"Vietnam still Strives, with no Set Fixed Target for WTO Accession", Says Trade Minister Truong Dinh Tuyen

Since the Hong Kong negotiation round ended late December 2005, Vietnam has not yet joined the WTO. Vietnamese enterprises face great challenges before integration. In particular, the fact that Vietnam is an agricultural country and one of Vietnamese key exports is agricultural produce is a major stumbling block. Minister of Trade Truong Dinh Tuyen had a press conference about opportunities and challenges that Vietnamese enterprises face during the process of economic integration and export strategy in the future.

 

Currently, in the negotiation process to join the WTO, rich countries always require us to open agricultural product market regardless of our conditions, a low-income country. Joining under conditions asking for faster openness to sensitive goods including many agricultural products such as rice, sugar, corn, tobacco and soybean, our agriculture production will face many difficulties because our products don’t yet compete with imported counterparts.

 

Until now, the agriculture sector has not made many products with high added value and competitiveness in its integration. So what can we export? Agriculture does not have a stable strategy on production and export.

 

Integration means the equality between domestic and export price due to low tariffs. Therefore, our goods not only need a comparative advantage and available market but also sufficient quantity to meet market demand. Needless to say, market demands have witnessed great and wide-ranging changes. So, in the absence of thorough research to define products to be made, we will fail in our home market without even regarding the competitiveness of our exports.

 

Currently, we are committed to ending agricultural subsidies under any forms. Other countries also ask to do foodstuff business in Vietnam… so how can our enterprises compete with them? For instance, the US has the advantage of agricultural products such as rice, corn, soybeans, fish and shrimp, Vietnamese corn has not yet competed with the US’ because our price is twice as high as theirs. We are planting much corn, so if we have to reduce tariffs to 0 per cent, how can domestically produce corn to compete with others? Soybean and fish are in similar difficulty to corn.

 

In order to compete with foreign rivals integrating into the world economy, we cannot maintain such a small-scale agriculture production and exportation of raw materials as is currently the situation. The development of our processing industry should be top priority, enhancing quality of agricultural products. High-quality processed agricultural products will boost export, increasing agricultural output and enhancing competitiveness.

 

Joining the WTO brings us chances to take advantage of markets, attract foreign investments, high technology and capital for production and processing industry. Countries want Vietnam to join theWTO as soon as possible, meaning that Vietnam’s WTO accession benefits them.

 

We are now in a free trade environment rather than just in negotiation. Therefore, of most importance is our competitiveness, not markets, because there are no longer the two-price policy and preferential treatments to Vietnamese enterprises. Investing in agricultural production, we should define our comparative advantages such as tea, catfish and coffee. It is essential to carry out market research, defining demand to ensure proper investments, which many enterprises have not yet paid due attention to. Regarding policy on agricultural subsidy, it is not only the task of the trade sector but a good system of policy. Two top prioritised policies are land and credit, however, in reality, these are not open to promote agricultural production and export.

According to the Orientation of National Export Strategy for the 2006-2010 period, there are 8 prioritised items at the moment including wooden furniture, electric and electronic products, plastic products, handicrafts, fruit and vegetables, almond, shipbuilding and agricultural machinery.

 

Of most importance are products for export. I think that we should conduct research to find out new products, continue expanding those which are able to occupy the market, which products will be made from now to 2010 and the impacts of international market on Vietnamese key items, because there are so many different ideas that I wish relevant agencies to further discuss to make their final conclusion. Export enterprises can make contributions to the Strategy

 

 

Taking a look at the Strategy, we can see that among Vietnamese major export items, there remain many “sensitive” items to price fluctuation in the world such as footwear and crude oil…and those which are difficult to expand production in the future. Our dependence on the world’s materials is a barrier to the target of developing “sustainable export items” and it is a major shortcoming of our export sector.

 

However, in the next 5 years, we will not able to avoid it because it takes a long time to develop a material processing industry. The said above items are only proposals that Vietnam’s export should focus on in the 2006-2010 period. In long term, we will have to develop a flexible and open export strategy. Accordingly, we will have to update and adjust annually to increase the flexibility of export items.