NEWS 4 TODAY-4-6-08
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Experts examine WTO repercussions
(05-04-2008)
Shopkeepers at Hai Ba Trung Street, Ha Noi, are stocking air-conditioners in preparation for the summer. WTO membership has allowed Viet Nam to access a wider source of goods, which means more options for local consumers. — VNA/VNS Photo Bui Tuong
HA NOI — The Ministry of Industry and Trade and a delegation from the European Commission met on Wednesday to discuss the challenges faced by Viet Nam since joining the World Trade Organisation one year ago.
"There was much progress made within 2007, including a sharp increase in export turnover and GDP, and especially a record-breaking amount of foreign investment," Nguyen Thanh Bien, deputy minister of industry and trade, said.
"At the same time, Viet Nam’s economy has faced a high trade deficit and skyrocketing inflation, which is getting worse this year because of the changes in the global economy."
Assessing the progress of WTO membership was difficult because other trade agreements had also affected Viet Nam’s economy before it entered the organisation, several experts said.
An economic expert with the EU delegation, Professor Claudio Dordi, said that determining the positive impact of WTO admission was very hard "and the negative effect is another side of the coin".
He said that reforms made upon joining gave Viet Nam’s economy more freedom. However, this also made the economy more vulnerable to such things as inflation or intense competition.
Consequently, the professor advised the Vietnamese Government to be cautious when rolling out any policy or plan related to trade or economy.
Antonio Berenguer, trade counsellor with the delegation of the European Commission to Viet Nam, said the country had earned more than half of its foreign investment from other trade agreements that it had signed, including the ASEAN Free Trade Area (AFTA) Agreement.
Viet Nam’s many bilateral and multilateral trade agreements, such as the US-Viet Nam Bilateral Trade Agreement and one with the EU, were already in force before the country joined the WTO.
Identifying the specific impact of WTO admission was not easy, Berenguer said.
"Other non-economic factors like the recent slowdown of the US economy, the political instability of many countries, and the Vietnamese stock market’s falling also create a remarkable impact on trade," he said.
Despite such confusion, most leading experts agreed that the country’s growth rate of 8.5 per cent in the first year after joining the WTO showed positive signs.
Le Dang Doanh, former director of the Central Institute of Economic Management, found that a more open market and, thus, a wider source of goods bringing more options for local consumers, were two pluses.
In addition, WTO membership had spurred the Government to further administrative reform, empowering its competitive competence in the international market.
Last year, Viet Nam attracted more than $20 billion in foreign direct investment, equal to the total of the previous five years.
The nation’s export revenues also reached $48.4 billion, a year-on-year rise of more than 20 per cent.
The securities market also developed, with its capital accounting for more than 40 per cent of the nation’s gross domestic product.
Dang Duc Anh, an economic expert with the Vietnamese Ministry of Planning and Investment, said the high growth rate, a record for the past decade, was due to domestic investment and consumption.
The prices of Vietnamese goods remain competitive due to the depreciation of the greenback against the currencies of Viet Nam’s major trade partners.
If the inflation rate remains high, however, Viet Nam will lose its price competitiveness compared to regional rivals, especially when the US dollar regains its value, experts warned at the meeting.
To maintain a high economic growth rate, speakers suggested that Viet Nam accelerate reform and improve the growth quality and competitiveness of all sectors in the economy.
Viet Nam needs to maintain its competitive advantage in major staples like footwear, textiles and apparels and farm produce, experts said.
They also warned Vietnamese businesses to examine the WTO’s regulations to devise more effective business strategies. — VNS
