A US envoy Monday warned Vietnam against imposing price controls, pointing to failures in market regulation elsewhere in the world that had taken decades to overcome. Foreign companies in Vietnam fear Hanoi may be about to impose price controls on a range of products including oil, cement, gas and steel, despite concerns raised by, among others, the US Chamber of Commerce.
"Where price controls have been tried in the past, they do not work and they cause major long-term distortions that last for years," said Robert Hormats, US under-secretary of state for economic, energy and agricultural affairs. "I urge the leaders of Vietnam, please look at the experience of other countries that have tried price controls and failed in the implementation of these controls," Hormats said, addressing students in Hanoi.
"We, the United States, in the 1970s made the mistake of imposing price controls... and it took us 20 years to unravel that mistake." In February the US ambassador to Vietnam Michael Michalak told Hanoi that Washington was concerned about its plans to impose price controls. Vietnam replied that its plans were in keeping with its membership of the World Trade Organisation.
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