulted
enterprises
29% responded enterprises has commented
trade policy
52% responded enterprises has participated in conferences
organised by government
100% of responded governmental officials has consulted
associations
100% of responded association representatives has
contacted with ministries
33% of responded governmental officials has usually
consulted academia actors
67% of responded governmental officials has
consulted individual researchers


Others


In general


Local multi-industrial associations


National industrial associations


48












on draft of


occasionally




49


4 Ministries to Governmental
institute


50% of responded governmental officials has consulted
governmental institutes


5 Enterprises to Association 44% responded enterprises has send their opinions
through associations


Source: Survey Results (2013)


In general, we see the consultation process seem to be based more on personal relationships. As
mentioned above, there are movement of people among government officials to associations (as
president of association after retired), state-owned enterprises (representatives of state capital
contribution), government research institutes. Those actors are also more active in consultation
process, creating core area of trade policy consultation in Vietnam.


As for the government, the internal consultation with other relevant ministries and within
departments of the ministries seem to be most used (3.4 point and 3.1 point at ranking scale) as
56% and 37.5% of government officials say that they always consult with other relevant
ministries and within the ministries during trade policy – making process respectively. This
result is similar to other countries, including developing and also developed countries, as the
nature of trade policy has become more and more complicated, requiring the involvement of
different departments and ministries. In addition to this internal policy consultation, all the other
actors are consulted less frequently, especially independent research/university and enterprise as
can be seen from the below table.


Table 4.6. The frequency of consultation with other partners in trade policy process
Actors Average


Other department within the ministry 3.1
Other relevant ministries 3.4
Governmental institute 2.6
Institute and university 2.3
Association 2.9
Enterprise 2.5
Individuals, experts and researchers 2.5


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%
Average level 1→2→3→4 denote for occasionally →Sometimes→ Usually → Always


Besides, the government usually pays attention to associations when they need consultation (2.9
point). Nevertheless, conforming to Hoang Van Chau (2009), further interview says that




50


association has not played its important role as enterprises’ representatives. The government also
occasionally consults with individual experts, enterprise, and academic institute (2.6, 2.5 and 2.5
point respectively). It implies that mechanism for consultation is not open to non-state actors,
especially enterprises and academia. It means that the enterprises will have few opportunities to
interact directly to the government in trade policy – making process.


Table 4.7 shows different target groups including in governmental officials, legislators as policy
makers and ministerial officers as policy negotiators for the enterprises’ advocacies




Table 4.7. The enterprises’ targets of advocacies




Targets of
advocacy




By Headquarter Between State and
Non-state enterprises


Between FDI and
Non-FDI
enterprises


Avera
ge


The
Sout
h


The
Nort
h


Differen
ce


No
n-


stat
e


Stat
e


Differen
ce


No
n-


FDI


FD
I


Differen
ce


Directly
make
suggestion
to the
Governmen
t
(governmen
tal
institutions
and
officials)


2.2 2.5 2.0 0.495* 2.6 1.9 0.710* 2.1 2.2 -0.115


Directly
make
suggestion
to the
National
Assembly
(legislators)


2.2 2.8 2.0 0.754* 2.4 2.0 0.404* 2.1 2.2 -0.093


Make
suggestion
to the


2.8 3.1 2.7 0.368 3.0 2.7 0.288 2.8 2.9 -0.093




51


Ministry
(policy
negotiator)
Make
suggestion
to other
relevant
ministries


2.8 2.9 2.7 0.168 2.8 2.7 0.075 2.7 2.7 0.034


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


Average level 1→2→3→4 denote for unnecessary →Necessity but Unimportant→
Important → Very Important level


Table 4.7 shows that enterprises all consider policy negotiator at the Ministries as the most
important target for their policy advocacy (2.8 point out of 4 at average level). Moreover,
statistical tests show that there is no significant difference by headquarter ownership on their
consideration. It implies that advocacy efforts are also targeted at lower level officials within
ministries. This could be explained for many reasons. As for the enterprises, negotiators at
ministerial level seem to have far better knowledge on the details and substances of the country’s
trade policy, and easier to get in tough. Therefore, promoting relationships with officials from
ministries could allow more space and opportunities to deliver their advocacy messages via these
state actors.


In addition, there is evidence that enterprises in the South and non-state business target at higher
levels (National Assembly) than the ones in the North and state business (ministerial officials).
Once again, the possible reason might be personal relationship as all ministries are located in
Hanoi, so the personal interaction seems to be comparatively higher. In the South, or for non-
state enterprise, it is difficult to directly discuss with lower officials at executive level, then they
see legislators at National Assembly as the necessary and important target.


4.2.3. How do actors involve in the trade policy making process in term of methods and
content of consultation?


4.2.3.1.Method of consultations


For the enterprises, there are several ways to seek to influence trade policy. These include
participation through Vietnam Chamber of Commerce and Industry (VCCI), business
associations, academic institutes & universities, public media channels, seminars & conferences,




52


and self-initiate interaction with the Government. Table 4.8 summarizes ways used by
enterprises to influence trade policy and the relative importance (average level) attached to each
alternative by enterprises.


Table 4.8. Ways of enterprise’s engagement into trade policy on participation’s methods


Reasons




By Headquarter Between State and
Non-state enterprises


Between FDI and
Non-FDI enterprises


Avera
ge


The
Sout
h


The
Nort
h


Differen
ce


Non
-


stat
e


Stat
e


Differen
ce


Non
-


FDI


FD
I


Differen
ce


Through
Vietnam
chamber
of
Commerc
e and
Industry
(VCCI)


2.5


3 2.4


0.571* 2.3 2.5 -0.222 2.4


2.6


-0.198


Through
Associatio
ns


2.6
3.0 2.6


0.432* 2.5 2.6 -0.037 2.6
2.9


-0.330


Through
academia
institutes
&
universitie
s


2.0


2.5 1.9


0.622* 2.1 2.0 0.104 2.0


2.0


0.003


Through
public
media
channels


2.7


3.0 2.6


0.409* 2.5 2.7 -0.291 2.7


2.7


0.005


Through
seminars,
conferenc
e


2.8


3.2 2.7


0.514* 2.7 2.8 -0.134 2.8


2.7


0.088


Self-
initiated 2.5 3 2.3 0.616* 2.8 2.3 0.541* 2.4 2.6 -0.210




53


interaction
with the
governme
nt


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


Average level 1→2→3→4 denote for unnecessary →Necessity but Unimportant→
Important → Very Important level


The surveyed enterprises prefer to send their opinion and participate in conferences/seminars and
public media. They rank these channels as the first and the second important ways to influence
the policy with 2.8 and 2.7 out of 4 points in average level respectively. It’s due to they think it
can help to reach the government easier and get feedback faster. Besides, the responded
enterprises consider associations as the third important approach to deliver their message and
participate into trade policy process (2.6 out of 4 points at average level).


There is difference between the Northern and the Southern enterprises’ consideration in all
policy’s involvement approaches. In each choice, the Southern companies always more agree
with the importance of each way than the Northern ones. As the business environment in the
South are more dynamic, enterprises here are also given more importance to the consultation
process in trade policy formulation.


As for the Government, in consistent with the reason, state actors use different methods of
consultation. The most frequent method is official letter sent to other ministries and association
(not for enterprises). This is problematic and cannot assure an effective understanding and result
because this method is indirect and one-way interaction. Besides, enterprises usually organize
conferences or seminars to get information from others for consultation (See Table 10), which
also is considered as the most important approach for trade policy’s involvement by the
enterprises. As a result, participation of the business community in conferences/seminars and in
associations seems to be common channels for two way communication between the State and
the business community.




Table 4.9. The government’s ways to ask for consultation from non-state actors


Methods Average


Sending official letter requesting information 2.9
Sending questionnaires requesting information 2.5
Posting questionnaire on their website 2
Organizing conference for information 2.8




54


exchange
Publicizing draft on website 2.4
Ordering research 2.2


Source: Survey Results of the Research Team (2013)
Note: Average level from 1→2→3→4 denote for necessity level of none→


occasionally→ Usually→ Always


Table 4.9 also shows that there is no direct attempt from the state to interact with the enterprises
even they consider this as necessary way. Therefore, the current methods of consultation are not
efficient enough to assure two-way communication between the Government and the enterprises
because organizing conferences/seminars still depends on the State’s willingness, so the business
is in a passive position to involve in the policy making process. Besides, the association as a
current common channel has not played an important role on behalf of their representatives to
deliver ideas and policy’s advocacy.


4.2.3.2.Content of consultation


Table 12 shows enterprises’ good understanding about trade policies. They are almost able to
evaluate the impact of trade policy. 87% of responses say that they are able to analyze the direct
effects from the trade policies to its activities. Besides, about 79% of surveyed enterprises
acknowledge that they can analyze the effects from the trade policies to related industries, which
may influence its activities. As for overall effects on trade policy, only 59% of surveyed
enterprises see their ability to evaluate the impact


Table 4.10. Enterprises’ capability about trade policies




Enterprises’
Understanding




By Headquarter Between State
and Non-state
enterprises


Between FDI
and Non-FDI
enterprises


Perce
ntage


The
Sout
h


The
Nort
h


Differen
ce


Non
-


state


Stat
e


Diff
eren


ce


No
n-


FDI


FDI Diffe
renc


e


The enterprise
only can figure
out (without
analysis) the
possible effects
from the trade
policies


64% 42% 45% -0.035 40% 48
%


-


0.08
6


46
%


48
%


-


0.01
6




55


The enterprise is
able to analyze the
direct effects from
the trade policies
to its activities


87% 39% 67% -0.279* 71% 63
%


0.07
6


65
%


61
%


0.04
0


The enterprise is
able to analyze the
effects from the
trade policies to
related industries,
which may
influence its
activities.


79% 47% 58% -0.106 58% 58
%


0.00
4


58
%


58
%


0.00
1


The enterprise is
able to analyze the
overall effects of
the trade policies.


59% 36% 42% -0.054 44% 43
%


0.00
7


43
%


39
%


0.04
6


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


Statistical tests have not disclosed any significant difference by locations as well as state/FDI
capital presence, except in the capacity for analyzing direct policy impacts between South and
North enterprises. Regarding this aspect, enterprises in the North seems to be better. It can be
explained the assumption that the North is more “academic” than the South through interacting
with academic sector, which is mostly located in the North.


Table 4.11. The enterprises’ attitude as the policy affects negatively their activities




The enterprises’
attitude




By Headquarter Between State and
Non-state
enterprises


Between FDI and
Non-FDI
enterprises


Perce
ntage


The
Sout
h


The
Nort
h


Differe
nce


Non
-


state


Sta
te


Differe
nce


No
n-


FD
I


FD
I


Differe
nce


Not follow the policy’s
regulations


2 % 0% 1.6% -0.015* 2% 1% 0.012 1% 2% -0.005


Adjust their activities
alongside to the policy 68 % 56% 49% 0.066 46%


59
%


-0.129 55
%


42
%


0.128*




56


Actively send
feedbacks to the State
bodies


37 % 19% 28% -0.089 42% 19
%


0.223*
26
%


33
%


-0.074


Actively send
feedbacks to business
associations


48 % 36% 37% -0.007 29% 38
%


-0.085 35
%


46
%


-0.104


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


Table 13 shows that enterprises’ attitude is quite positive even when the policy comes into
effective and it affects negatively their activities. While 98% of surveyed enterprises will adjust
their activities and send feedbacks for adjustment as they see the negative impact of the policy,
only 2% of them are not going to follow the policy’s regulation. It implies a positive signal for
the Government in policy implementation. However, the choice of adjusting their activities
alongside with the policy gets the highest proportion of 68% of responses. It implies that
enterprises seem to be inactive when the policy could affect their activities.


Beside the first response of adjustment their operation, 48% of surveyed enterprises at both areas
and in all types of ownership acknowledge that they will send their feedbacks to the State
agencies rather than via associations. Then, 37% of responses could actively send feedbacks to
the State bodies. The non-state enterprises tend to agree with that choice more than the state
enterprises (42% and 19% of each type of companies respectively).


We find the evidence that enterprises in the North have a comparative tendency of not to follow
regulations. In addition, there is different opinion between FDI and non-FDI companies in
adjusting their operation. The possible reason is that North location or non-FDI presence
encourages them to depend on the weak enforcement of regulations seeking opportunity to
“lobby” the revision of the policy.


4.2.4. When does the trade policy consultation process occur?




Table 4.12 shows evaluating the importance of the enterprise’s participation in formulation and
implementation of trade policy at each stage. The enterprises seem to prefer to participate into
the stage of post-approval of policy.




57


Table 4.12. The importance of the enterprise’s participation in formulation and
implementation of trade policy at each stage




Stage




By Headquarter Between State and
Non-state
enterprises


Between FDI and
Non-FDI
enterprises


Avera
ge


The
Sout
h


The
Nort
h


Differen
ce


No
n-


stat
e


Stat
e


Differen
ce


No
n-


FDI


FD
I


Differen
ce


Preparation
for
negotiating
international
agreements


2.5 3.2 2.3 0.917* 2.4 2.4 0.917 2.4 2.8 -0.423*


In the
process of
negotiation


2.5 2.8 2.4 0.386 2.3 2.4 0.386 2.4 2.9 -0.5*


At the end
of
negotiation
and
Preparing
approval of
agreements


2.4 2.5 2.3 0.237 2.3 2.3 0.237 2.3 2.7 -0.489*


Policy draft 2.9 3.2 2.7 0.506* 2.8 2.7 0.506 2.8 3.0 -0.279
Finishing
policy draft
and start to
launch the
policy


2.9 3.1 2.8 0.363* 2.9 2.8 0.363 2.8 3.0 -0.252


Policy
Implementat
ion


3.2 3.6 3.1 0.514* 3.3 3.1 0.514 3.1 3.4 -0.247


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


Average level 1→2→3→4 denote for unnecessary →Necessity but Unimportant→
Important → Very Important level




58


According to surveyed enterprises, they appreciate the stage of policy implementation for
participation as 100% of responses see this period is “important” and “very important” time (and
reach the highest point at 3.2 out of 4 at average level).


Box 2: Low perception of enterprises on the Trans-Pacific Partnership Agreement at early
stage


The Trans-Pacific Partnership Agreement (TPP) is considered as the “FTA of 21st century”. For
Vietnam, the TPP is an important FTA as it covers a wide range of issues from traditional trade
to non-traditional trade-related issues (e.g. labour or environment).


Upon receiving the invitation to the TPP in 2009, Vietnam has participated in the TPP as
associate member (observer) for 3 negotiation rounds. During that period, after that there was a
study carried by the Institute of Trade (which belongs to the MOIT) on the feasibility of
Vietnam’s joining TPP (said by Ngo Chung Khanh, 2012). Based on the study’s results, there
was supposed to have the Politburo’s decision to join the TPP. So, in November 2010, at the
APEC’s summit, Vietnam has officially announced the decision to join the TPP. So, since 2010,
Vietnam has officially be a member of this 21st century agreement. But the early stage of
deciding to join the TPP was discussed within the government sectors without evidence of
consultation with private sector.


A survey in 2011 revealed the low awareness of enterprises on the TPP, even though Vietnam
had negotiated it for 1 year. While 32.8% of respondents never heard about the TPP, 34.3% has
heard the word “TPP” but did not have any understanding, the rest of 32.8% just had a basic
knowledge (Dao Ngoc Tien, 2012).


However, a repeated survey with the same sample in 2013 revealed an improvement. At this
time, more than 60% of respondents has expressed that they received information on the TPP
over the last year, resulted in their basic knowledge. However, the main channel is mass media
(newspaper or television), rather than the activities of either government or association.




There shows no signs of significant difference by types of ownership but there exists contrast
opinion between the Northern and the Southern ones in which the business in the South agree
more with the choice than the ones in the North.


Besides, the second average level of 2.9 is stage of drafting the policy and policy launching
preparation. While the Southern enterprises are more acknowledged of the selection than the
Northern ones, the business in all types of ownership have similar opinion on the stage that they
should participate into the trade policy process.




59


On the other hand, enterprises consider the stage of preparation for agreement negotiation and in
the process of negotiation as the third “important” level for consultation ( 2.5 out of 4 points at
average level). As for the choice of negotiation preparation stage, Southern enterprises are more
agreeable with the idea than the Northern ones. The non-FDI business agrees less with the chose
than the FDI enterprises. And there is no difference between the state and non-state business.


The enterprises’ choice on period for participation into trade policy making- process does not go
along with the target of their advocacy of policy negotiators (Table 12). While the enterprises
target policy negotiators (officials in ministries) who join the preparation for policy negotiation
and in the process of negotiation in order to influence the policy, they consider the stage of post-
approval of policy as most important stage for consultation. It implies that the Vietnamese
enterprises have not captured their role in active influence of trade policy- making process.


4.2.5. What are the challenges in trade policy consultation process?


Table 4.13 shows us so many challenging barriers that prevent the enterprises from further
participating into trade policy process.


Table 4.13: Challenges preventing enterprises from further participating into
Trade policy process




The enterprises’
attitude


By Headquarter
Between State
and Non-state
enterprises


Between FDI
and Non-FDI
enterprises


Perce
ntage


The
Sout
h


The
Nort
h


Diffe
renc


e


Non
-


state


Stat
e


Diff
eren


ce


No
n-


FDI
FDI


Diffe
renc


e


Lack of essential
knowledge 36 % 11% 29%


-


0.17
8*


21%
32
%


-


0.10
7


28
%


23
%


0.05
5


Policy belong to the
Government’s concern 16 % 11% 12%


-


0.00
4


8% 16
%


-


0.07
4


14
%


7%
0.06
5


Time constraint 11% 14% 6% 0.075 4%
10
%


-


0.05
4


8% 7% 0.010


Not have trade related
information


45 % 42% 31% 0.11
1


38% 35
%


0.02
4


36
%


26
%


0.09
4


Not have channels for 46% 42% 32% 0.10 25% 39 - 35 33 0.01




60


comments 0 % 0.13
5*


% % 2


Not receive the
feedbacks from the
Government bodies on
previous comments


36% 33% 24% 0.09
1


31% 26
%


0.04
9


28
%


22
%


0.04
9


Source: Survey Results of the Research Team (2013)
Note: *, **, *** denote for significant level at 1%, 5% and 10%


According to the result shown in Table 15, the most challenge for enterprises to participate in
trade-policy making is not having channels for comments (46%). It implies that enterprises do
not know where/who/how to make suggestions and deliver their messages to influence the
policy. Further interview shows that they even never have a chance to provide the information
for trade policy making. Other responded state-owned enterprises said that many policies were
launched without asking for the enterprises’ comments in advance, and that they received late
adjustment and feedbacks after they sent responses for a long time, resulting in harmful impacts.
Besides, state-owned companies seem to suffer more from this lack of information non-state
owned enterprises. It also shows that lacking of channel for suggestion/comment is a common
weakness for all business community, and there is no priority for state-owned enterprisesin trade
policy consultation.


Moreover, enterprises consider lacking of trade related information as the second difficult barrier
preventing them from engaging in trade policy process (45% of the responses). Consequently,
the Government’s current channels for supplying the information are not effective, and
enterprises needs more trade related information.


In addition, lacking of essential knowledge as well as feedbacks from the Government bodies on
previous comments are the third challenges that enterprises face during their participation into
the trade policy making process (both get 36%). Southern enterprises admit less that they are
lack of necessary knowledge than the Northern ones, implying that they feel more confident on
their knowledge on trade policy and trade related issues. However, they all need further training
by themselves and by the Government. Besides, the enterprises are not eager to make more
suggestions because they suspect whether their opinions could be recognized by the
Government’s bodies. So, it’s advisable to make an official and compulsory channel for
information exchange between the State and enterprises in order to assure that the business
community has an official approach when they involve in the trade policy process.


The small proportion of 11 % of responses identifying barrier on time constraint shows that the
enterprises see their important role in the trade policy making- process, and that they are willing




61


to participate into the consultation mechanism. The test shows no conflict idea among enterprises
in all types of ownership and at both headquarters.


In general, enterprises’ participation in trade policy making- process in Vietnam is somehow
passive due to many reasons. Firstly, they do not have official channel or mechanism to
participate into the process, their engagement depends on the Government’s intention. If the
Government would like to ask for consultation from the enterprises, they could send official
letter to request information or organize some conferences to get the idea. Therefore, the
Government needs to legally regulate official mechanism for the enterprises to participate into
trade policy – making process from preparation for negotiation to policy implementation stage.
Secondly, enterprises are still not active in influencing the policy. They need to clearly indentify
the target of their advocacy and choice the right the moment to influence. Thirdly, the enterprises
are still lack of essential knowledge in trade related issues, so they must join training courses on
trade matters and other analysis skills. Last but not least, the communicating of policy exchange
and discussion between the State and the business community is not effective. As a result, the
Government should find out an effective two-way communication between them and enterprises
so that the Government could receive regular suggestions and comments from the enterprises and
the non-state actors in turn get feedbacks and could self-interact directly to the Government. It’s
advisable to improve the business associations’ capacity as a common and effective channel for
information exchange between the Government and the enterprises community.


Box 3: Challenges to trade policy formulation in African countries
Firstly, limited technical knowledge, financial, and human capacity are indicated as obvious
challenges to non-state actors in the countries under research. These difficulties should be the
common barriers to policy making process in developing countries which may prevent prompt
feedback from the government bodies to the non-state actors’ contribution during the
consultations (CUTS 2009).


Secondly, the most challenging obstacle for the non-state government sectors in the consultation
stage is how to balance different interests among members under the “multi-sector umbrella”.
Without clear, consistent voice, their ability of contributing to the policy making process is
limited (CUTS 2009).


Thirdly, one has to question the efficiency of long term development framework (CUTS 2009).
In the research of CUTS, all five African countries issued the so – called Vision documents to
2020, 2025 and 2030 respectively at the time of the research to sketch long term development
policies, supported by National Trade Policy, other supporting documents and sectoral strategies,
and governmental strategic programs. It is noted by CUTS that countries tend to move away
from a consistent long term strategy to achieve more medium term development results, and that




62


they do not regularly update the vision alongside with reality needs, and the implementation of
such national policies often lack efficiency.


Sources: Kaukab.R.S et al (2009, 2010) and two interviews with Kaukab.R.S et al (2010) at
CUTS Geneva Resource Centre) in December 2012 and January 2013





63


CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS


Vietnam has laid the initial legal foundation for consultation in trade policy development. As a
result, the consultation situation in the country has appeared in all 3 possible forms: inter-
ministries, business-focus and multi-stakeholder consultations.


The current consultation of trade policy in Vietnam can be divided into 3 layers, based on
relationships between the bodies. The core layer with frequent and effective consultation
includes those currently working in state sector, including government research institutes. At the
centre of this core layer is the operation of MoIT as the main ministry relating to trade policy and
NCIEC as the inter-ministries coordinating agency. However, this should not be considered as
the consultation as all the actors are government with different policy making authority.
Expanding from this core, the second layer will includes those are former governmental officials
(head of business associations) and VCCI, which has a “special” relation with government. It is a
part of business-focus consultation as it only allows indirect interaction rather than direct
between enterprises and government.




Figure 5.1. The spheres of State Actors and Non-State Actors in the trade formulation in
Vietnam




The outer layer includes enterprises and academia that can only affect trade policy indirectly.
However, in this layer, also depending on personal relationship, there are some enterprises more
involved in the trade policy consultation. Enterprises in the North with geographical proximity
and state-owned enterprises with channels of capital control and representativeness have
participated more in the consultation process. The others, such as companies in the South, FDI
and private enterprises, even though are more economic dynamic but are more passive in


Ministries


Government


al Institute


State actors


Asociation


Non-State


actors


VCCI


Academia


(1)


(2)


(3)


(4)


(5)


(6)




64


involving in trade policy making. They put high expectation on efficiency of trade policy
consultation toward their benefits.


Resulted from the motivation for participation, the consultation does not assure effective two-
way communications as it need to be. Currently, with the weak capacity in dealing with
conflicted interest groups, it seems that the government just tries to disclose information to
satisfy transparency requirement. On receiving information, preferred channel to reach out to
non-state actors of the government is through business associations, and VCCI, which already
processes the conflicted problems to some extent. From enterprises, with the expectation that the
policy will be beneficial for their own enterprises, the above accessible indirect mechanism seem
not to be satisfactory for them, so they gradually move to the outer layer of the consultation
process.


Box 4: How to address challenges in trade policy consultation in African countries
How to address challenges posed by limited technical, financial and human capacity of
non-state actors in their engagement in the policy making process


CUTS researches suggest that resources to build stakeholders’ financial and human capacity
should be assigned to the ministries responsible for trade. CUTS also mentioned in their latest
research of the issue in 2010, “Inclusiveness of Trade Policy-Making: Challenges and Possible
Responses for Better Stakeholder Participation”, that the African countries in research receive
funding support from abroad, especially from the EU. Nevertheless, the funding seems to
encourage multi-stakeholder consultative mechanisms on specific trade issues while policies
covering broader issues tend to be processed by only governmental or public-private sectors.
Hence, governments should control the fund in a way that ensures non-differential chances for
different groups of non-state actors to get themselves involve in the trade policy making process.
On the technical part, information dissemination and awareness-raising activities should be
organized by the government and all stakeholders.


How to ensure the involvement of non-state actors
Consultative mechanism should be enhanced to cover all priority trade issues and function
properly to ensure two - way information and feedback flow between government and non - state
actors. Relevant government bodies and agencies should coordinate to ensure coherent
information, procedures and resulting of the process. The same applies for different stakeholders,
as they need to find common ground to base their interests and come up with a common voice.
Only when a healthy, constructive dialogue connecting the policy makers with different
stakeholders is built could the trade policy making process be inclusive and participatory.
Nonetheless, participation of non - state actors should not be limited to purely opinion sharing.
Governments need to perform their functions in evaluating, taking into account, and




65


incorporating various stakeholders’ opinions and interests in their policy making process,
including the negotiation, drafting and implementation of such policies.
A legal mandate should be adapted in further details by how much by the government to
recognize the response, comments and proposals of non-state actors in the trade policy making
process as well as stipulate state agencies to involve non-state actors’ opinions and interests in
their policy drafting, negotiating and implementing.


How to balance different interests among members in the society
It is of great importance to improve and diversify the involvement of various stakeholders in the
policy making process. More stakeholders (e.g. representatives of consumers, small traders,
farmers, civil society associations, etc.) be identified and included in the consultative
mechanisms.
Ensuring and improving regular information flow actively to various stakeholders is also
important to create understandings of different social groups. Stakeholders should be equipped
with more awareness and regular information flow from the Ministry of Trade or other
government bodies responsible in the policy making process. When stakeholders are well aware
and fully capture the trade issues as well as their potential impacts on their business/activities,
they would then be ready to contribute responsively, actively and effectively in the policy
making process.


In recent few years, after the Decision 60/QD-TTg, the business consultation has been improved
with the legally mandatory point of consultation of VCCI’s advisory committee on international
trade policy. However, there is much improvement need to be done, including detailed and
specific regulation on consultation:


- There should be more actors to be involved as each has their own advantages that
supplementary contribute to the quality of consultation which is currently a coordinating work
between government (including governmental institute) and association (especially VCCI).
Firstly, the academia can provide research-based report and impact forecast that not only support
the policy decisions of government but also help “private loser” become more tolerant with the
policy. Secondly, the enterprises should directly interact with the government as it will motivated
them to participate further in the process as well as providing practical, update and details
information on their own operation. Lastly, other non-state actors can somehow balance the
benefits and loss of different players. But given the currently limited representative and
neutrality of business associations, besides VCCI, other foreign chambers of commerce as well
as civil social societies should be involved.


- The governments should not only post information on their website but have regular
conference/seminar with private sectors. In the conference, there will be a discussion between
state and private sectors. In the other case, rather than “posting”, government should create




66


forum for consultation in their website, which allow enterprises to received feedbacks to their
opinions within specified periods.


- Awareness and capacity of all sectors need to be enhanced. As the consultation process
should be a two-way communications, where each sides can send and receive information. So it
will depend on the aware benefits of receiving, ability to analyze information of each side. In this
aspect, efforts need to be spent on training all actors (enterprises, association and even
government) on trade policy consultation.









67


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