The processing of high-grade farm products from Vietnam is having a hard time catching up with the integration process and will lose its market in a long time after it cuts taxes on farm produces.
Confrontation
Mr Pham Quang Dieu, the WTO expert of the Agriculture Policies Institute under the Ministry of Agriculture and Rural Development, predicted that when a series of agricultural products like beef, pork, milk or butter will enjoy lower import taxes, the prices of US farm products into Vietnam will be lower than previously and US products will have a wider access to the Vietnamese market.
Dieu warned that the import tax cut on several agricultural products in the initial stage would have little effect on the domestic processing industry but it is forecasted that Vietnam is highly likely to lose its high-grade farm produce market in the battle with foreign products.
Ms Le Kim Dung, WTO expert of Oxfam Vietnam, said Vietnamese traditional exports like tea, cashew nuts or coffee will face challenges when the added value remains low and depends on low labour cost factor. In the long run, this factor is unstable and Vietnam is threatened to confront with more antidumping cases. Furthermore, such products as maize and sugarcane in the EU and the US enjoy great subsidies from their governments, and Vietnam will have to join an unequal battle as the production level of Vietnam on these commodities is still low.
As for animal husbandry, Ms Dung affirmed that without access to special defensive mechanism to prevent sudden import changes, imported husbandry products would affect prices in the Vietnamese market. Meanwhile, Mr Dieu said: “Crude commodity group will not be affected much but processed goods will cause great difficulties for Vietnam. The development of the processing industry is a main target and needs a long period of time to grow into more refining production with higher prices and profits.”
Seeking New Methods
Mr Pham Quang Dieu thought that the import tax cut would have impacts on the process that Vietnam turns its rudimentary processing into refining one. “The most dangerous matter is when we are late in carrying out this change, the high-grade product market will be dominated by foreign products.” However, he said, the pressures of tax cuts and subsidy reductions will generate a group of private enterprises capable of competing with foreign rivals.
The Ministry of Agriculture and Rural Development has introduced measures for the next five years to help the agricultural sector improve competitiveness, develop rural area to create jobs for farmers and implement administrative procedure reforms to increase capacity of competent agencies. Under the plan, rural enterprises and traditional trade villages will receive assistances. Competent agencies will focus on improving investment environments in rural areas and accelerating development of small and medium enterprises there.
However, Ms Dung warned that the experience of Oxfam showed that the too rapid trade liberalisation will trigger negative impacts on poverty in rural areas and widen the rich and poor gap in society if a country does not concentrate on its development level and does not have transitional phase when implementing international commitments
B.T
Vietnamese
