Vietnam Benefits from GPA Accession

Dang Huy Dong, Deputy Minister of Planning and Investment, said government procurement has not been stated in any free trade agreements to which Vietnam is a signatory. Therefore, it is essential for us to understand GPA impacts on developing countries, including Vietnam. Specifically, GPA governs all government procurements of member states. It regulates the government procurement of goods and services by the public authorities based on the principles of openness, transparency and non-discrimination. It particularly underlines overall benefits of government procurement liberalisation and specifies government procurement procedures and processes. In addition, GPA is a non-binding agreement to WTO members. This agreement opens up a plenty of opportunities to access government procurement markets of GPA member economies, especially opportunities to approach new markets, improve competitiveness and enhance the efficiency of State budget uses. GPA was negotiated in parallel with the Uruguay Round in 1994 and entered into force in 1996. GPA now has 42 members (including 27 European Union member countries).

 

In addition, according to experts, with GPA, Vietnam will have the opportunity to receive guaranteed access to government procurement markets of member countries and avoid protectionist measures, increase the value of currencies spent in individual government procurement systems of member states; and strengthen momentums for foreign investment attraction.

 

Nguyen Thanh Tu, a specialist from the Ministry of Justice, said development partners and customers of Vietnam very much expect Vietnam to sign trade agreements to open the market. Government procurement, also called public tendering or public procurement, is considered a very broad, potential market, he said. Developing countries with a wide economic opening like Vietnam will have a lot of good opportunities. According to experts, opportunities in these markets are enormous and not limited as in developed countries where the demand is saturated. Furthermore, this is an ideal opportunity for Vietnam to attract foreign competitive capital sources, access to new capital sources and advanced technologies, and open up many investment and business cooperation opportunities.

 

He pointed out that, according to international practice, the government procurement markets have achieved a certain degree of opening to trade liberalisation. However, this concept is still left undefined and not really opened in Vietnam because we have long been familiar with self-subsidised market which is locked to all outsiders. Most government procurement transactions are performed by domestic bidders and most goods are locally made. This leads to low transparency and publicity of competition amongst bidders. Even, many transactions are performed in the “give and take” fashion, which sometimes causes many unfortunate consequences. This will gradually eliminate healthy competition and market economic nature in the long run, thus causing the loss of State capital and eroding the efficiency of investment. This is also the culprit of bureaucracy and harassment of public officials.

 

In another perspective, Truong Quang Vinh, Vice Rector of Hanoi University of Law, emphasised that, in the context of globally political and economic volatility, Vietnam must be very alert to identify and assess opportunities and threats in GPA entry. While learning experience of advanced countries, Vietnam also needs to propose solutions to earn maximum benefits from the admission.

 

Dr Nguyen Thi Thu Hien, a lecturer at Hanoi University of Law, said many researchers and lawyers place high expectations on the Law on Tender, which is scheduled to come into force on July 1. The amended law has somewhat come closer to international practices and laws. The law also gives priority to domestic bidders and domestic goods in order to stimulate production. However, she noted the Government, ministries and agencies concerned need to issue decrees on the enforcement of the law soon province create a clear legal framework for public procurement.