Vai trò của quản lý nhà nước đối với thị trường tiêu dùng bán lẻ trong thời kỳ hội nhập quốc tế

Nội dung text: Vai trò của quản lý nhà nước đối với thị trường tiêu dùng bán lẻ trong thời kỳ hội nhập quốc tế

1. THE ROLES OF STATE ADMINISTRATION IN VIETNAMESE RETAIL CONSUMER MARKET IN THE INTERNATIONAL INTEGRATION PERIOD VAI TRÒ CỦA QUẢN LÝ NHÀ NƯỚC ĐỐI VỚI THỊ TRƯỜNG TIÊU DÙNG BÁN LẺ TRONG THỜI KỲ HỘI NHẬP QUỐC TẾ Assoc. Prof. Nguyen Thi Bich Loan Thuongmai University Abstract Vietnam has integrated to the world economy more intensively. This process has made wholesale and retail activities in the market become more vibrant, especially in the retail consumer market. The appearance of many foreign suppliers has created greater diversity in the market, but at the same time caused lots of threats that may affect consumers. This has called for stricter state administration on this market. The paper affirms the importance of state administration amidst the integration context, investigates the situation of Vietnam retail consumer market, on that basis suggests some solutions to raise the roles of state administration on retail market in the integration process so as to guarantee the sustainable development of the market, bring the optimal benefits to consumers and the entire society as well. Keyword: state administration roles, retail consumer market, integration period Tóm tắt Việt Nam đã và đang hội nhập kinh tế quốc tế ngày càng sâu, rộng. Quá trình đó đã làm cho hoạt động bán buôn, bán lẻ ngày càng sôi động trên thị trường, đặc biệt là thị trường bán lẻ hàng tiêu dùng. Sự xuất hiện của nhiều nhà cung cấp nước ngoài mang đến cho thị trường bán lẻ hàng tiêu dùng sự phong phú, đa dạng, song đồng thời cũng ẩn nấp nhiều nguy cơ ảnh hưởng đến người tiêu dùng, đòi hỏi Nhà nước tăng cường quản lý thị trường này. Bài viết trên cơ sở khẳng định sự cần thiết quản lý nhà nước trong thời kỳ hội nhập, nghiên cứu thực trạng thị trường bán lẻ hàng tiêu dùng ở Việt Nam, đề xuất một số ý kiến nâng cao vai trò quản lý nhà nước đối với thị trường bán lẻ hàng tiêu dùng trong thời kỳ hội nhập, đảm bảo sự phát triển bền vững của thị trường này, đem lại lợi ích tốt nhất cho người tiêu dùng và cho xã hội. Từ khóa: Vai trò quản lý nhà nước, thị trường tiêu dùng bán lẻ, thời kỳ hội nhập Introduction Vietnam is considered one of the most dynamic and attractive retail markets in Asia as well as the world. With the country’s attempts to open its market under the integration commitments (FTA, TPP, etc.) and the stronger participation of giant foreign retailers in the local market, the competitive pressure has become fiercer to Vietnamese enterprises. This has created benefits and opportunities as well as challenges and difficulties to Vietnam’s economy. 16
2. According to data from the General Statistics in 2016, the retail revenue of Vietnam market totaled VND 2, 670,500 billion (equivalent to US$ 118 billion), an increase of 10.2% from the previous year, of which revenue from food increased by 13%, household appliances by 11.4%, garments and textile by 10.6%. This indicates that the retail market in general, consumer market in particular, have been on a rise. This growth is attributed partly to the involvement of foreign suppliers in the market, which makes the goods become more diverse, various and affordable to consumers. However, the recent development of Vietnam’s retail market in general, consumer market in particular, has raised many problems which require the state administration. They are: (1) the commitments to liberalizing international trade have made the distribution systems of the consumer goods become more diverse and complicated while the administration capacity of the state can hardly meet in both human resources and administration tools; (2) intellectual property is an important content in Vietnam’s commitments to WTO accession. The agreement on Trade-related aspects of Intellectual Property rights (TRIPS) - WTO requests Vietnam to gain two significant criteria on the content protection (protection) and legal enforcement efficiency (efficiency) of the intellectual property system with goods and services, including copyrights, product and service brands, geographical indications, which consist of origins of goods, industrial designs, patents and the layout design of integrated circuits, etc. All these areas need the administration and regulations of the state; (3) protecting consumer health becomes a matter of concern to the whole society. In reality, we have not paid adequate attention to this matter, from the stages of production to distribution. In the coming time, when Vietnam has to fully implement its commitments to opening the market when joining the regional and international trade organizations such as FTA, BTA, WTO or TPP, state administration on consumer goods related to health protection must be carried out strictly and comprehensively; (4) to control and deal with fake, low-quality consumer products in Vietnam market, the state should have higher legal capacity as well as effective administration mechanism. Therefore, when Vietnam realize its commitments to opening the local market in the integration process, many problems may arise to the market in general, retail consumer market in particular, so enhancing state administration becomes an inevitable task. The roles of the state in administrating the market not only makes the market become healthier but also helps local enterprises develop their production and business activities to achieve sustainable growth. There has been lots of research, both local and international, theoretical and practical, into the roles of state administration in general, state administration on Vietnam consumer market in particular. International studies on state administration (Gamble, 1987; John Leach, 2003; Simon, 1991 cited by John Leach, 2003; Skocpol, 1985 cited by John Leach, 2003; Chang, 1994) all affirm the significant roles of the state in regulating economic activities in the market economy. The government has the functions of establishing legal framework (Lindblom, 1994; Hughes, 2003), specifically including policies and legal documents to regulate the behavior of economic entities and create a fair playground for all entities. The government 17
3. has the duties of organizing administration mechanism, supervising, controlling, adjusting and perfecting legal framework as well as its administration modes (Hughes, 2003). If research on the roles of the state serves as theoretical grounds, then studies on state administration in each particular area represent the practical application of theories on state administration on different entities, such as consumer market. Regarding this issue, there have been some studies from micro view on market development strategies (A Study on the Development Strategy for China’s Clothing industry at the After-Quota Age, 2008); or (The global textile and clothing industry post the agreement on textiles and clothing, WTO, 2004), etc. Research on state administration in consumer market remains quite limited. In Vietnam, there are quite few books, textbooks and documents on state administration in general (Đỗ Hoàng Toàn, 2008; Nguyễn Văn Hậu, 2007) or in other areas such as landing (Nguyễn Khắc Thái Sơn, 2007), post and telecommunications and information technology (Dương Hải Hà, 2007), oil and gas (Nguyễn Đăng Tuấn, 2011), garment and textile, footwear, fine arts (Nguyễn Đình Cung et. al, 2011; Nguyễn Thị Bích Loan, 2010), energy, etc. All these studies emphasize the important roles of state administration tools in creating a favorable, transparent and fair business environment to facilitate market development. These studies have laid a fundamental theoretical framework on the roles of state administration in the economy and market in general. However, there is still a lack of specific and profound studies on the roles of state administration on retail consumer market in Vietnam amidst the integration process. This paper employs the inductive approach, using in-depth qualitative research methods to explore, observe and evaluate the situation of state administration on Vietnam retail consumer market in the integration context as classified by administration contents rather than by procedures of state administration in a specific industry. Upon collecting secondary data, the paper uses the methods of analysis and comparison to analyze the situation; as with primary data, the author and her research team carried out a social survey, collected data were purified and analyzed by SPSS 18.0 software. Research and analysis results are the basis for the author to propose solutions to raise the roles of state administration in Vietnam retail consumer market in the integration period. 1. The roles of state administration in retail consumer market As the top bodies of legislature, legal enforcement and justice, the state performs the functions of state administration in the economy to ensure the growth and development of the national economy, stabilize macro-economy and execute the principles of social fairness. As such, with its special public power, the State implements its administration on all economic objects, all economic sectors and all markets in the economy. State administration, by its wide sense, is taken by all state agencies. In a narrower sense, state administration is the acts of respects and regulations characterized by the elements of organization; it is implemented on the set-forth basis to enforce the laws; it is taken mostly by state administrative agencies (or some social organizations in case they are empowered to perform state administration duties) (Uông Trung Lưu, 2005). 18
4. State administration on retail consumer market is when bodies of legislature, enforcement and justice impose administration acts on the retail consumer market to supervise the implementation of market development strategies, manage product quality and intellectual property, control and deal with counterfeit, fake and false products so as to develop the retail consumer market and guarantee the rights of consumers in the market. So, state administration in the retail consumer market can be understood as organizational acts of the state via legal documents, policies and tools to impact the local retail consumer market, at the same time drive producers, traders and consumers to take good actions in production, distribution, consumption of goods. Besides, the state also inspects, checks and supervises these actions in order to maintain the macro stability of the market. The roles of state administration in the local retail consumer market are illustrated via the following contents: Firstly, planning development strategies for the retail consumer market Planning development strategies for the retail consumer market is the process of researching the market systematically and comprehensively, analyzing elements of macro and micro environment, mapping objectives and long-term goals in the coming time, establishing strategy options to develop the retail consumer market towards creating benefits to consumers as well as the economy. Based on the views and goals of local market development, orientations and plans are proposed for each specific areas and markets so as to ensure harmonious development and close connections among localities and provinces, between spearhead goals and urgent tasks, between short-term and long- term development. Orientations and plans of retail consumer market development are built up for each locality so that the advantages of each locality can be fully exploited and match with the master plans of the national economic development at the same time. The system of solutions and policies to implement the plans include the following aspects: policies and solutions to the market; policies and solutions to investment; policies and solutions to administration on each industry; solutions to human resource development; solutions to science and technology; solutions to supplies; solutions to environment protection; solutions to finance. Secondly, state administration on consumer goods quality The main contents of state administration on consumer goods quality include: (i) Setting up and promulgating legal documents, decrees on instructing the laws on consumer goods quality, which specify the rights and obligations to production entities in controlling product quality. For instance, legal documents on technical criteria of chemical contents in the products, regulations on product packaging, labeling and guarantee, regulations on ensuring consumer health, criteria on environmental protection in production and trading process of consumer goods. (ii) Building up and administrating the implementation of policies, strategies, master plans and plans of market development in general, retail consumer market in particular to raise product quality to meet the demand of local and international markets. (iii) Informing, communicating, instructing and implementing legal regulations on controlling consumer goods quality. (iv) Organizing the system of state agencies in charge of administrating and implementing policies and laws on controlling 19
5. consumer goods quality. (v) Supervising, inspecting and controlling organizations and individuals involved in producing and trading consumer goods to control product quality. Thirdly, state administration on intellectual property in consumer goods Protecting intellectual property represents a great concern to businesses in both production and transactions since the introduction of goods brands in the 19th century. It has become a debatable issue in many sessions of the National Assembly as well as in mass media. Common topics include protecting copyrights; trademark violations and product counterfeit; patents to technological advancement; patents to industrial designs. In terms of copyrights: copyrights are often issued to the writer of an original work via a certain type of certificate/license. Intellectual property rights are often given to the original print and patterns with unique colors or the combination of elements (which can be or cannot be patented) used with products and accessories, but in most cases, the objects of patents are not the designs themselves. There exists an exception in the U.S. Intellectual Property Law that product designs can be patented “only if, and in only case, these designs are combined with elements related to photographs, graphics or sculpture which can be identified separately and can exist independently from other elements of the entire products”. The court often runs checks on each element separately. An element in the entire product is considered as existing separately (in physical form) when it can be detached from the entire product and can be sold separately and exist separately (in theoretical sense) when it contains art elements which do not contribute to the practical aspects of the product, and these elements should raise ideas separately from the practical functions of the product. In terms of patent: patents are issued to practical products. Patents for business modes can also be considered a kind of patents for consumer goods but it is not easy to accurately predict how long a patent can be maintained. Patent protection is regarded as the most costly way in intellectual property, and it often takes several years to complete the property procedures. So enterprises should question whether these patents can be used for a long time or not before considering asking for patent. For example in the U.S. the investigation procedures taken by USPTO for design patents often take more than a year, and sometimes it exceeds the lifecycle of the product itself in the context that consumer goods technology is changing rapidly. In recent time, USPTO has made remarkable efforts to improve and shorten its procedures, so an application for patent can be dealt with within 10 - 12 months, and with additional costs (for example, filling in request forms wit USPTO or applying for short procedures) the time may be shortened to 6 months. In terms of trade secret: protecting trade secrets in theory can last forever and this feature makes it different from all other objects of intellectual property rights. It can last for good as long as business entities take necessary protection measures. Local solicitors are considered very useful in protecting trade secrets as the laws on trade secrets often vary between localities. However, in the most general sense, for information to be considered trade secrets, it must not be revealed outside the enterprises, these secrets must have economic value and business entities must take measures to keep them safe. Measures to maintain trade secrets may include the use of “Non-disclosure agreements” to restrict 20
6. people from accessing this valuable information. Designers, producers and traders of consumer goods can see that protecting trade secrets is very necessary to protect the designs and production process, prevent acts of counterfeit and protect business activities of the enterprises. In terms of brands: brands are considered the most useful tools to newly-emerging designers and should be considered a priority when producers and traders of consumer goods have not yet been able to register for intellectual property or when they are considering difficulties/costs in applying for patents. The goals of a brand are to show the origin of products or services. Laws on brand protection encourage product designers to invest in their brands and sell high-quality products by ensuring the safety for these enterprises by law. Laws on brand protection also aims to prevent other enterprises from reducing customer trust and help customers to avoid mistaking product origins. Some famous trade brands can be named as CocaCola, NIKE, TOMS, H&M, or slogans and logos that they use (for example “JUST DO IT” or logo “swoosh” of NIKE). In terms of trade image: Under the laws on brands, enterprises can seek protection under “trade images” for product packages or product designs. If laws on brand protection protects elements such as trade name, logo, symbols, design features and other features of products and components, then laws on trade image protection protect packages, design details or other elements of products and components when these elements can prove their original values. Fourthly, state administration in preventing smuggling, counterfeit, fake, low quality goods and protecting consumers in the market The concepts of counterfeit products in Vietnam’s legal system has experienced development and completion in different periods of time. Most recently in 2013, the Government issued Decree No.08 on Regulations on administrative penalty to the acts of producing and trading counterfeit products. In Article 4, the Decree specifies 4 cases which are considered counterfeit, including: counterfeit in the content; counterfeit in the layout; counterfeit in the intellectual property; counterfeit in product stamps, packaging and labels. Then, the Government issued Decree No.185 on Regulations on administrative penalty to the acts of producing and trading counterfeit and banned products and protecting consumer rights. The concept of counterfeit products is stated in Item 8, Article 3, Decree No.185 as listed from points a) to h). Under Decree No.185, the concept of counterfeit garment products consists of 4 cases: (1) counterfeit in the content: products do not have utility value and functions or have utility value and functions not appropriate to product natures or names; have utility value and functions not appropriate to the registered utility value and functions; have the content quantities of main ingredients or total nutrients or other technical features of lower than 70% of the quality standards and requirements that are registered, announced or printed in product packages, etc. (2) counterfeit in the layout (counterfeit in the product labels and packages), including: products have labels and packages which use the names or addresses of other businessmen; use trade names, product names, circulation codes, product codes, bar codes or product packages of other businessmen; products have labels and packages with false information on product origins, 21
7. places of production, packaging or assembly; (3) counterfeit in the intellectual property is specified in Article 213 of intellectual property law 2005; (4) counterfeit in product stamps, packaging and labels 2. Overview of retail consumer market and state administration in Vietnam retail consumer market in recent time 2.1. Overview of retail consumer market Vietnam retail consumer market is regarded as one of the markets with the most impressive and attractive growth rate in the world. According to the data by VCCI (2016), in the 2011-2015 period, the total retail and consumption revenues of the country are always positive, the total retail revenue topped VND2,469,879 billion in 2015, accounting for 76.2% of the total retail and consumption revenue, 163% of the total retail revenue in 2011, the modern market share makes up for around 25% of the total retail with the average growth rate of 12%. It is forecast that from now to 2020, the retail trade growth rate will reach an average of 11.9%/year, market scale will reach about VND3,940 billion (equivalent to US$180 billion) by 2020, of which modern retail will represent over 45%. Table 1: Retail revenue of Vietnam Year Retail revenue (billion Proportion of retail in Increase rate over VND) total retail consumption previous year (%) 2011 1,578,179 78.7 24.1 2012 1,789,600 77.1 15.2 2013 2,009,179 76.7 12.2 2014 2,216,211 75.2 11.3 2015 2,469,879 76.2 10.6 (Source: VCCI, Conference proceedings: Utilizing Policy Space to Support Local Economic Sectors, 2016) Although Vietnam retail consumer market has gained considerable successes in recent time with growth rate increasing continuously from previous years, the level of growth tends to decline. Billion VND Growth Source: GSO VN Figure 1: Growth level of Vietnam retail revenue (Source: 22
8. The trust of consumers in Vietnam retail consumer market has decreased greatly. This comes from various reasons, of which one should be noted about the fact that many consumer goods have low quality and cannot meet consumption demand; products do not have clear origins; there are lots of counterfeit and fake products which consumers cannot distinguish, thus they suffer from loss when buying and using these products; many products do not guarantee safety and hygiene standards due to using banned chemicals or in excessive amount; the competition among retailers becomes heavier, so they use different competitive tricks and this makes it harder for consumers to make sound decisions or buy products appropriate to their demand and financial capacity, etc. A consequence of these problems is the decrease in attractiveness of Vietnam retail consumer market to foreign investors. In 2008, Vietnam was rated the most attractive retail market in the world, even higher than Hong Kong, China, Singapore or Malaysia, but from this first rank in 2008, the market fell to the 5th rank in 2009, 14th in 2010, 23rd in 2011, 28th in 2014 and eventually got out of top 30 most attractive retail market in the world in 2016. Figure 2: Trust of Vietnam consumers (the dot line) Meanwhile, a massive wave of foreign retail groups have entered Vietnam retail market, of which the following groups must be listed: 23
9. The retail network expansion by foreign companies in Vietnam despite the economic difficulties and decreasing purchasing power proved the attractiveness of Vietnam retailing market and the inevitable trend in the context of deeper economic integration in Vietnam. According to AT Kearney report, Vietnam retailing market was appealing thanks to the market scale and the number of consumers. However, the increasing number of foreign players has been the huge pressure on Vietnamese ones, especially from the competition of traditional retail forms, independently - run convenience stores such as Ha Noi Mart, Kim Thanh, Food Stuff Shop, etc., to modern retail forms such as chains of supermarkets like Metro (Germany), Big C (France), Saiyu (Japan), Dairy Farm (Hong Kong). Moreover, such large retailers as Walmart, Tesco or CarreFour also planned their entry strategies into Vietnam. The participation of additional foreign retailers provides the market with a wide variety of products with high quality, but generates a lot risks for Vietnamese companies. Without effective countermeasures, it is easy for Vietnamese retailers to lose their brands to the strong penetration of international competitors. The importance of the state administration in the retailing market has been higher than ever before. 2.2. The situation of state administration in retailing market for consumer goods in Vietnam in recent years 2.2.1. The planning of market development strategies for consumer goods Each retailing category has its own market development strategy. The author selected a case study on Vietnam textile industry as an example. The strategies for developing Vietnam textile industry by 2015, with a vision to 2020 was approved by the 24
10. Prime Minister in 2008 (QĐ-TTg 36, 2008). The development viewpoints have been consistent with emphases on domestic market development goals as follows: Developing the sector toward specialization and modernization to create a breakthrough in both output quality and quantity. Overcoming such industrial shortcomings as weak company brands, lack of attention to fashion trends, undeveloped supporting industries, inadequate input supply; Setting exportation as a goal for industrial development, expanding export markets while maximizing domestic one; Developing the sector in relation with environment protection and 7 labour transition trends from agriculture; Developing human resources in both quality and quantity towards the sustainable development of Vietnam textile industry. They were specified into various goals for each period in Master Plan of Vietnam Textile industry in 2020, with a vision to 2030 approved by Ministry of Industry and Trade in April 2014 (Ministry of Industry and Trade, Decision No. 3218 QD-BCT, 2014). Under this Master plan, 2016-2020 goals include industrial textile value growth rate of 12-13%, domestic market growth of 10-12%, 6,000 million garment items in 2020 with the localization rate of 65%. The goals for 2021-2030 are stated as 9-10% in industrial production growth, 8-9% of domestic market growth, 9,000 products in 2030 with 70% of localization rate. It can be seen that the planning of retailing network in Vietnam has not been detailed with some problems in ENT enforcement by many local agencies. Some foreign companies have freely opened their outlets near the domestic ones with strong competition. Some have used Vietnamese trade centers to expand their network without any control from the authorities. Therefore, it is essential for state administration agencies to care about in planning strategies and developing market, particularly retailing market for consumer goods. 2.2.2. State administration for quality of consumer goods With the aim to control goods quality, the State issued 1990 Ordinance on Quality of Goods (with amendments in 1999) with nearly 100 guiding documents. However, the inadequate legal system on quality of goods could not meet the requirements of controlling goods quality in the modern times. In recent years, the regulations on goods quality in Vietnam have been continuously improved in the context of deeper integration into the world and regional economies. In order to enhance the effectiveness of legal system on quality control, the State issued Law on Standards and Technical Regulations in 2006 (in effect from 01 January 2007). On 21 November 2007, the 12th National Assembly passed the Law on Product and Goods Quality (No. 05/2007/QH12), effective on 01 July 2008 in addition to a series of guiding documents such as Decree No. 132/2008/NĐ-CP on 31 December 2008 by the Government detailing the implementation of a number of articles of the law on product and goods quality; Circular No. 22/2009/TT-BKHCN on 30 September 2009 guiding the order of and procedures for registration of likely unsafe new products under the management of the Ministry of Science and Technology; Circular No. 03/2010/TT-BLĐTBXH on 19 January 2010 promulgating a list of Group 2 products and goods and guiding the order of, procedures for and contents of quality inspection of products and goods in production, etc. Moreover, there are different separated regulations 25
11. in some relevant legal documents including Law on Protection of Consumer Rights, Law on Standards and Technical Regulations, Civil Code, and Law on Commerce, etc. The issuance of Law on Quality of Products and Goods has made an important contribution to completing the legal framework for quality control towards improving locally-made products and goods so as to boost the corporate and national competitiveness in the context of trade liberalization and integration; reforming the regulating role of the State in combination with the market adjustments to guide and ensure positive influence of quality control in the economic development. Nevertheless, the Law has showed some limitations in practice. Under the Law, the consumers have rights to sue the sellers in accordance to Civil Code and are protected by laws in case of expired goods or unclear origin of goods. The sellers have the duties to compensate for the harm in health for the consumers when they intentionally sell such goods. However, it discourages consumers to “fight” against irresponsible sellers and producers as under Article 58 on Sample-taking, testing or inspection costs in the settlement of disputes over product and goods quality, complainants or initiators of lawsuits shall pay costs of sample taking, testing or inspection of product and goods quality. Over the past few years, the protection of consumer rights has become more important with the open market for both local and foreign companies, but it has yet to be thoroughly handled. There has not been a clear separation in the duties and responsibilities of state administration agencies in product quality control. The overlapping duties between agencies lead to many problems in violation treatment and harms to consumer rights. The research group conducted a survey on 52 garment and textile enterprises located in some big cities on the effectiveness of state administration on garment product quality. As a result, most of enterprises saw the task at the early stage with many gaps and no positive effect. Mean in the 5-point scale was 2.62 and mode concentrated on 2 over 5. Many enterprises pointed out some inadequacies in management ranging from insufficient legal system to implementation. The group also carried out a survey on over 200 customers at big supermarkets in Hanoi such as BigC, AEON, Vincom, etc., which sell a wide range of Vietnamese and officially - imported garment products. Customers perceived the quality of Vietnamese garment products lower than international brands (except for Chinese ones) in all factors, but price (Figure 1) 26
12. 4,5 4 3,5 3 2,5 thForeignương hiệ brandsu nước ngoài thVietnameseương hiệu Vi ệbrandst Nam 2 Kiểu dáng Giá cả Chất liệu vảiThương Nguồn gốc Mức độ an Hàng chính Designs Price Material Brands Origin Safety Original thiết kế hiệu xuất xứ toàn hãnggoods Figure 1: Consumer evaluation on quality of Vietnamese garment products compared with international brands (Note: 1 = Very low and 5 = Very high; most frequently bought products) (Source: Research results) 2.2.3. State administration on intellectual property rights for consumer goods In the national socio-economic development, intellectual property management plays a very important role. It is the tool to minimize risks in business and improve the competitiveness of the economy and retailers of consumer goods in particular. The values companies create from such intellectual properties as patents, business know-hows, copyrights, etc., have been highly priced. However, there are still some limitations in the use, employment and pricing of intellectual properties in Vietnam while they are the main factor to attract foreign investors. Therefore, the state administration agencies, enterprises and consumers have to coordinate to manage intellectual properties so as to protect operational enterprises and increase the contribution of retail sector to GDP. Only a few Vietnamese enterprises of consumer goods have applied for trademark registration (they are the distinguisher of one’s goods and services from others), especially registration for industrial designs and inventions. Many of them have not fully aware of intellectual properties as a key to improve their market competitiveness. Besides, state agencies are also slow in enacting supporting mechanisms such as pricing and commercialization of these properties. Therefore, intellectual property has not become the common sector with important contribution to enterprises and the economy. Ministry of Science and Technology for many years as the standing organization of Program 168 has positively cooperated with many international organizations to promote and raise the awareness of intellectual property rights including “World Intellectual 27
13. Property Day towards Integration” held annually. This campaign has been appreciated by local and international organizations for its impact in Vietnam. In the first 6 months of 2016, the Ministry Inspectorate received 40 denunciations from individuals and documents from the police; inspected 25 organizations and individuals violating intellectual property rights with the total penalties of 855.6 million VND. The violations of industrial properties varied from production inventions and solutions, trademark, designs, commercial name to unhealthy competition. In the context of international economic integration, intellectual property is highly appreciated as the decisive factor to the enterprise competitiveness and the economic power. The violation of intellectual property rights has become a big concern as the foreign investment into Vietnam may cause a lot of disputes. The country may find it hard to attract foreign investment in TPP participation without strong handling of these violations. 2.2.4. State administration in preventing smuggling, forged products, counterfeit goods and goods of inferior quality and protecting consumers in domestic market Nowadays, forged products, counterfeit goods and goods of inferior quality have become one of the biggest public concerns with damage to the health and budget of consumers as well as their confidence in the goods market’s transparency and the reputation of responsible producers. Regarding the prevention of forged products, the report showed that most handled cases were on wrong contents or both contents and packaging. The number of forged packaging cases was still small. In terms of consumer participation in preventing forged goods, there is a distinction between forged products (in contents) and the concept of “defect goods” used in regulations on protecting consumer rights. The 1999 Ordinance on protecting consumer rights stated the concept of forged products, in which the production and trade of forged products was prohibited. The current Law on protecting consumer rights does not contain forged products, but the central concept is “defect products”, i.e. unsafe goods for consumers with the possibility of damage to the life, health and asset of consumers. Under the recent Decree No. 185/2013/NĐ-CP providing penalties on administrative violations in commercial activities, production of, trading in counterfeit or banned goods and protection of consumer rights, the production and trading in defect goods is not stated as an administrative sanction. Article 76 only provides penalties on violation of not withdrawing defect goods. The inspection of imported goods quality has been neglected, only after receiving complaints. Therefore, it is difficult to prevent goods of inferior quality from circulating in the market. The examination as a procedure has hindered the settlement of many violation cases. It is easy to identify forged goods in the market as they are sold publicly in many places, but handling these cases are not as simple. Under the law, examination results are the compulsory condition to handle the violation cases. Many involves high costs for examination which should be prepaid by the law enforcement units and after examination the goods must be destroyed. In accordance with the law, the violators are required to pay for the examination fees, but none of them is willing to pay and it is hard to force them to. Moreover, it is necessary for the denunciations from the brand owners to examine to forged goods. However, it is sometimes impossible to examine forged goods as they are 28
14. originated from countries which do not register the quality in Vietnam or do not have the representatives in Vietnam. In addition, some companies deny their responsibilities of the forged goods as they are worried of the impact on their reputation. It is believed that the main cause of the situation is the weak coordination and limited regulations for handling violations. There are currently five administrative agencies with authorities to handle administrative sanctions on intellectual property including market management, the Inspectorate under Ministry of Science and Technology, Ministry of Culture, Sport and Tourism, economic police, people’s committees and import customs agencies. They are large in number but weak in performance. Due to the poor performance and overlapping tasks of the mentioned agencies, the forged goods are flooding the market. The current level of administrative sanctions for violators in textile and garment sector remains low compared with their gains. Thus, it is vital to adjust the sanction levels and apply tougher settlements. In addition, it is necessary to make public announcement in mass media as well as suspend their operation for a certain period on the case - by - case basis. Under Term 4, Article 26 Law on protecting consumer rights, a goods or service trader committing recidivism shall be included in the list of goods or service traders infringing upon consumer rights, which is still loose in the author’s opinion. Under Vietnam’s commitments to WTO accession and Free Trade Agreement (FTA) as well as TransPacific Partnership (TPP), import tariffs on most of the goods will be exempted 100% by 2018, imports will flood the market and foreign retailers will pour massive investments. However, the State has not applied any protectionism policies for domestic retailers. Typically, ENT regulations (economic need test) have not been specified and developed as a national ENT framework leading to different ways of ENT application in different localities. As a result, domestic retailers have not gotten any protection policies over the past years unlike the estimates of WTO negotiation group of Vietnam. From the survey, many international retailers have violated the regulations on conditional goods under Circular No. 34/2013/TT-BCT dated 24 December 2013 by Ministry of Industry and Trade. Accordingly, foreign-invested companies are banned from distributing rice, cane sugar, tobacco and cigars, but they are commonly sold in supermarkets and shopping centers of Lotte, BigC, Circle K, Metro Cash&Carry. 3. Improving state administration in retail consumer market in Vietnam in integration context On the basis of the inevitable role of state administration in retail consumer market in integration, the situation of state administration in domestic market over the past years with the forecasted opportunities and challenges to the economy, the author has made the following recommendations on improving the state administration in retail consumer market in Vietnam: Firstly, reforming state administration model towards developmental state. Under this model, the State focuses on setting the general target routes, establishing relevant framework to meet the commitments and confirm the political viewpoints in accepting 29
15. “rules” in the international market; creating necessary conditions for market entities to seek their legal benefits and contribute to the national development; fully understanding the decisive role of the market in allocating resources into relevant and efficient goals. Secondly, completing development strategy for Vietnamese consumer goods based on the aim to dominate and develop domestic market. It is necessary to build this aim on specific indicators apart from growth rate, number of products, labour, and localization rate as before. The state administration has to specify domination goal for each segment (high class, economy; city/ rural area, etc.), each category (male/ female; children/ adults; work/ leisure, etc.) according to the financial capabilities and market scale. The measurable, feasible and ambitious goals in a certain period will be the guidance for Vietnamese enterprises to strive for. Thirdly, completing state administration on quality of consumer goods. The state needs a policy on quality or a Law on quality and the system of legal documents guiding implementation. Quality law needs to draw the attention of the whole society into quality from political leaders, production managers to consumers. From this, policy planners, production managers will pay attention to reforming management, innovating technologies while consumers are more aware of their rights, which can promote the productivity and quality. Together with the policies, the system of normative legal documents also needs to be improved and supplemented. It is necessary to reform the examination of the State on goods quality to facilitate production for enterprises and ensure the control of quality. It is also a must to complete the recognition mechanisms under terms in Mutual Recognition Agreements under ILAC, APLAC, instructions by Pacific Accreditation Cooperation PAC and ISO standards. The organization and instructions for enteprises to operate and build their own production standards under ISO are very important to improve the goods quality and the quality of garment and textile under international standards. Fourthly, perfecting state administration on intellectual property for consumer goods with focus on some contents such as: perfecting legal documents on intellectual property protection appropriate for application in present context and in accordance with international practices and laws on intellectual property rights; communicating and propagating to the public about the rights and obligations of intellectual property protection; issuing heavier punishments to control and regulate the violations to intellectual property, especially strictly dealing with any violations to intellectual property to collect information to promptly prevent any actions that might lead to intellectual property violations; setting up specific quality criteria and building up technical barriers to prevent products and services (especially from Northern border gates) which violate intellectual property from entering the country. Fifthly, completing state administration to fight smuggling, counterfeit, fake, low- quality products and protect consumers in the market. The Government should have heavy punishment mechanism to prevent and stop the evils of producing and smuggling counterfeit and fake products by increasing the fines by 3 or 4 times of the current levels. It is also necessary to impose criminal punishments to bring these objects to court, at the same time forbid the imports of low-quality products or harmful products; coordinate with 30
16. other governments to clarify the origins of imported products to prevent the imports of counterfeit and fake products into the country. To authorized agencies which are assigned to control the market and fight against counterfeit and fake products, they should be empowered by giving them higher authority in imposing heavier punishments, equipping them with modern facilities in serve for investigating and checking products more rapidly, accurately and effectively. More supervision should be taken to prevent and deal with cadres with low professional ethics who are involved in illegal acts to induce and give hand to smuggling. Conclusion In Vietnam’s socio-economic development strategies by 2030, developing the market in general, retail consumer market in particular, is considered an important task for the country to successfully integrate to the world market. The State, with its functions and power, should build up, participate in, support and create favorable conditions to develop the market sustainably. That is an important and inevitable role of a constructive state in the present global environment. REFERENCES 1. Ministry of Industry and Trade, QĐ-BCT 3218, 2014 2. Chang (1994). Globalization, Economic Development and the role of the State. 3. Decree No. 142/2016/QH13 on Socio-Economic Development Plans for 2016-2020. 4. Sean Flynn (2011), Intelectual property law enforcement and the Anti-counterfeiting Trade Agreement (ACTA): ACTA's Constitutional Problem: The Treaty Is Not a Treaty, American University International Law Review, 26 (2011) 903. 5. Journal on Quality Measurements, (2002). No. 1, 2, 3, 5, 7, 8, 9. 6. VCCI, Conference proceedings: Utilizing Policy Space to Support Local Economic Sectors, 2016 7. gio 31