CANS of baby-milk powder are piled high at a Bibo Mart maternity shop in downtown Hanoi. The shelves hold more than 20 distinct products, domestic and imported, and prices range from about $13 to $22 per kilogram. The highest prices used to be higher. But since the finance ministry introduced a price “stabilisation” law, retailers of milk powder, mostly foreign, have had to shave prices by up to a third. As America’s Congress mulls whether to approve the Trans-Pacific Partnership (TPP), an American-led trade agreement whose draft text was released in early November, it all sends a bad signal about Vietnam’s commitment to economic reform.
Vietnam is an eager member of TPP and expects to reap an economic windfall if Congress approves the pact. But it is still asking America and the European Union to drop their designation of the country as a “non-market” economy before 2018, when it is due to expire. A switch to a “market-economy” designation would help Vietnamese firms fight anti-dumping lawsuits. Vietnam has already secured market-economy status with other countries. Yet a statue of Lenin stands tall in Hanoi, and economic planners in the ruling Communist Party still have plenty of Soviet impulses. They draft five-year plans, the next of which will be hammered out at a Communist Party Congress in early 2016. And it is not just baby-formula prices they...Continue reading
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