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WTO membership spurs progress
Viet Nam has achieved significant social and economic progress since becoming a member of the World Trade Organisation (WTO) in January 2007, according to a government report.
Government policies have created favourable economic conditions for local businesses to flourish and helped lure foreign investment, as well as raise the the country's capacity to compete in the global market.
Growth has been seen in export turnover, foreign direct investment (FDI) and product distribution, according to the report from the Central Economy Research and Management Institute's Document and Information Centre.
One of the most significant achievements was export turnover, which rose by 21.3 per cent in 2007, reaching US$62 billion in 2008, a surge of 29.5 per cent compared to 2007.
In 2008, the country's export markets expanded to 150 countries. Last year, despite the negative impact of the global financial crisis, the country's export growth declined by only 9 per cent.
Export turnover so far this year has reached $6 billion, an increase of 14.4 per cent compared to April, while import turnover has been $6.85 billion, a rise of 5.5 per cent compared to April, according to figures from the Ministry of Industry and Trade.
The ministry also said the prices of exports during the first five months of 2010 rose 8 per cent compared to the same period last year.
The committed FDI capital reached $12 billion in 2006, $21 billion in 2007 and up to $71 billion in 2008. However, the committed FDI capital fell quickly in 2009 due to the impact of the global recession.
Despite the financial crisis, registered FDI capital reached $21.4 billion in 2009, which was higher than that in 2007 when the country was not affected by the global downturn, according to government figures.
Since WTO membership, Viet Nam has lured registered FDI capital worth more than $114 billion to develop more than 4,000 FDI projects, 4.5 times higher than the target.
According to the Ministry of Planning and Investment's Foreign Investment Department, by 2009 the country had nearly 11,000 FDI projects in 18 out of 21 sectors with 89 countries and territories participating.
Foreign investors have poured capital into many sectors, including electronics, computing, garments and textiles, banking, finance, insurance and others.
The country has also seen progress in the reform of administrative procedures after joining the WTO, with a 30-per-cent reduction in administrative red tape.
Trade barriers
Viet Nam has also confronted many challenges during the three years since it became a WTO member.
As a requirement to join the WTO, Viet Nam reduced tariffs on a number of imported goods. The consequences of such reductions have had beneficial as well as detrimental effects.
For example, the Government cut taxes on imports of meat beyond its WTO commitments, and as a result, local breeding households and farmhouses were adversely affected, resulting in many bankruptcies.
After the local media began reporting on the situation, concerned agencies took action and re-adjusted the tax on imported meat.
Of all sectors, the agricultural sector has received the least benefits since WTO membership, according to the report.
Exports in agriculture, forestry and aquatic products have not soared dramatically as anticipated.
The State budget in the agricultural sector is only 8 per cent, less than the 10 per cent as committed to by the Government.
Foreign investment in the country's agricultural sector has been falling, from 21.6 per cent in the 1988 – 90 period to 8.3 per cent in the 1991 – 95 period, according to figures from the Ministry of Planning and Investment's Department of Foreign Investment.
During recent years, exports have faced a number of trade barriers, including anti-dumping lawsuits and protests from importers about the alleged subsidies given to several sectors.
Viet Nam, however, has neglected the importance of restricting imports or ensuring product quality carefully, according to experts.
There is a call for stricter oversight of quality control of imported products to protect the rights of customers and the country's production economy, according to the report from the Central Economy and Management Research Institute.
In addition, the competitiveness of businesses and products of Viet Nam are still limited and slowly improving, compared to countries in the region, particularly in the areas of human resources training, infrastructure and technology.
Experts have also pointed out that the number of industrial parks and export processing zones built in many localities nationwide has rocketed in order to attract FDI but growth has had a serious impact on the environment.
At a workshop on the socio-economic impact after three years of WTO membership, former Deputy Prime Minister Vu Khoan said that Viet Nam had many difficulties in coping with the impact of the global recession during its WTO membership. In addition, the country had yet to take advantage of its opportunities.
Khoan also said that restructuring the economy had played a very important role in successfully integrating into the WTO.
Tran Dinh Thien, head of the Viet Nam Economy Institute, said the three years since WTO membership had given the country enough time to evaluate its progress and shortcomings, especially socio-economic achievements.
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