Doubts hover over Vietnam entry to WTO by 2005
HO CHI MINH CITY - Vietnam is backing away from a self-imposed timetable to enter the World Trade Organisation by 2005 amid doubts from experts that it can complete the many steps required in time.
The communist country that boasts southeast Asia's fastest economic growth at around seven percent a year faces risks the longer it delays because its crucial garment sector will be at a disadvantage compared with quota-free WTO members such as China, experts said.
Wanting to get into the global trade body by 2005 "was an ambitious goal", Fred Burke, managing partner of law firm Baker and McKenzie, told an Economist magazine investment conference in the commercial hub, Ho Chi Minh City.
"It's not entirely realistic. I think the likely target date is mid to late 2006," he said.
Burke's was the most public pessimistic prediction from an outside expert.
European Union chief negotiator for the WTO, Raffaele Mauro Patriccione, told a business lunch in Hanoi on Tuesday that he believed Vietnam could make it in by the end of 2005.
Hanoi itself appears to be lowering expectations, saying recently it wanted to gain entry as soon as possible, while refusing to reiterate the 2005 date.
"We've not clearly stated exactly when the membership would be," Pham Sy Chung, deputy director of the Ministry of Trade's planning and investment department, told Reuters. "We are hoping to join soon, it could be 2005 or 2006."
Trade experts said they found the possible delay worrying.
"The sooner they are in, the sooner they are quota-free," said Virginia Foote, president of the U.S.-Vietnam Trade Council. "It does make a difference."
If Vietnam does not join next year, it will not enjoy quota-free access for its garments -- unlike China. Garment quotas for members of the WTO expire at the end of this year.
Already, the prospect of Vietnam's competitive disadvantage is leading to cancelled garment orders and a slowing of exports.
Chung told the investment seminar that exports to the United States rose 8.5 percent in the first half of 2004 from a year earlier, but that could change. "There are signs of slowing down," he said of garments, Vietnam's second most valuable export.
The sector employs about two million Vietnamese in the south.
"We're already seeing orders drying up or disappearing," Burke said.
In the first six months of 2004, Vietnam exported $2 billion worth of garments, mostly to the United States, a rise of 7.8 percent from a year ago. It has projected that sales will total $4.25 billion in 2004.
By Christina Toh Pantin - Reuters - July 07, 2004.
Vietnam promises "greater efforts" to join WTO
HANOI - Vietnam has promised to make "greater efforts" to join the World Trade Organization in the wake of comments by the Geneva-based body that the communist nation could not meet its January 1, 2005 target.
The pledge was laid out in a joint statement signed on Saturday by Vietnamese Foreign Minister Nguyen Dy Nien and his Japanese counterpart Yoriko Kawaguchi following bilateral talks in Hanoi.
"The Vietnamese side pledges to make greater efforts to join the World Trade Organisation as early as possible, probably by 2005. In return, the Japanese side affirmed its unchangeable policy of strong support for Vietnam to accomplish its bid," the statement said.
Last month the WTO said the Southeast Asian nation would not be able to join the free trade body at the beginning of next year as it wished because more work still needed to be done on its economic reforms.
Hanoi in turn said the January 2005 date was not very important in itself and called on its bilateral and multilateral partners to live up to their promises to help in the process.
In their joint statement, Nien and Kawaguchi also agreed "to boost structural reforms and work together to create a more favourable environment in the interest of business, investment and trade of the two countries".
Although Japan is the third largest investor in the country, investment ties were strained in 2002 when Hanoi slashed import quotas on motorcycle parts, forcing Japanese manufacturers Honda and Yamaha to temporarily suspend production at their Vietnamese factories.
Alarm bells were set off again in Tokyo last year after the Vietnamese government announced a series of tax hikes on foreign-invested vehicle manufacturers.
The statement, which was carried in full by the state-run Vietnam News Agency, also expressed Japan's continued commitment to help Vietnam accelerate economic growth, poverty reduction and nation-building.
Japan is the biggest aid donor to the communist nation. Last December, Tokyo announced that it would maintain its 2003 level of funding for this year, pledging 91.74 billion yen (846 million dollars).
Earlier this year, however, it announced that it would link future aid to Vietnam to a series of benchmarks that include respect for human rights and its investment climate.
Agence France Presse - July 04, 2004.
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