Should Vietnam Join WTO in 2005?

Despite some concerns, the government is determined to finish negotiations on Vietnam's WTO entry in 2005. The determination of the government to obtain WTO membership as soon as possible is based on sound grounds, since the advantages considerably outweigh the disadvantages.

Since the "Doi moi" renovation, Vietnam has gradually integrated into regional and international economy. Regarding commercial field, we have signed and implemented over 80 bilateral commercial agreements, joined regional economic cooperation forums such as ASEAN, APEC, ASEM, ASEAN- China, ASEAN- India… and negotiated to join the WTO.

As a matter of fact, due to not being a WTO official member Vietnam has faced difficulties as well as obstacles in international economic ties and commercial dispute resolutions. Becoming a WTO member will bring opportunities to Vietnam to develop the domestic economy such as attracting foreign investment, increasing export markets, expanding production to create more jobs, and raising social incomes. Vietnam’s products and services will be equally treated on the international market. Apart from that, we can grasp new science-technology, management skills, human-sources training development.

When Vietnam started negotiations for access to the WTO, the power countries strongly called for candidates not only to meet WTO’s requirements but also each member’s conditions which are so-called “WTO plus”. It is nowadays a characterized procedure of WTO accession. After finishing negotiations with 6 WTO members including the EU, Cuba, Brazil, Chile, Argentina and Singapore, in the 9^th talk (took place in the middle of November, 2004 in Geneva, Switzeland), Vietnam discussed the legal system on monitoring economic and commercial activities, subsidiary policies, plant and animal quarantine regulations, food security, intellectual property protection to conform to WTO’s requirements... According to domestic and international professors, limitations still remain in our legal system. So that Vietnam’s accession to WTO will have to enhance reforms and complete our legal system, create a reliable business environment for enterprises to obtain quick growth and sustainable development. 

It is concerned that many domestic industries and enterprises are seriously weak and vulnerable to the more intense competition of imported products after WTO accession and a delay on entry is proposed. We have to cut down import tax and other tools of protectionism, meaning a huge volume of imported goods will flood the market and be consumed at low prices. Meanwhile, many domestic industries and firms are of low competitiveness due to many reasons such as poor management, backward technology, and lack of skilled workers. But in the struggle with foreign companies to survive, domestic businesses, in particular state-owned ones will have to try their best to raise competitiveness and as a result, a great deal of progress will be made. The question is how to enhance the competitiveness of Vietnam’s economy? It is essential to set up strong national competition polices including eliminating discrimination in business, limiting monopoly and reducing unhealthy competition activities in the market.

Rapid WTO entry is necessary for our economy to expand exports, attract foreign investment and raise the competitiveness of domestic businesses and industries. The opportunities created outweigh the risks, offering our country tremendous growth potential. In the time of preparation, instead of complaining about the potential difficulties, every business and industry of low competitiveness needs to make great efforts to get insights into the global business environment and analyse the firm’s weaknesses in order to meet the challenges and promote efficiency.

Vietnam’s published simple average tariff rates under CEPT (1996-2006)

·         Source: Ministry of Finance