Vietnam does not violate its World Trade Organization commitments in taking measures to keep prices stable, Deputy Finance Minister Tran Xuan Ha has said.
He said it was necessary to issue Circular 122, which allows local authorities to impose stabilization measures when a company abuses its monopolistic position or when prices rise faster than production costs.
After the circular was issued in August, the Ministry of Finance also named 150 companies that had to register their prices with the authorities, including major foreign-owned dairy firms.
Ha said the goal of these measures was to protect both local consumers and the reputation of producers. He said the ministry welcomes any feedback from businesses concerning the circular.
The deputy minister's comment was made during the Vietnam Business Forum in Hanoi on Thursday where foreign business leaders accused Vietnam of violating its WTO commitments with the price control measures.
They said the price registration regulation seems to be aimed at foreign companies and that this discrimination was a WTO violation.
"We believe that price controls do not work and are counterproductive to future growth," Hank Tomlinson, chairman of the American Chamber of Commerce (AmCham), told the Vietnam Business Forum.
"We are also concerned that implementation of the new law has focused primarily on imports by foreign companies a clear violation of the letter and spirit of Vietnam's WTO commitments."
This was not the first time there have been complaints about Vietnam's price control efforts.
In September, foreign firms and the ambassadors of Australia, Canada, New Zealand, the US and the EU had raised concerns about the plan to have dairy producers disclose their production costs.
They said it would affect Vietnam's commitments as a WTO member and warned that it could also hinder foreign investment.
According to a study conducted by the Ministry of Industry and Trade's consumer protection agency prior to Circular 122, dairy prices in Vietnam were 2-3 times higher than those in regional countries.
A number of foreign companies have been accused by consumers and other market watchdogs of taking advantage of legal loopholes to foist high prices on Vietnamese consumers.