Vietnam steps closer to WTO door

Vietnam has completed final negotiations to join the World Trade Organization (WTO) and will become its 150th member before the end of 2006, concluding 11 years of tough negotiations.

A WTO working party, including representatives from China, the United States, the European Union (EU), Japan and Canada, on Thursday approved documents, spelling out the country's membership benefits and duties, clearing the last hurdle to its accession.

The entry package consists of three main documents, including one on goods commitments, one on service commitments, and the working party's report.

Under the document on goods commitments, which lists commitments on tariff and subsidy reduction, Vietnam will apply tariff ceilings of 0-35 percent to imports. Some items that will be levied higher import tax ceilings such as wine, cigarettes, instant coffee, automobiles and their spare parts will enjoy phased-out lower tax levels until 2014.

The country will have to remove its export subsidies on farm produces, but be allowed to apply production subsidies of 10 percent on them. It will reduce subsidies to industrial sector within five years after the accession.

The document on services outlines which areas Vietnam is opening to foreigners and the limits to them. Vietnam will limit foreign ownership in several service industries, including telecommunications, and implement a number of reforms relating to state-owned-enterprises and foreign exchanges.

The working party's report involves Vietnam's commitments on further reforming the institutional and legal framework for trade. The country has pledged to amend and build 26 laws and ordinances out of more than 100 ones which have to be amended to serve administrative and economic reforms.

After the document approval, the WTO's general assembly is scheduled to meet on Nov.7 in a special session to consider the country's membership. Then, the country can become a full member 30 days after approving the entry protocol.

The National Assembly of Vietnam, the country's top legislature, is scheduled to ratify the country's accession to the trade body on Nov. 28 at its ongoing 10th session, according to local media.

The spokesman of the Vietnamese Foreign Ministry Le Dung on Friday said: "This is the result of tireless efforts made by the government and relevant ministries and agencies, as well as the Vietnamese negotiation delegation, which demonstrates Vietnam's determination to fully integrate into the regional and international economies."

Regarding the U.S. Congress' approval for Permanent Normal Trade Relations (PNTR) for Vietnam, a key element of its accession to the global trading club, the United States may vote on granting the PNTR before U.S. President George Bush visits Vietnam and attends the Asia-Pacific Economic Cooperation (APEC) Summit in mid- November.

The U.S Congress is expected to consider the PNTR for Vietnam one week before the visit, according to sources from the American Chamber of Commerce (Amcham) in Vietnam.

Amcham has made efforts to lobby for the PNTR approval for Vietnam, the chamber's representative said at a recent meeting, "If everything is smooth, PNTR would be approved on Nov. 7."

According to experts and officials, the WTO membership will give a further economic boost to Vietnam, the second fastest growing economy in Asia after China. Vietnam is expected to increase its export revenues to 100 billion U.S. dollars in 2011 or 2012, up from over 32.2 billion dollars in 2005, according to local newspaper New Hanoi on Friday.

As a WTO member, Vietnam will benefit from the lift of quotas that limit its textile and garment exports to the EU and the United States. Besides, it will enjoy more opportunities in terms of trade, investment and technology transfer.

However, the country's export-driven economy would face fierce competition when it has to open more markets to foreign enterprises, cut some import tariffs, and remove subsidies on many products, especially agricultural products. The Vietnamese government has recently expressed its concerns about the competitiveness of local agricultural, forestry and fishery sectors.

The government has urged local enterprises to make improvements if they don't want to lose out in the domestic market.

"If local enterprises, especially state-owned enterprises, which generate over 40 percent of the country's GDP (gross domestic product), do not quickly reform, they will confront with big difficulties," Vietnamese Deputy Prime Minister Nguyen Sinh Hung said recently.

Source: Xinhua