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From Agenda to Action PREPARING for NEW TRADE AGREEMENTS MPI MINISTRY OF PLANNING & INVESTMENT Midterm Vietnam Business Forum 2014 From Agenda to Action PREPARING FOR NEW TRADE AGREEMENTS Hanoi, June 5, 2014 Disclaimer The Vietnam Business Forum (VBF) is a structured and ongoing policy dialogue between the Vietnamese Government and the local and the foreign business community for a favorable business environment that attracts private sector investment and stimulates sustainable economic growth in Vietnam. This publication was created for the Mid-term Vietnam Business Forum on June 5, 2014. The conclusions and judgments contained in this publication, as well as presentations made by businesses’ representatives at the Forum, should not be attributed to, and do not necessarily represent the views of, the VBF Consortium Board, or the VBF Secretariat, or its co-chairing institutions including Vietnam’s Ministry of Planning and Investment, the World Bank group, and IFC - a member of the World Bank group. These parties do not guarantee the accuracy of the data in this publication and the aforesaid presentations, and accept no responsibility for any consequences of their use. This publication is distributed subject to the condition that it shall not, by way of trade or otherwise, be lent, re-sold, hired out, or otherwise circulated on a commercial basis. Hanoi, June 5, 2014 TABLE OF CONTENTS AGENDA Section I: REVIEW OF INVESTMENT CLIMATE 1.1. Perceptions by Foreign & Local Business Associations/Chambers Section II: INVESTMENT & TRADE 2.1. Reports of Investment & Trade Working Group 2.2. Tax 2.2.1. Administrative procedure simplification for tax exemption under double taxation agreement 2.2.2. Report of Tax Sub – group 2.2.3. Comments on Draft Law on Special Consumption Tax (Revised) 2.3. Mining 2.3.1. Report of Mining Working Group 2.3.2. Summary of meeting on tax issues in mining on December 30, 2013 2.4. Labor 2.4.1. Report of HR Sub-group 2.4.2. Comments on Draft Circular guiding the implementation of a number of Articles of Decree No. 102/2013/ND-CP dated September 5th 2013 of the government detailing the implementation of a number of articles of the Labour Code regulating foreign nationals working in Vietnam 2.4.3. Summary of meeting on Draft Circular guiding the implementation of a number of Articles of Decree No. 102/2013/ND-CP detailing the implementation of a number of articles of the Labour Code regulating foreign nationals working in Vietnam on January 13, 2014 2.5. Enterprise Law 2.5.1. Comments on Draft Law on Enterprise (Revised) 2.6. Investment Law 2.6.1. Comments on Draft Law on Investment (Revised) 2.7. Bankruptcy Law 2.7.1. Summary of meeting on Draft Law on Bankruptcy (Revised) on December 17, 2013 2.8. Land & Property 2.8.1. Comments on the draft Law on Real Estate Business and Law on Residential Housing – Draft 2014 Section III: BANKING & CAPITAL MARKETS 3.1. Banking 3.1.1. Tentative agenda for the meeting between the State Bank of Vietnam and Banking Working Group 3.2. Capital Markets 3.2.1. Report of Capital Markets Working Group Section IV: INFRASTRUCTURE 4.1. PPP 4.1.1. Report of Infrastructure Working Group 4.1.2. Comments on the Draft Decree on PPP 4.1.3. Summary of meeting on Draft Decree on PPP (Revised) on April 4, 2014 4.2. Energy 4.2.1. Report of Energy Sub - group 4.3. Port & Shipping 4.3.1. Report of the Port & Shipping Sub-group Section V: AGRIBUSINESS 5.1. Report of Agribusiness Working Group Section VI: TOURISM 6.1. Report of Tourism Working Group Section VII: OTHER REPORTS 7.1. Report of the Automotive Working Group 7.2. Summary of the meetings on Automotive issues on February 17, 2014 Section VIII: APPENDIX 8.1. Summary of Annual VBF – December 2013 2014 MID-TERM VIETNAM BUSINESS FORUM Agenda to Action - Preparing for New Trade Agreements Time: 7:00 – 13:30, June 5, 2014 Venue: Sheraton Hotel, K5 Nghi Tam, No. 11 Xuan Dieu Street, Hanoi PROPOSED AGENDA 7:00 – 8:00 Registration Opening Remarks 8:00 – 8:05 Ministry of Planning and Investment - H.E. Minister Bui Quang Vinh Session 1: Review of Investment Climate Overview 1. International Finance Corporation – Mr. Simon Andrews, Regional Manager 2. Vietnam Business Forum Consortium – Mrs. Virginia Foote, Co-Chairman 3. Vietnam Chamber of Commerce and Industry – Mr. Vu Tien Loc, Chairman 8:05 – 9:00 4. American Chamber of Commerce in Vietnam – Mr. Marc Townsend, Chairman 5. European Chamber of Commerce in Vietnam – Mr. Tomaso Andreatta, Vice Chairman 6. Korea Chamber of Business in Vietnam – Mr. Kim Jung In, Chairman Japan Business Association in Vietnam – Mr. Yoshihisa Maruta, Chairman Remarks by Prime Minister H.E. Nguyen Tan Dung Session 2: Topics to be discussed with Government 1. Investment & Trade • Investment and Trade – Mr. Fred Burke and Mr. Tran Anh Duc, Co- heads of Investment and Trade Working Group • Tax and Customs – Mr. Fred Burke, Head of Investment and Trade Working Group, Mrs. Huong Vu, Head of Tax Sub-group, Mr. Bill Howell, Head of Mining Working Group 9:00 – 9:45 • Employment – Mr. Collin Blackwell, Head of HR Sub-group Response from the Government - Ministry of Planning and Investment - Ministry of Finance - General Department of Customs - Ministry of Labour - Invalids and Social Affairs - Vietnam General Confederation of Labour 9:45 – 10:00 Coffee Break 2. Banking and Capital Markets • Banking - Mr. Sumit Dutta, Head of Banking Working Group • Capital Markets – Mr. Kien Nguyen, Capital Markets Working Group 10:00 – 10:40 Response from the Government - The State Bank of Vietnam - State Securities Commission - Ministry of Finance - Ministry of Planning and Investment 3. Infrastructure • PPP – Mr. Tony Foster, Head of Infrastructure Working Group • Energy – Mr. John Rockhold, Energy Sub-group 10:40 – 11:10 Response from the Government - Ministry of Planning and Investment - Ministry of Industry and Trade - Ministry of Finance 4. Agribusiness – Mr. David Whitehead, Head of Agribusiness Working Group 5. Tourism – Mr. Ken Atkinson, Head of Tourism Working Group 11:10 – 11:45 Response from the Government - Ministry of Agriculture and Rural Development - Ministry of Industry and Trade - Ministry of Science & Technology - Ministry of Finance - Ministry of Culture, Sports and Tourism Closing Remarks 11:45 – 12:00 1. Ministry of Planning and Investment – H.E. Minister Bui Quang Vinh 2. World Bank – Country Director Ms. Victoria Kwakwa 3. Vietnam Business Forum Consortium – Co-Chairman Vu Tien Loc 12:00 – 13:30 VIP and General Luncheons Section I REVIEW OF INVESTMENT CLIMATE STATEMENT BY VIRGINIA B. FOOTE, CO-CHAIRMAN Vietnam Business Forum June 5, 2014 Good morning to all of you Minister Vinh, and especially to your Excellency Prime Minister Dung for coming today. You do us a great honor to attend and to address us at this important Forum in this important time. We are very grateful. I’m confident that everybody in this room today shares with great pride the remarkable progress Vietnam has made in the last 20 some years. Our hope is that through the Vietnam Business Forum with domestic and foreign business membership and 11 working groups, we have together established an ongoing constructive discussion on what additional areas need work and solutions to lead to future successes in Vietnam. We were all deeply saddened and worried by the events of mid-May and therefore the timeliness of this Forum today and your attendance is especially important and meaningful. Today we hope to highlight some issues that are raised in the aftermath of the May events and I will let our friends from Korea, Japan and Taiwan in particular address our concerns. But I did want to speak for all of us that we support Vietnam's economic growth and its role in the increasingly complicated global supply chains - we all work with, hire, and count on people and technologies from Vietnam and many nations to make business, tourism, and supply chains work. We salute the government's actions in the aftermath and are assured that Vietnam will handle compensation and other adjustments in a professional and transparent manner. A compensation commission with possible international participation but certainly with global standards could have an enormous reputational impact for Vietnam going forward. We stand ready to assist. For FDI, decisions to locate or not to locate are often made from distant headquarters looking at basic issues of stability, business friendly environments, local talent, rule of law, logistical ease, soft and hard infrastructure systems and overall costs. Vietnam is better in some of these issues than in others - but these are the issues that will ultimately affect all of our futures. Page 1 of 4 It is the VBF hope that we can focus also on where Vietnam needs to be taking steps to ensure readiness for the several trade agreements currently being negotiated. While I am deeply involved with TPP, other agreements such as the EU-FTA, RCEP and full implementation of ASEAN FTAs are also potentially huge opportunities for Vietnam's economy and people. These agreements can assist in lowering tariff barriers in areas such as market access for apparel, footwear, agriculture and other Vietnamese exports. And they call for market access in other areas such as government procurement and services while setting new standards for regulatory coherence, SOE disciplines, NCMs, workers’ rights, environmental protection and intellectual property rights. These agreements will require new laws and regulations of high standard. But some basic structures are also not yet ready. We all worry about a possible middle income trap for Vietnam - where the easy reforms have been made, while some basic building blocks of a more market based economy are not.
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