Vietnam joins global trade system as WTO's 150th member
HANOI - Vietnam became the 150th member of the World Trade Organisation (WTO), a milestone expected to launch an era of radical change as the communist nation enters the global economic mainstream.
Southeast Asia's second most populous country hopes its new status as a signed-up member of the international trading system will accelerate rapid economic growth which is topped in East Asia only to China.
"It is a very important turning point," said Le Dang Doanh, a senior economist at the ministry of planning and investment.
"Joining the WTO will mean for Vietnam the start of a new phase of reform. It should lead to very dynamic and hopeful development. Of course, there are opportunities and there are challenges."
Labour-intensive industries would benefit first in the country known for its industrious, low-wage workforce, he said, while capital-intensive sectors would face the stiffest challenges from the entry of outside companies.
"Stronger competitors will come and force Vietnam to be more dynamic and there will be some sacrifices. There will be a limited number of bankruptcies.
"Creative destruction is very important for Vietnam but it's painful. Because the centrally planned economy has so far tried to rescue everybody, now some people must sacrifice."
Foreign Ministry spokesman Le Dung said Vietnam acceded to the WTO at a ceremony in Geneva in what he called "a momentous event in the international economic integration of Vietnam."
WTO director general Pascal Lamy praised Vietnam for its "determination, skills and experience in negotiation" and said its spirit was "what we need for the Doha round," the stalled series of talks to free up global trade.
For Vietnam, WTO membership comes more than 30 years after the end of the Vietnam War and 20 years after it abandoned strict Soviet-style central planning for gradual "doi moi" (renewal) market reforms.
Today, many investors tout Vietnam as a "China-lite," which last year booked economic growth of 8.2 percent and 9.5 billion dollars in foreign investment.
But experts warn that Vietnam must now follow through on the commitments it has made to the WTO through hundreds of new laws, from protecting the rights of foreign companies to cracking down on copyright piracy.
"There's been great progress here but that doesn't mean Vietnam should stand still by any means," said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi.
"Every day is an opportunity for Vietnam to become more competitive and for Vietnamese people to have a better life."
Under its membership terms, hammered out with the United States, other trade partners and the WTO over more than a decade, Vietnam must scrap a range of tariffs, subsidies and other barriers that protect local industries.
In return, Vietnam -- a major exporter of oil, textiles, footwear, rice, seafood and coffee -- will face fewer hurdles in selling its goods abroad and have recourse through the WTO in case of trade disputes.
Vietnam has pushed hard to join the WTO while dampening expectations among its 84 million people that the move will bring overnight wealth.
Trade Minister Truong Dinh Tuyen recently cautioned that "whether these opportunities can be turned into real benefits depends on the efforts of each individual and enterprise."
The government plans to sell off shares in some large state enterprises in coming years, including Vietnam Airlines and major banks, but it remains unclear what share and how much control it will give to private investors.
Vietnam, one of the world's five remaining communist-ruled states, describes its economic model as a "market economy with socialist orientation."
Doanh, the senior economist, said: "The problem is what you mean with socialist orientation.
"You mean it's freedom for everybody, it's equality, it's fraternity, that's okay," he said. "If you mean it's the leading role of the state-owned enterprises, that's another question."
By Frank Zeller - Agence France Presse - January 11, 2007.
Vietnam becomes the WTOs 150th member
GENEVA - Vietnam on Thursday became the
World Trade Organization's 150th member, signaling the communist nation's emergence as one of the world's fastest-growing economies.
"Welcome, Bienvenue, Bienvenido, Vietnam" read a giant blue banner across the across the WTO's Geneva headquarters.
Entry for Vietnam — whose economy has grown by an average of more than 7 percent for the last decade — comes as good news for the commerce body, which is embarking on an uncertain year while global free trade talks remain suspended and countries appear unlikely to agree on a deal.
Vietnam's entry, the terms of which were decided in November after 11 years of negotiations, opens the door to increased trade and investment in the country. It also will mean increased access to foreign markets for Vietnam's industries and a neutral arbiter to hear disputes that arise with the country's bigger, more powerful trading partners.
With a population of 84 million people, Vietnam had been the second most populous country behind Russia still outside the WTO. Russia has been seeking membership for over a decade and is probably still at least a year away.
Over the last two decades, Vietnam has gradually implemented free-market reforms, winning praise from foreign investors whose interest in the country has been growing. But the government continues to exercise direction over many large, state-owned companies.
Foreign direct investment in Vietnam reached a record $10 billion last year.
The Associated Press - January 11, 2007.
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