Vietnam is actively preparing for making use of all opportunities of accessing the global market and coping with challenges of opening door to foreign goods and services when the country enters the World Trade Organization (WTO) .

The WTO's general assembly on Tuesday is expected to approve the country's membership in a special session in Geneva, ending 11 years of its tough negotiations.

Under the trade body's regulations, Vietnam's membership will become effective 30 days after the country's National Assembly, its top legislature, approves an entry protocol. The vote is scheduled to take place on Nov. 28 at the National Assembly's ongoing session.

According to experts, the membership will give an economic boost to Vietnam, the second fastest growing economy in Asia after China, as it offers the country more opportunities of increasing exports to and luring foreign investment from 149 other members.

As a WTO member, the country will enjoy the most-favored nation status, which enables its products to deeply infiltrate into the global market. Vietnamese garments and textiles will be no longer subject to quotas when being exported to the European Union (EU) and the United States. Local exports such as seafood, rice, coffee and garments will also be protected in trade disputes by the organization's rules.

The membership is expected to help increase Vietnam's annual export revenues to 100 billion U.S. dollars in the next five or seven years, up from more than 32.2 billion dollars last year, local media reported recently.

The WTO accession will also encourage more foreign investors to do business in Vietnam, an open market under its entry commitments. According to many investors, Vietnam's biggest advantages are its high economic growth and the WTO approaching entry, said Phan Huu Thang, head of the Foreign Investment Department under the Vietnamese Ministry of Planning and Investment.

"Big partners like EU, China's Hong Kong and South Korea have not missed the extremely attractive opportunity. They are pouring investment into both new and existing projects in such fields as industry, construction and service. Besides, investment flows in other regions are redirecting to Vietnam," he noted.

Foreign enterprises, through their projects in Vietnam, will introduce advanced technology and business experience to the country, helping it increase production, trade and generate more jobs.

In addition, joining the WTO will contribute to completing the country's law and policy system, making it more suitable to international practices, and creating a better business environment for both local and foreign firms.

However, the WTO accession, which means reducing tariffs and opening doors to foreign enterprises, will pose big challenges to Vietnam. The country's export-driven economy will face tough competition, especially in agricultural products, while local enterprises show weaknesses in competitiveness, finance, and technology.

"In the competition, some firms and commodities will fail," Vietnamese Deputy Prime Minister Nguyen Sinh Hung said recently, adding that he was concerned about the competitiveness of local agricultural, forestry and fishery products, which directly relate to life of majority of the country's population. About two-thirds of Vietnamese people work in agriculture, which makes up about 20 percent of the country's annual gross domestic product (GDP).

Under Vietnam's WTO commitments, the country will lower average import tariff levied on farm produces from current 23.5 percent to 20.9 percent within five years, and abolish agricultural export subsidy.

Local experts said vital farm products such rice, coffee and cashew nuts will confront big difficulties in export due to their poor quality, and shortage of trademarks.

Besides, some Vietnamese enterprises, especially those in banking, insurance and finance sectors, worry about the new situation, as they have to compete with foreign rivals with higher greater economic potentials and richer business experience. Some of them may face risks of losses or bankruptcy, resulting in higher unemployment rate and wider rich-poverty gap in the society.

The deputy prime minister has urged local enterprises to make better performance if they do not 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, do not quickly reform, they will encounter big difficulties."

Source: Xinhua