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Vietnam Investment Review, May 13, 2002 Nation identifies hurdles to WTO membership No one denies that opportunities and challenges are facing Vietnam on its voyage to become full member of WTO. At a
recent national conference on Resolution 07 on international integration, the
ramifications of economic and the principle elements of the task ahead were
defined and clarified to representatives of 61 provinces and cities At the
meeting, Deputy Prime Minister Nguyen Manh Cam, Chairman of the National
Committee of International Integration, highlighted the benefits already seen
from the country’s drive toward to an open economy Chief
and obvious amongst these rewards were increased export earnings and foreign
direct investment Export
earning increased rapidly from $2.4 billion in 1990 up to $15.1 billion last
year with the average annual growth rate of 20% The
country has attached $42 billion in over 3,000 FDI Projects, of which about 21
billions has been disbursed. The flow of capital plays an important role in the
economy, accounting for 30% of the social investment, 35% of industrial
production value and 20% of export turnover The
international integration process, Cam highlighted, has also helped the country
gain around $20 million in Oversea Development Assistance ODA However,
“the integration process is not smooth. It will be a difficult path posing
both external and internal challenges”, Cam warned. These
obstacles included a lack of understanding and awareness of the process by
ministries and local government and absence of an effective roadmap for
integration with the region and the world, he said Private
enterprise also appeared to have only very basic awareness of integration.
Although the business environment has been improved, the country’s legal
system was not yet ready for the process, he added A
Central Economic Board report recently revealed that of enterprises which
contacted the board for information, 16% claimed to have little understanding
about the integration process and 50% lacked any information at all abut the
Bilateral Trade Agreement In the
context of global integration, raising the competitiveness of the economy as a
whole and local products are issues of prime importance Deputy
Minister of Industry Nguyen Xuan Chuan said: “Alarm bells around should be
rung whenever we examine the comparative advantages of Vietnamese goods in the
world market” In the
terms of economy, Vietnam is still rated in a group of countries with low
competitive positions, despite the considerable progress it has made in the
areas of market orientation, increasing efficiency and subsidy elimination Unfortunately
it (the economy’s rating) has continued to drop over the last three years”,
Chuan said As
rated by the Global Competitive Forum magazine, 1998, Vietnam ranked 43rd
among 59 East Asia countries in the terms of competitive edge In
1999, it slipped down to 48th position, and in 2000, to the 53rd
place. The rankings are made on the basis of criteria such as production
technology, research and development costs, quality of business environment and
access to capital markets In the
context of international integration, some sectors are still considered too
reliant on state protection by way of taxes and subsidies. The necessary
withdrawal of much of this support will pose a major challenge for a number of
industries such as the motorcycle industry, tiles and textiles and garments At the
conference, the Deputy PM discussed generalities behind the plan for
international integration. He said: “The roadmap to open our market to the
world must be taken step-by-step with rational and gradual moves” “If we are
too hasty and take step in terms of level and time which the economy can’t
absorb, the country could incur irrecoverable losses, lose a web of enterprises
and trigger a myriad of other unforeseeable outcomes”, Cam pointed out On the
other hand, stretching the integration process for too long would delay
Vietnam’s WTO accession and could generate apathy on state subsidies and
protectionism amongst enterprises FIRST STEP TO
GLOBAL INTEGRATION On the
sidelines of the International Integration Conference, VIR spoke with Deputy PM
Nguyen Manh Cam, Chairman of the National Committee of International
Integration, about what the nation must do to integrate into regional and global
trading systems The
task of international integration was set by firmly in Resolution 07 by
Politburo. How is this to be implemented? The
first step is to enhance coordination among localities, ministries and branches
on the basis if programmers masterminded by the government and certain contents
specified in Resolution 07 of the Politburo. This way, centrally managed and
locally managed enterprises can be made aware of the integration process and
better prepare themselves Currently,
Vietnam is participating in regional and intercontinental organizations. It is a
long process. For example, the country will complete membership of AFTA in 2006.
APEC membership will be completed in 2020, and, of course we are seeking WTO
accession ASAP China
took 15 years to gain accession while Russia is now in its eighth year but has
not been made a member of the trading system yet. Vietnam filed the application
letter for accession in 1995 and has undergone four negotiation rounds for
making policies clear. This has
been in order to clarify 1,500 queries regarding transparency of economic and
trade policies. Now, fundamentally,
we have completed the transparency requirements, and will go in to essential
negotiations. When do you
expect Vietnam will gain accession into WTO? WTO’s
members at first often make high demands on potential new members. However, during the process of negotiation, the two parties
may reach a sympathy and requirements maybe lowered. In working rounds with WTO and other international
organization in the next few years. Some advised
us to try for membership in 2003. But
I think we are making efforts to be
member by the end of 2004, which means before WTO’s current negotiation rounds
ends. The longer Vietnam stays out,
the higher hurdles will become to getting in. Much
depends on the capacity of the economy. The
Resolution of the Ninth Congress clarifies that the country must continue to
accelerate reform aimed at industrialization and modernization. Fruitful
results from WTO negotiations are expected to speed up the nation’s reform
process too. VIR No. 552/ May 13-19, 2002
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