Fabian Demicoli

EU Tackles Market Access Barriers in Retail in Vietnam and Malaysia

Good news for retailers investing or planning to invest in Vietnam and Malaysia: in the framework of its Market Access Partnership, the European Commission will tackle your market access barriers to these countries as a priority, among a small number of priority issues for specific countries.

 

Vietnam: Economic Needs Tests

On 1st January 2009, Vietnam opened its distribution market to 100% foreign ownership as part of its WTO commitments. However, Vietnam has scheduled an Economic Needs Test (ENT) for any outlet beyond the first one. There seems to be no implementing legislation to clarify the ENT criteria, which results in discretionary interpretation by different local authorities of the criteria contained in the GATS schedule. The lack of implementing rules, in particular clarification of ENTs, is creating legal uncertainty for EU companies.

Malaysia: Discriminatory Constraints on Foreign Operators and Lack of Transparency

New guidelines regulating Distributive Trade will come into force in March. These will:

  • Continue to provide for significant limits on the possibility to open new hypermarket outlets, however adding a discriminatory element as applying only to foreign investors. Economic Needs Tests will be applied more strictly than until now.
  • Continue to put a requirement on shop owners to provide 30% of shelf space to goods of local origin, which would be in violation of the GATT/TRIMs agreement.

Also of interest to retailers could be the following market access case which the Commission identified with regard to Tunisia:

Tunisia: Alcoholic Beverages – Non-Transparent Import Procedures, Restrictions

Non-transparent import procedures (imports through a single private monopoly and lack of transparency concerning import licences) and discriminatory import duties lead to import restrictions. These practices substantially hinder the access of European alcoholic beverages to the Tunisian market and explain why EU exports of wines and spirits fall short of their potential in Tunisia.

Abigail Mamo

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