WTO: Opportunities and Challenges to Vietnamese Businesses

3:26:20 PM | 7/8/2005

On September 3, as part of the Vietnam Products Fair 2004 for international economic integration, the Association of Young Vietnamese Entrepreneurs in association with the National Committee for International Cooperation organised a seminar called "WTO: Opportunities and Challenges" for Vietnamese businesses.

The World Trade Organisation (WTO) is a global trade organisation guiding the trade policy of 147 countries. It covers 85 per cent of commodities and 90 per cent of business activities including trade, service, investment and intellectual property. WTO membership will help Vietnam in its socio-economic development and international economic integration.

According to Mr. Luong Van Tu, Vice Minister of Trade and Secretary-General of International Economic Cooperation, Vietnam has pursued negotiations for WTO membership for the past 10 years in the interest of the Vietnamese economy and businesses. With MFN and NT status, Vietnamese commodities and services will be treated equally with those of other WTO member countries. Vietnamese businesses will have opportunities to expand their exports to markets worldwide, especially in agricultural products and textiles and garments. In addition, the transparency and predictability of government policy will attract and facilitate more investment. Foreign investors will be more confident of investing in Vietnam, while Vietnamese businesses will also be able to make investments abroad. It also offers Vietnamese businesses access to advanced technology and managerial skills from abroad.

However, Vietnamese businesses will also face several challenges. According to Mr. Tu, the biggest issue will be comprehending and implementing WTO provisions. The capacity of the workforce is still inadequate both in number and quality. Likewise, it will take time for the Vietnamese economy to fall in step with other economies. In the process of joining the WTO, Vietnam has had to reduce tariffs and non-tariff barriers, and apply equal treatment to foreign businesses in Vietnam, etc. Maintaining a foothold in the domestic market is also a challenge for Vietnamese businesses. Most Vietnamese businesses are small- and medium-sized, lack competitiveness and are dependent on the state for protection. It will be difficult for them to compete with foreign businesses in domestic as well as export markets.

WTO membership is a huge step towards international economic integration. The success of the move depends on the creativity and competitiveness of each and every Vietnamese business. To restrict difficulties and make the full use of their advantages, each Vietnamese business must develop a business strategy promoting trade and investment and using the domestic market as a foundation for expansion into foreign markets.