The World Trade Organisation (WTO) on Tuesday 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.
The decision by the WTO’s governing General Council brought 12 years of negotiations on the burgeoning South-East Asian economy’s entry to a successful conclusion and opened the way for membership next year.
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.
”The 11-year marathon has ended,” said Hanoi’s veteran negotiator Vu Khoan, a former deputy prime minister and prominent economic reformer.
”This international integration is completely new for us,” he told the Tuoi Tre (Youth) newspaper. ”It has never before happened in our history.”
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.
Vietnamese Deputy Prime Minister and Foreign Minister Pham Gia Khiem and Trade Minister Truong Dinh Tuyen attended the meeting of the WTO’s governing council.
Vietnam will host an Asia-Pacific Economic Cooperation (Apec) summit on November 18 and 19 with the added weight of forthcoming WTO membership.
Vietnam — East Asia’s fastest-growing economy after China with more than 8% GDP growth last year — hopes WTO membership will bring further trade and investment to boost wealth in the emerging market of 84-million people.
”Vietnam has sought to integrate its economy with the global economy,” said Carl Thayer, a Vietnam expert from Australia’s Defence Force Academy. ”Vietnam will now be one among 150 equals who are members of the WTO.”
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.
The WTO accession is an ”important breakthrough for Vietnam’s economy”, said senior government economic adviser Le Dang Doanh. ”Consumers will enjoy lower prices, more choice, more equal competition … The economy will become more active and other countries will look at Vietnam as a newly emerging market.”
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, Intel, Liberty Mutual, Motorola and Time Warner.
Vietnam will gain full and non-discriminatory access to the US, European Union 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 US 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.
”This is a great achievement and a historic day for Vietnam,” Virginia Foote, president of the US-Vietnam Trade Council, said in a statement.
A final hurdle remains in fully normalising trade ties between Vietnam and the US, where legislation to grant Vietnam Permanent Normal Trade Relations (PNTR) status has been held up for months in Congress.
As President George Bush readies to visit Hanoi for the Apec summit, a Florida senator has threatened to block the Bill unless Vietnam frees a Vietnamese-born US citizen who is among seven dissidents under arrest there.
But Foote said the US business community is committed to supporting the extension of PNTR for Vietnam ”on the earliest possible date”. — Sapa-AFP