~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

Year :      [2005]      [2004]      [2003]      [2002]      [2001]      [2000]      [1999]      [1998]      [1997]

Vietnam struggles to meet WTO deadline

HANOI - Vietnam faces an uphill battle to join the ranks of the World Trade Organisation (WTO) by its self-imposed deadline of December this year after Hanoi consistently stumbled throughout negotiations. "Extremely unlikely," is the verdict of Fred Burke, managing partner at Baker and McKenzie Vietnam, who is also an expert on Vietnam trade issues. "Not even taking into consideration the substantial differences that remain on many issues, it would be practically impossible to meet the December target date," Burke told AFP. The best that can be hoped for is an end to most bilateral negotiations by the end of 2005, Burke said.

A Vietnamese minister sounded even less optimistic. "I think it's unlikely that we can finish our bilateral talks with the US before the end of the year," said Minister of Trade Truong Dinh Tuyen on Vietnam television. "The US side is too busy to talk to us... during this time of the year, it's holiday period for the Americans. "As a result, Vietnam may join the WTO a few months later than scheduled. It's not a problem at all if Vietnam joins the WTO in early 2006," Tuyen said. Vietnam has yet to complete negotiations with seven countries including the biggest hitter, the United States. Australia and New Zealand are among the others. And in mid-September, Vietnam must hold multilateral talks with a working group on its accession in Geneva and finish the ratification process in its national legislature.

Vietnam wants wider access to Western markets as a whole, without having to cut bilateral deals. WTO entry would ensure everyone plays by the same rules. The country formally applied in 1995. Its progress has since been hindered by infighting within the communist party, the 1997 Asian financial crisis and rampant corruption. Actual negotiations started only in 2002.

The country is under no formal pressure to join the WTO by the time the global trade body holds its next ministerial meeting in Hong Kong in December but Hanoi has until now held that date as target. The WTO has made it clear this would need an end to negotiations with all partners by mid-September. Trading partners, and Vietnam itself, have some reservations on WTO accession. For the partners, a key issue is allowing foreign firms to engage in direct sales in Vietnam without having to go through local intermediaries, said Burke.

Vietnam made some commitments in its bilateral trade agreement with the United States in 2001 that were to take effect on December 10, 2004, "but they are languishing as various ministries work out enabling legislation," he said. "Vietnam's capacity to implement those commitments, or lack thereof, is something that everyone is looking at in the context of how to assess its WTO commitments." Other sticking points include tariffs for imported products, enforcement of intellectual property rights, favoritism for state-owned firms, and Vietnam's many curbs on foreign participation in service sectors ranging from telecoms to pharmaceuticals, fertilizers to entertainment and tourism. Washington demands further diminution of the state's role in the economy. Many experts stress the United States has become more cautious since the 2001 WTO accession of China which, they say, has not respected all its commitments. Vietnam has its own worries.

"The challenges confronting Vietnam in the path to WTO entry are huge. Vietnamese firms face major difficulties -- the ability to compete, management standards and productivity are still weak," said Tran Du Lich, director of the Institute of Economics in Ho Chi Minh City. Moreover, 90 percent of the firms are in the medium and small category, information systems are limited and there is a severe shortage of lawyers to defend Vietnamese firms after the country joins the WTO. "I worry much about what will happen to sectors such as services, the financial market, credit, banks and agriculture, which are lagging far behind international standards," said Lich.

There are also time restraints on the bilateral partners and the WTO working group. Russia, Ukraine and Saudi Arabia are among other countries in the queue to join the world trade body this year. While competing applicants may not trip up Vietnam's bid, the WTO officials in Geneva might be unable to cope for genuine reasons, said Tony Foster, of law firm Freshfields Bruckhaus Deringer. "They're not wilfully delaying the matters for Vietnam. It's just that there is a limited number of bureaucrats in Geneva. And they can only do a certain amount of things at one time," Foster said. On Vietnam's part, not everyone is pulling together, suggested Burke. "While there seems to be consensus at the very top that WTO accession is the best thing to continue Vietnam's successful integration strategy, there are plenty of officials and protectionist domestic interests who would like to drag their feet," he said.

Agence France Presse - September 04, 2005.