The Ministry of Trade on Monday July 2 announced abolishing bonuses for good performance exporters from July 1, thus the scheme to reward good exporters according to Decision No 02/2002/QD-BTM dated January 2, 2002 won’t be applied no longer. In addition, the ministry’s council in charge of considering bonuses for good exporters was dissolved at the same time.
This is a unsurprising announcement because the trade ministry for many times sent notice to export businesses because the move is carried out in line with Vietnam’s WTO commitments.
Accordingly, WTO’s regulations on subsidies mainly concerned on distinguishing allowable and unallowable subsidise methods of member countries. Allowable subsidies included supports for development studies, disadvantaged areas and environmental protection while state subsidise for export must be abolished absolutely.
Under Vietnam’s WTO commitments, Vietnam has to abolish all of state subsidies for exporting agricultural products immediately after joining the worlds largest trade organisation. Subsidises for domestic production must be maintained at 10% of total production value like WTO’s other members. However, according to the finance minister, Vietnam’s state subsidise for domestic production now is less than 10%.
Especially, all of subsidise methods in industrial production must be erased from the joining time.
State subsidies under the methods of investment preferences for export and replacing import goods, which are applied on projects built up before the joining time, will have to be cut five years after becoming an official member of WTO.
The reward policy for good exporters was launched from 1998 by the trade ministry and the reward sum had increased annually alongside the growth rate of the country’s export turnover.
In 1998, 66 good exporters received 4.685 billion dong in rewards, 106 businesses and 6.21 billion dong in 1999, 158 businesses with 10.595 billion dong in bonuses in 2000, 196 exporters and 12.744 billion dong in 2001, 222 businesses with 16.368 billion dong in 2002, 232 businesses with 19.532 billion dong in 2003 and 349 exporters rewarded 29.408 billion dong in 2004.