Vietnam has missed its 2005 plan to join the World Trade Organisation (WTO). However, the country is entering the final negotiation stage for its accession to the organisation. Analysis of progress made between the two Working Party meetings of April and September 2005 reveals that Working Party members are continuing to demand further concessions from the Vietnamese negotiators. If agreed to, these concessions could have potentially damaging consequences for Vietnam’s ability to safeguard the livelihoods of its poorest people.
The demands are being led by three of the six countries yet to complete bilateral negotiations with Vietnam: the United States, Australia, and New Zealand. Yet hope for a pro-development accession package is not yet entirely lost. Oxfam believes there are a number of key elements, still under negotiation, that must be retained if development is to be sealed into Vietnam’s WTO membership agreement.
Despite their acknowledgement about the progress that Vietnam is making on key systemic issues, such as the liberalisation of trading rights and the elimination of dual pricing, Working Party members are still pressuring negotiators to commit to further concessions in sectors that are essential to ensuring food and livelihood security.
According to Oxfam, there are several key issues currently under negotiation that are so essential to Vietnam’s ability to develop, that they must be safeguarded. As Vietnam appears to be entering its final stage of negotiations, it is crucial that it is not forced to relinquish some of those policies and practices that it has been using to such good effect in the fight against poverty over the past 15 years - policies which include a range of legal, institutional and economic reforms, together with the gradual liberalisation of international trade.
Vietnam is especially eager to protect its poorest farmers from increased competition in those products on which their fragile livelihoods depends. These include sugar, maize, salt and a number of animal products. Sugar and salt farmers, in particular, live and work in some of the most remote and disadvantaged areas in Vietnam. Within the terms of its accession package, Vietnam is seeking to protect some of these products by applying tariff rate quotas (TRQs). Oxfam states that members should welcome Vietnam’s efforts to bring its trade practice in line with WTO rules by switching discretionary licensing to a TRQ.
However, the revised report shows that some members, reportedly led by New Zealand and, in a marked display of double standards, the US, continue to oppose Vietnam’s proposal to use TRQs, claiming that they are ‘outmoded and distort trade.’
Vietnam continues to push for flexibility regarding its timetable to phase out export subsidies. Vietnam has revised its request from earlier in the year and is now requesting a shorter seven year phase-out period post-accession for export subsidies in the form of investment incentives. All other export subsidies will be phased out upon accession. Working Party members should grant this request without argument. Not only have WTO members agreed in the July 2004 Framework Agreement to longer phase-out periods, as yet undefined, for export subsidies for all developing countries; in another display of double standards, developed countries, including the US, have not yet come to an agreement on their own timetable to eliminate damaging agricultural export support.
Disagreement remains within the Working Party regarding the compatibility with WTO membership of Vietnam’s export management controls on rice. Vietnam eliminated rice quotas in 2001, and the flexible control mechanism its now uses is entirely compatible with Article XI 2(a) of GATT 1994 on General Elimination of Quantitative Restriction. In this respect, Vietnam is requesting a transition period until January 1, 2011 for the right for foreign-invested enterprises to export rice. Requests that Vietnam discontinue its use of this mechanism go above and beyond existing WTO rules. Vietnam should have the ability to manage its exports of rice, a product that is vital to the food security of so many Vietnamese people.
Vietnam has already agreed to a market disruption safeguard in its bilateral trade agreement (BTA) with the US, similar to the ‘textile-specific safeguard clause’ of China. In both the initial and revised draft reports, members have requested that Vietnam provide a copy of its BTA with the US to the Working Party and clarify how provisions in this agreement would be applied in relation to other members of WTO. Vietnam is already open to a continuation of textile quotas from the US post-accession, given the loose wording of the section on textiles and clothing in the revised draft report. The situation for its textile and clothing industry could be even worse, unless it firmly resists attempts to include such non-standard safeguards within the terms of its accession package. This could spell disaster for Vietnam’s blossoming textile and clothing industry, which accounts for more than 17 per cent of its total exports and is a vital source of income and employment.
Oxfam states that Vietnam should be able to use all the instruments available to other developing WTO members to further protect the vulnerable agricultural sector. These measures include a Special Safeguard Mechanism (SSM) and special products (SP), which are now under negotiation.
Oxfam analysis shows that the US and the EU are endeavouring to exclude certain developing countries from Special and Differential Treatment (SDT) under the new DOHA agreements. If the US and the EU are doing all they can to exclude existing WTO members from these provisions, it is likely that they will be even more determined to block Vietnam’s access to such flexibilities.
Lan Anh
Vietnamese
