12
direct invested insurance enterprises (byNov2015)
and many foreign strategic investors investing
in domestic insurance enterprises, contributing
to financial improvement, governance capacity,
diversifying and increasing insurance service
products. The insurance services have been
diversified covering almost all property types of
all economic sectors and industries.
With the signed FTAs, Viet Namhas not opened
further for insurance and securities services versus
what has committed within WTO. However, the
developed partners such as EU and the US are
countries with advanced service sectors and set
high requirements for market opening as well as
principal regulations aimed at stricter binding
responsibility of member countries to foreign
investors. While the securities and insurance
market size of Viet Nam remains limitations, the
Ministry of Finance has worked out solutions and
engaged in negotiation with EU and for TPP on
the prudent principles, and with suitable pace.
Commitments on services in the new generation
FTAs have the following new features:
- On the commitment approach: earlier in the
WTO and the signed FTAs, Viet Nam committed
for service sectors conforming to GATS/WTO
approach i.e. “positive listing” (only the opened
sectors will be provided in the offer), however,
TPP requires commitment conforming to pattern
of “negative listing” (non bid sectors are deemed
to be fully opened, no reservation at all) may
leading to matters for the latter on enforcement
when the policies are not allowed going beyond
the “non-conforming measures” (NCM) each
country has reserved within TPP.
- Principle commitments: beside the principle
commitments of WTO, TPP and EU-VN FTAs
set out some new commitments, accordingly the
Parties shall:
+ Allow foreign investors to submit a claim
against the government (Investor-State Dispute
Settlement);
+ “Ratchet” mechanism binding members
when amending the reservation measures, the
amendment and standard of amendment will
automatically binding market liberalization level
of that member.
- New commitments to market opening:
+ Opening market of reinsurance branches;
lines, equivalent to 99.8% of import turnover
from EU. For the remaining tariff lines, Viet Nam
shall commit the longer-than-10-year-schedule or
reserve preference for EU based on the WTO’s
import quotas.
Commitment to export tariff reduction
For export tariff, with WTO and the signed
FTAs, Viet Nam is not obliged to eliminate export
tariff. Viet Nam committed only categories of
iron and steel, and metal scrap that was rate of
reduction after 5 year of WTO accession down to
17% and 22% effectively.
In the newgenerationFTAs, with characteristics
of negotiation with the developed countries, all
countries are supporting the idea of eliminating
export tariff because arguments that the export
tariff is a form of local production subsidy,
distorting international trade. In line, the Ministry
of Finance has actively developed options
for commitment on export tariff with EU and
TPP’s countries in order to be appropriate with
international trend at the same time assuring the
state budget revenue, specifically is as follows:
With EU, Viet Nam commits to eliminate most
of the export tariff for goods exported to EU by the
schedule of 15 years as the latest; except for some
important categories to be adopted export tariff at
a ceiling rate: (i) 546 categories will be eliminated
of export tariff by 5-7-10-12-15 year schedule,
of which including titan ore and fine ore; (ii) 57
categories that will be applied of 10-20% export
tariff rates are mineral, metal ores, pit-coal, gold
and golden jewelry.
Prudence in financial service liberalization
Commitments in insurance services and
securities of Viet Nam have been in high degree
of liberalization in WTO. The country has only
reserved a very few limits in market access
for foreign investors such as: not permitting
establishment of life insurance branches of foreign
insurance enterprises, not permitting supply of
cross border trade in services of retrocession, etc.
The accession to the WTO has created
opportunities for development of many new
products and attracted professional investors,
especially foreign investors to the stock markets.
The insurance sector has also drawn in 30 foreign
