5-Year WTO Accession: Fresh Air for Trade, Service Development

Mr Luong Van Tu, former Deputy Minister of Industry and Trade and Chief Negotiator for WTO Entry, said: At that time, Vietnam was rated sixth most attractive investment and trade environment by United Nations Conference on Trade and Development (UNCTAD). Thus, as soon as the country officially joined the WTO, it quickly attracted a large amount of foreign investment capital.

 

Vietnam attracted US$10 billion of FDI capital in 2006 but the value jumped to US$21.3 billion in 2007 when Vietnam became a full member of the WTO. The amount was US$64 billion in 2008, US$23 billion in 2009, US$18 billion in 2010 and US$15 billion in 2011. Exports also leaped to US$48 billion in 2007, US$62 billion in 2008, US$57 billion in 2009, US$72 billion in 2010 and US$96 billion in 2011. In 2008 when the world was hurt by the worst crisis in 70 years, Vietnam was among 20 countries with a positive growth.

 

However, we have to admit our weaknesses caused by our haste to achieve high growth. Even, credit growth reached 52 percent a year, leading to unfocused and inefficient investment and inflationary escalation. Vietnam has many things to do, with one of the most important tasks being the construction and completion of technical barriers suitable to international commitments to protect the domestic market and production. It also needs to build long-term integrated development strategies for key economic sectors and take advantage of advanced technologies to quickly drive the country out of the status of backwardness and escape the middle-income trap.

 

With a more positive stance, Dr Dinh Thi My Loan, General Secretary of the Vietnam Retailers Association, said: Before Vietnam opened its retail and distribution markets under its commitments to the WTO, many feared that global retailers and distributors with powerful financial capacity and profound experience will flood into Vietnam and collapse the traditional retail channel.

 

But, after 5 years entering the WTO, we have a breath of fresh air is changing the face of Vietnamese retail industry, bringing more choices to consumers and generating a driving force for Vietnamese retailers to move forward and prepare competition against foreigners. Although foreign investors have injected a large sum of money into the Vietnamese retail and wholesale sectors, domestic companies manage to compete and grow up. In 2010, foreign investors registered 177 retail projects worth US$462 million.

 

Every country now wants to develop knowledge-driven services like software development, information processing, research and development, technique, marketing, business management and human resource development. At present, these services annually grow 10 percent in developed countries.

 

Without enough capacity, Vietnam is facing the risk of losing service market into regional rivals. Thus, according to delegates attending the conference, Vietnamese service sector needs to achieve average annual growth of 9.5 percent from 2010 to 2015.

 

To do this, Vietnam needs to focus on developing potential areas like tourism, insurance, finance, banking, auditing and labour export. It necessarily increases the proportion of services in the GDP and enhance the competitiveness of domestic services. It also needs to export more services. Finally, in addition to opening the service market as internationally committed, it needs to attract more investment into service sectors.