lity for some retailers that faced a serious barrier before. Two entities might be unhappy about the eased restriction: domestic retailers whom the ENT was designed to protect, and mall operators whose properties have been excepted from the rule and have thus been able to provide a real estate platform for some international retailers to expand in the country.  The 10 countries immediately affected by the dropping of the ENT are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand and Singapore. For the time being, the ENT stays in place for retailers hailing from countries outside of the CPTPP group, but that won’t be for long because of separate trade agreements with the EU and UK. Further details below. How the ENT works The ENT is, in its simplest terms, a trade barrier, in which the relevant provincial People’s Committee in Vietnam assesses the economic impact of a new retail store greater than 500sqm in size on its local market. Factors taken into consideration are the size of the market and the location of the proposed store; the existing supply of retail in the market; the potential impact of the proposed store on existing retailers, including those in traditional formats like street markets; the potential impact on the environment, transport infrastructure and other non-economic resources; and, how the new store would benefit the market with respect to new jobs, living standards and (last but not least) the government’s budget. While all this sounds like a sophisticated economic analysis, it isn’t exactly rocket science for someone to cook up a report that includes all those recipe ingredients and which all point to the locals not needing a store, so the ENT can easily be used as a blocking tactic. However, it isn’t 100 per cent watertight because there are several exceptions and ways around it. The ENT doesn’t apply when it is the retailer’s first store in Vietnam. This is a curious twist because it enables a foreign retailer to set up a presence but then erects a barrier to expansion, which is a reverse of the typical developing country situation where the barrier is to actually establishing the initial beach-head.  The ENT, as noted above, also doesn’t apply to stores of less than 500sqm proposed for shopping malls. This has been an important exception, since mall developers like Vincom Retail and Aeon Mall have benefited by being able to allocate space in their projects to international players, thus giving them an automatic competitive advantage. This advantage is reinforced by the fact that the ENT’s 500sqm rule can prevent those same internationals from opening stand-alone flagships in street locations. Some retailers have dodged the problem by adopting a franchising model, but this isn’t a solution for strong retail brands that want to keep control of their operations. Another end-run around the ENT is to acquire an existing retailer. For example, Thailand’s Central Retail gained access by buying the Big C hypermarket chain and subsequently rebranding it as ‘Go!’. Central also bought the electronic appliance chain Nguyen Kim. Other retailers have stuck to mall locations but in some parts of the country where there is high demand for quality space, such as Hanoi, there still isn’t enough of it to go around. The ENT is on the way out for EU retailers too Another agreement, between Vietnam and the EU (the European Union-Vietnam Free Trade Agreement, EVFTA), will see the ENT go away for EU retailers too on August 1 of next year. Following that, at the beginning of 2026, the ENT will no longer be required for UK retailers either, although the UK is currently negotiating membership in the CPTPP so things could move even more quickly for British retailers. Among a handful of other countries negotiating for membership that could have a material impact on the Vietnamese market is China. These multilateral rule relaxations are a welcoming signal to international retailers that might previously have been wary of investing resources in accessing the Vietnam market, even though many see it as one of the most attractive in Southeast Asia with its population approaching 100 million and the rise of a significant consumer class. The rule changes are part of a broader attempt on the part of the Vietnamese authorities to cut red tape, make doing business easier for foreign firms and integrate Vietnam better into the global economy. Domestic retailers are not so gung-ho With the easing of rules for the expansion of international retailers, domestic retailers are concerned about losing a significant source of protection and competitive advantage. They will be up against more powerful brands with huge financial resources that can be brought to bear to open stores and market themselves. And that’s not all: they will also in many cases have pricing and sourcing advantages.  On the whole, though, the government realises that exposure to more international retailers will help modernise the sector, create jobs and increase consumer choice. Moreover, it isn’t as though domestic retailers haven’t been warned that the heightened competition is coming: it has not been just dropped on them overnight. For their part, Vietnam’s consumers seem to be ready: the government’s General Statistics Office reports that retail sales in the country grew by 9.6 per cent in 2023. The year finished particularly strongly with increases of 10.1 per cent and 9.3 per cent in November and December, respectively.