Vietnam and the US have concluded a bilateral agreement-in-principle that will pave the way for Vietnam's accession to the World Trade Organization (WTO) by the end of the year.
Businesses have applauded the successful conclusion of the round of talks in Washington since May 9 that will not only see an increase in business prospects between the two countries but a significant amount of reform in Vietnam. “This is a great achievement for our two nations and a historic day. We congratulate both sides for the solid agreement that has been reached,” said the President of the US-Vietnam Trade Council.
The President of the US-ASEAN Business Council also added that “Vietnam's accession to the WTO is of enormous significance…This agreement confirmsVietnam's commitment to market reform and international economic liberalization.” Vietnam's deputy Prime Minister Vu Khoan attributed the successful conclusion of the bilateral WTO entry talks with the US to the National Assembly (NA). “In recent time, the NA has sent several delegations to the US, which has been strong support for the Government before this round of negotiations with the US. However, this should be done continuously without interruption and the relations between the two law-making bodies should be strengthened constantly,” he said.
The accord would be a stepping stone for the US Congress to extend permanent normal trade relations status to Vietnam which allows a country's exports to theU.S. to enter at most-favored-nation tariff rates. Although the congressional vote on giving Vietnam permanent normal trade relations status will be decided primarily on economics grounds, questions involving religious freedom and human rights will also be part of the debate.
Vietnam has been trying to join the WTO to eliminate quotas on its garments export to the U.S., to lower barriers to a wide range of US goods and services, to gain a seat in global trade talks and to attract more foreign investments. WTO membership is viewed as one of the final landmarks in a series of changes towards market-oriented economy started two decades ago.
Despite the benefits, some businesses felt that the trade deal would bring harsh competition to Vietnam's small economy. “This is a game where the strong will live and the weak will die,” said a Hanoi shipping company director Nguyen Vu Hiep. “Market access for Vietnamese firms will be greater but so are the challenges and the biggest challenge is competitiveness-that will determine whether WTO membership is a good thing or bad thing for businesses at the end of the day,” said Professor Tran Dinh Thien of the Vietnamese Institute of Economics. He however also emphasized that the membership would create momentum for more economic reform which is also a major theme for April's five-yearly ruling Communist Party National Congress.
Vietnam expresses hope that the agreement would be officially signed in early June when US Trade Representative-designate Susan Schwab attends the Asia Pacific Economic Co-operation (APEC) meeting of trade ministers in Ho Chi Minh City.
Eyes of the world on Vietnam (Viet Nam News, 17 May 2006)
NA contributes greatly to WTO entry talks: Deputy PM (Nhan Dan, 18 May 2006)
Nation on track to joining WTO (Viet Nam News, 16 May 2006)
Trade deal to bring harsh competition to Vietnam (Thanh Nien News, 16 May 2006)
US businesses applaud US-Vietnam WTO agreement-in-principle (Viet Nam News, 15 May 2006)
Businesses look forward to Vietnam's WTO accession, says expert (18 May 2006)
Vietnam U.S. have reached accord on WTO accession (Bloomberg, 14 May 2006)