Vietnam-US Bilateral Talks on WTO Bid - An End for New Opportunities

Vietnam and the US began their bilateral talks about Vietnam’s accession to the World Trade Oraganisation (WTO) in Washington on May 9. Vietnamese Minister of Trade Truong Dinh Tuyen was present in the US to watch and guide the Vietnamese delegation in a talks round, which is expected to be the final as if Vietnam wants to join WTO in 2006, Vietnam will have to end its talks with the US in May.

 

An important milestone of Vietnam’s bid for WTO accession in 2006 is the 12^th talks round of the Working Group in late March, in which, the Working Group concentrated on discussing four main contents, including a review of Vietnam’s bilateral talks, legal building programmes, the draft report (DR) and the working plan for of the Working Group in the coming time.

 

Deputy Minister of Trade Luong Van Tu said that after rounds of multilateral talks, Vietnam has pledged to implement agreements within the WTO framework right from its accession. These include the Agreement on Trade-related Aspects of Intellectual Property Rights, the Agreement on Trade-related Investment Measures, the Agreement on Customs Valuation, the Agreement on Technical Barriers to Trade, the Agreement on Animal and Plant Health Inspection, the Agreement on Import and Export Licensing, the Anti-dumping Agreement and the Rules of Origin. In the services, Vietnam has opened 11 services with 92 affiliates, including such important services as business service, telecommunication and finance.

 

Vietnam has pledged to amend 99.3 per cent of its tariff lines. Vietnam’s committed average tax rate is less than 18 per cent with costs and fees cut to almost zero. What Vietnam has pledged to do is considered to be equal to or higher than WTO members or newly admitted members. At present, Vietnam has to deal with issues relating to business rights, subsidies, State-owned enterprises, investment structure and taxation policies.

 

An important commitment of Vietnam is to remove export subsidies when it joins WTO. However, Vietnam still reserves rights to farm-produce export subsidies for developing countries. With a population of 60.41 million people living in rural areas and a total area for agricultural production of 9.53 million hectares, or 0.15 hectares per person, Vietnamese agricultural production is small and fragmented. With poor quality, Vietnamese farm-produce cannot enter the regional and global markets, except for rice, coffee, pepper and cashew nuts.

 

According to Nguyen SSÆn, deputy head of the administrative office of the National Committee on International Economic Co-operation, both Vietnam and the US had shown efforts for their talks to reach the highest results. However, there is still difference between the two sides’ opinions on telecommunication and motorbikes imported from the US, special consumption tax for alcohol and beer, the stake of enterprises, non-agricultural subsidies and the reservation of self-defence in textiles and garments, as some issues of the market economy.

 

Even though the textile and garment export share of Vietnam is small in the US market with US$2 billion per year in comparison with the import value of US$70 billion of the market, the issue of self-defence of textiles and garments is not simple. Le Quoc An, chairman of the Vietnam Association of Textile and Garment, expressed his concerns on a request of applying a special mechanism for Vietnamese textiles and garments. If the request is accepted, the Vietnamese textile and garment industry will ‘die’ as the competitiveness of Vietnamese enterprises is too poor with productivity equal to between 40 and 60 per cent of other countries while lacking high quality products. Vietnamese enterprises have mainly implemented outsourcing contracts.

Vietnam is facing difficulties to total up subsidies for industries to address major issues are telecommunication and non-agricultural subsidies. Similarly, in many discussions at the enterprise or higher levels, the US side expressed their care for the opening of the telecommunication market, intellectual property rights and investment, as well as Vietnam’s commitments on adjusting laws in accordance with WTO regulations.

 

However, according to what was announced by Tuyen, the gap has been reduced an in such a good time for their relationship, the two countries may end their talks in the round, opening an opportunity for Vietnam to join the WTO in 2006.