US blows the whistle on eight Vietnamese state firms to WTO

By Reuters, VnExpress   January 13, 2018 | 11:52 pm PT
Vietnam has countered the claims, saying the enterprises do not enjoy preferential treatment from the state. 

The United States has notified the World Trade Organization of eight Vietnamese firms it says should have been registered as state trading enterprises under global trading rules, a filing published by the WTO shows.

The U.S. said it was notifying the WTO on Vietnam’s behalf, a so-called “counter-notification”, because Vietnam had failed to do so.

Washington has previously taken similar steps to flag Chinese companies that it suspects are competing unfairly because of their government connections. U.S. Trade Representative Robert Lighthizer has vowed to toughen up on transparency at the WTO.

The U.S. filing named oil firm PetroVietnam and its subsidiary PV Oil, as well as fuel importer Petrolimex (PVX.HN) and jet fuel supplier Vietnam Air Petrol Company (Vinapco/SKYPEC), as firms that should be declared under WTO rules on state trading enterprises.

The list also includes the Northern Food Corporation and Southern Food Corporation, known as Vinafood I and Vinafood II, the Saigon Jewelry Company Limited and the Vietnam National Coal and Mineral Industries Group (Vinacomin).

Vietnam joined the WTO 11 years ago, following in China’s footsteps by transforming its economy on the back of cheap labor and export-led growth.

It notified the WTO of two state trading enterprises in April 2016, prompting the U.S. to ask about other companies.

Last October, Vietnam replied that most of its former state enterprises had been equitized and were operating under market economy conditions, without their previous preferential privileges.

“Shortly after Vietnam’s response, the United States independently researched Vietnam’s claims and, based on publicly-available information, has determined that there appear to be a number of entities that Vietnam failed to identify as STEs,” the U.S. filing said.

The Department of Multilateral Trade Policy under the Ministry of Industry and Trade told VnExpress that while the state holds a considerable stake in the firms named by the U.S., they operate on equal terms with other enterprises. They do not receive any preferential treatment from the state to ensure fair competition with other companies in the oil and gas import sector.

The government is also accelerating the equitization of state-owned enterprises, the department said.

Vietnam will continue to discuss this issue with the U.S., while taking measures to boost bilateral trade between the two countries, the department said.

Vietnam is divesting in hundreds of state-owned enterprises because of the need to fund a budget deficit and amid growing public debt, but progress has been slow.

It has accelerated its plans, and began this year by announcing that it would privatize almost half of Vinafood II, Vietnam’s main rice exporter, hoping to raise about $100 million, in the first quarter.

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