RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/VNM/3/Rev.3/Add.1 
20 May 2005 
 (05-2058) 
Working Party on the  
Accession of Viet Nam Original:  
 
 
  
ACCESSION OF VIET NAM 
 
Domestic Support and Export Subsidies in the Agricultural Sector
 
 
Addendum  
 The following submission is being circulated at the request of the Delegation of the 
Socialist Republic of Viet Nam.  
_______________ WT/ACC/SPEC/VNM/3/Rev.3/Add.1 
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Question 1 
General Points We thank Viet Nam for the additional inform ation and responses to our questions.  They were 
very helpful.  Viet Nam has done a very good job in revising its tables and we appreciate the 
time and effort that was put into preparing this document. 
- Supporting Table DS:1 
We appreciate the explanation Viet Nam provided concerning the two different measures 
notified under structural adjustment assistance and the response to Question 1 in WT/ACC/SPEC/VNM/3/Rev.2/Add.2.  We are st ill unclear about the program that pays 
farmers to convert agricultural land into non- agricultural uses.  As we understand it, this 
program requires farmers to remove land from agric ultural production.  If this is correct, we 
would ask Viet Nam to consider moving this  program to the resource retirement category. 
Answer:
 
This program provides cash support for purchasing seeds/plant varieties and animal breeds, 
and for covering land exclamation expenses in order to help farmers to move land from 
production of inefficient and unstable crops to production of more efficient crops or animal 
husbandry. Viet Nam takes note of the Member’s proposal to adjust its notification tables by splitting support for moving land from rice cultivation to aquaculture and adding it to item (h) - resource retirement category. 
Question 2 
- Supporting Table DS:5 
We appreciate Viet Nam’s responses to our questio ns on market price support, but we still have 
some questions about these programs. 
(a) For rice, we agree that th e conversion rate between paddy and milled rice is 0.65. 
However, it is not clear where or how th ey used the conversion.  Could Viet Nam 
identify exactly which data (applied administ ered price, external reference price, and 
eligible production) that was converted from  paddy to milled basis?  Are all the data 
now on a milled basis? 
(b) For sugar, we appreciate that Viet Nam has revised its tables to only include the applied 
administered price and not border measures for the purposes of calculating market price support.  It would be helpful to know how Viet Nam converted the applied 
administered price of 240,000 Dong per ton of sugar cane into the prices listed in 
column 4.  On what basis are the prices (applied administered and external reference) 
and eligible production expressed? 
(c) In response to our question concerning market price support for other products, 
Viet Nam notes that it applied minimum pu rchasing price for cotton.  We understand 
from Viet Nam’s response to question 6 in WT/ACC/SPEC/VNM/3/Rev.2/Add.2 that 
there is a quality difference between cotton produced in Viet Nam and that, which is 
imported.  Annex 3, paragraph 9 allows for adjustments to the external reference price 
to reflect these quality differences as necessary.    WT/ACC/SPEC/VNM/3/Rev.3/Add.1 
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 We encourage Viet Nam to work with the S ecretariat and its cotton experts to determine 
if this adjustment can be made so that this market price support program may be 
notified in DS:5. 
Answer:  
For rice, the conversion rate between paddy and milled rice of 0.65 is the rate specified at the 
national level.  All the data mentioned have been converted from paddy to milled rice basis.  
The applied administered price is set by the Government.  The external reference price is the FOB export price of rice at the port of Ho Chi Minh City. 
For sugar, the conversion rate between sugar cane and sugar is calculated on the basis of actual 
production cost incurred by the sugar manufacturing plant in the same period of time.  The 
production cost for one ton of sugar includes the following: 
- The cost for purchasing sugar cane; 
- The depreciation of machinery and equipment; - Processing costs (fuel, labour, and overhead costs); - Interest rates for bank loans; 
- VAT payment;  
- Applied administered price is calculated on the basis of production cost plus an average 
profit of the whole industry;  
- External reference price is the CIF price of imported sugar at the port of Ho Chi Minh City. 
For cotton, Viet Nam has moved the market price support through applying minimum 
purchasing price for cotton from DS:7 to DS:5 (please refer to the WT/ACC/4 tables) as  
suggested.  Viet Nam highly appreciates any technical assistance from parties concerned and wishes to receive such assistance as early as possible  
Question 3 
- Supporting Table DS:7 
We appreciate that Viet Nam took our comment on board and moved this information to 
supporting table DS:7. 
We would also note that supporting table DS :7 serves as a summary table for all product-
specific support, and Viet Nam  should include any support from the previous product-specific 
support tables (DS:5-DS:6) in this table as directed. 
Answer:
 
Viet Nam has adjusted the supporting tables according to the suggestion.  As it does not have 
any programs under supporting table DS:6, the figure in the DS:6 column of supporting table DS:7 is zero. 
Question 4 
- Supporting Table DS:9 
We appreciate that Viet Nam responded to  our earlier request to remove all tax 
preferences/exemptions by removi ng the program that reduces/exempts VAT liability, including 
the agricultural land-tax exemption. WT/ACC/SPEC/VNM/3/Rev.3/Add.1 
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Answer:
 
Viet Nam would like to thank for this remark. 
Question 5 
- Supporting Table ES:1 We appreciate Viet Nam’s response to Questions 13 and 15 in 
WT/ACC/SPEC/VNM/3/Rev.2/Add.2 that it can co mmit to bind export subsidies at zero upon 
accession.  This is very constructive and a positive way forward. 
We appreciate Viet Nam’s answers to our questio ns about the programs notified in supporting 
table ES:1. 
It would be helpful if Viet Nam revised this table consistent with the guidelines of WT/ACC/4. 
In particular, we refer Viet Nam  to paragr aph 24, which notes the requirement to provide a 
detailed description of the product, including tariff line references at least at the 6-digit level. 
Also, we continue to be unclear about some of  the measures Viet Nam has listed in ES:1 and 
whether or not they meet the definition of an export subsidy as defined in Article 9.1 or the URAA.  
Perhaps it would be helpful if Viet Nam co uld provide more information (or legislation 
authorizing these programs) on how these programs operate and how they fit the definitions under Article 9.1. 
Finally, we appreciate the explanation Viet  Nam provided in WT/ACC/VNM/3/Rev.2/Add.2 
(response to Question 9) concerning the program  "export bonus upon performance."  We still 
do not understand why it has been entered as a co mmodity in supporting table ES:1.  Since it is 
not a product, it needs to be removed from the table, and the products that were subsidized 
under this program should be listed in column 1. 
Answer:
 
Viet Nam takes notes of the proposals and would accordingly have adjustments in the following 
two aspects: 
(i) Providing the HS code at 6-digit level for reference, except for canned vegetables and 
fruits where the range of products cannot be reflected by HS code (they cannot be separated from other products under the same HS code); and 
(ii) Removing the "export bonus upon performance" item from the ES table.  Detailed information concerning the product-specific export subsidies is already presented in 
the Note annexed to this supporting table. 
 
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