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WTO gives green light to "rising star" Vietnam

GENEVA - The World Trade Organisation formally approved communist Vietnam's membership of the global free trade system, opening up a new era of international commerce and investment for one of East Asia's fastest growing economies.

"It's the 50th trading country on the planet," WTO Director General Lamy said, predicting that the burgeoning southeast Asian economy could be "one of the rising stars of world trade." The decision by the WTO's governing General Council brought 12 years of negotiations on the burgeoning southeast Asian economy's entry to a successful conclusion and opened the way for membership next year. "Today is a very important and memorable day in the process of the international integration of Vietnam," Vietnamese Deputy Prime Minister and Foreign Minister Pham Gia Khiem told reporters in Geneva.

Under the organisation's rules, Vietnam will officially become the 150th WTO member 30 days after it notifies the global trade body that its national assembly has ratified the Geneva decision. A vote by Vietnam's parliament is expected by December 5, according to the Geneva based WTO. Lamy said the organisation would provide Vietnam's "dynamic and powerful" economy with a stable international trading environment.

But the country needed to anchor the reform process it started more than a decade ago and remove obstacles that hamper the development of small business, he cautioned. "Provided those two things are addressed by adequate domestic policies I see Vietnam as one of the rising stars of world trade," Lamy predicted. Tuesday's decision was largely a formality after the details of the 900-page deal were sealed with negotiators of 43 economies most involved in trade with Vietnam on October 26.

For many sectors of the economy, Vietnam will benefit from transition periods to implement market opening rules, with deadlines ranging from 2008 to 2014. Lamy underlined that Vietnam will host an Asia-Pacific Economic Cooperation ( APEC) summit on November 18-19 with the added weight of forthcoming WTO membership. Vietnam -- East Asia's fastest growing economy after China with over 8.0 percent GDP growth last year -- hopes WTO membership will bring further trade and investment to boost wealth in the emerging market of 84 million people. To get ready for the new free trade era, Vietnam has sped up its 20-year-old 'doi moi' (renewal) reform process, moved to equitise state owned enterprises, introduced scores of WTO-compliant laws, and made efforts to improve transparency and fight corruption.

"WTO membership also helps Vietnam refine its reform process, creating opportunities for trade expansion, which is an important tool for economic growth," Trade Minister Truong Dinh Tuyen said in Geneva "WTO accession poses major challenges to Vietnams economy. However, we do believe that with cooperation extended by the members, Vietnam will make the most of opportunities," he added. Lamy acknowledged that the price of WTO membership was rising. Senior government economic advisor Le Dang Doanh said the move into the free trade club promises lower prices and more choice for consumers. But he warned that Vietnamese enterprises must fight to remain competitive, "otherwise they will go bankrupt, workers will lose their jobs and the social security system will come under pressure."

Under WTO rules and agreements struck with the United States and other trade partners, Vietnam must drop a host of tariffs and industrial subsidies and lift domestic restrictions against foreign companies. Many large corporate players have eyed Vietnam. A lobby group known as the US-Vietnam Trade Council includes such household names as FedEx, Ford Motor Company, Intel, Liberty Mutual, Motorola and Time Warner. Vietnam will gain full and non-discriminatory access to the US, EU and other large foreign markets, hoping to boost exports in sectors such as textiles, footwear, electronics, rice, coffee and seafood.

In case of trade battles -- such as a recent row with the United States over catfish shipments, and EU claims it is dumping footwear on its market -- Vietnam will now have recourse to the WTO's dispute settlement forum. A final hurdle remains in fully normalising trade ties between Vietnam and the United States, where legislation to grant Vietnam Permanent Normal Trade Relations (PNTR) status has been held up for months in Congress.

Agence France Presse - November 7, 2006.


US congratulates Vietnam over WTO entry

WASHINGTON - The US government congratulated Vietnam for winning entry to the World Trade Organization, and urged Congress to enact regular trading ties with the communist nation. US Trade Representative Susan Schwab said the administration was "very pleased" that Vietnam had finally won the green light from the Geneva-based WTO after 12 years of negotiations.

"The world will benefit from the inclusion of this rapidly-growing, dynamic economy in the rules-based trading system," she said in a statement. "We now call upon Congress to quickly pass Permanent Normal Trade Relations legislation that will permit US businesses, workers and consumers to benefit fully from Vietnam's accession and to build deeper and stronger bilateral trade ties going forward." Legislation to grant Vietnam PNTR status has been held up in the US Congress for months. In its absence, US businesses will not benefit from the full terms of the country's WTO liberalization.

Some analysts say that a Democratic victory in national elections Tuesday could leave Vietnam's trading status more firmly on the back burner, if protectionist legislators wield more influence in the next Congress. Vietnam will officially become the 150th WTO member 30 days after it notifies the global trade body that its national assembly has ratified the Geneva decision. A vote by Vietnam's parliament is expected by December 5. The WTO agreement, propelled by an all-important bilateral accord with the United States, came before Vietnam hosts a summit of the Asia-Pacific Economic Cooperation forum on November 18-19.

Schwab said that at the APEC gathering, which is set to be attended by President George W. Bush, "we look forward to celebrating Vietnam's WTO accession and starting a new chapter in our trade relations."

Agence France Presse - November 7, 2006.