Q1: How should Vietnam use performance requirements nowaday?

Ans: First, we must keep in mind that a numerous number of performance requirements have
been prohibited under TRIMs, some even been prohibited by some bilateral investment treaties
(BITs) or international investment agreements (IIAs) which Vietnam is a party to. Therefore, if
we want to use performance requirements, make sure to avoid those that got banned. However,
not all performance requirements have been prohibited, meaning that if we have a creative
mind, we can still impose PRs to ensure maximum benefits can be derived from foreign
investments because we have maximum flexibility to exercise our right to regulate and can
choose to impose these kinds of performance requirements with full policy immunity. Secondly,
based on a survey by UNCTAD (2014), we found that the most essential performance
requirements used that are not prohibited by TRIMs are minimum number of jobs created,
training/skill transfer, minimum investment or export requirements,… Vietnam can try to apply
these performance requirements.
Q2: What do you think are the most important performance requirements that every countries
will use?
The survey of UNCTAD (2003) stated that the most remarkable PR which has been used
developing countries is local content requirements related to the automotive sector, local
content requirements in other industries and other types of requirements have also been used by
a number of developing countries. Therefore, it’s fair to say that local content requirements are
the most used PRs. The reason is that Governments have employed local content requirements
in the auto industry to promote backward integration and localization of production of value
added. UNCTAD (2001) lists different types of performance requirements or host country
operational measures (HCOMs). The most common performance requirements have been the
following: Local content requirements in different forms; Export performance requirements in
different forms; Indirect export performance requirements in the form of trade balancing or
dividend balancing, or foreign exchange neutrality requirements; Requirement to establish a
joint venture with domestic participation or for minimum level of domestic equity participation;
Employment performance requirements; Requirement to transfer technology, production
processes or other proprietary knowledge; and Research and development requirements.