An open and competitive distribution market is vital to the functioning of a free-enterprise based market economy. However, governmental regulations have been identified in many countries, developed and developing countries alike, as important restraints on competition in distribution markets and trade in distribution services. For example, regulations that restrict shop opening hours and hinder access by imposing special requirements for outlet registration, sitting and/or size thresholds curb the efficiency of the distribution industry, and the competitive pressures, thus leading to lower employment growth and higher consumer prices.

In Viet Nam, the distribution sector appears to be ill regulated.  The existing regulations are partly outdated and do not fit the regulatory requirements of the post-WTO accession market opening.  While in some respect, recent regulations adopted in the context of WTO membership showed a tendency of over-regulation, Vietnamese trade and distribution sector regulators found that in the context of increased foreign competition resulting from the WTO/GATS commitments, more regulations are needed.  The Government of Viet Nam is now trying to amend the existing regulations and to draft new regulations on distribution service to make them increasingly WTO compliant and to strengthen the distribution sector, and to protect small and super-small distributors.

The technical report of SERV-4 activity under the Multilateral Trade Assistance Project (EU-Vietnam MUTRAP III) is focused on regulatory review of Viet Nam’s distribution services and recommendations for WTO compatible sector regulations such as policy making, law making and regulation, economic need test and licensing in general etc.