Bridges Trade BioRes • Volume 6 • Number 21 • 1st December 2006
VIETNAM SET TO ENTER THE WTO, IMPLEMENT NEW ENVIRONMENTAL MEASURES
VIETNAM SET TO ENTER THE WTO, IMPLEMENT NEW ENVIRONMENTAL MEASURES
Vietnam, a resource-rich country and major exporter of textiles, seafood, coffee and furniture, is set to become the 150th member of the WTO. In parallel with efforts to support its rapidly growing economy, the country is also undertaking an overhaul of its environmental policies.
Vietnam ratified its WTO membership agreement on 28 November, paving the way for the nation to enter the organisation on 28 December, 30 days after the National Assembly vote. The WTO General Council formally approved its entry on 7 November (see Bridges Weekly, 8 November 2006, http://www.ictsd.org/weekly/06-11-08/story2.htm). Over the last two decades, communist Vietnam has gradually implemented free-market reforms, attracting foreign investors who show increasing interest in the country. Although its economy is relatively small, Vietnam’s economic growth topped eight percent last year, foreign investment surged by nearly 50 percent and exports increased by over 20 percent.
On 10 November, the Vietnamese Ministry of Natural Resources and Environment announced that it was developing an environmental protection plan in line with international standards to coincide with the country’s WTO entry. According to the ministry, the aim of the plan is to contribute to reducing the impacts of the country’s rapid economic growth on the environment and use of natural resources.WTO commitments on goods and services
Vietnam is actively preparing for making use of all opportunities of accessing the global market and coping with the challenges of opening the door to foreign goods and services when the country enters the WTO.
In its WTO membership package, Vietnam committed to lowering many tariffs for agricultural and non-agricultural goods and agreed not to subsidise agricultural exports. It also committed to opening previously protected economic sectors to foreign investors, such as banking, financial services and telecommunications. Reforms that need to be undertaken by Vietnam include the implementation of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures, compliance with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement as well as the WTO agreements dealing with rules (such as subsidies and anti-dumping).
Trade Minister Truong Dinh Tuyen said that WTO membership would bring both benefits and costs. He noted that increased trade and investment would boost the economy, but fierce foreign competition might bankrupt some companies and cause social dislocation within the country. WTO membership, he said, would provide Vietnam access to the dispute settlement mechanism, assuring that its disputes with its trade partners would be resolved on a more level playing field.Good environmental governance
Meanwhile, the recently-established Ministry of Environment and Natural Resources (MoNRE) will co-operate with the Finance Ministry to provide VND3,500 billion (US$218 million) for national environmental protection programmes in 2007. The aim is for Vietnam to comply with international environmental standards. The MoNRE is developing a plan that calls for different economic sectors, businesses and civil society to implement environmental measures. The plan also encourages foreign enterprises to invest in infrastructures for the treatment of environmental pollution in industrial production sectors and wastewater treatment.
According to the environment ministry, new regulations on environmental taxes, environmental protection fees and deposits for an Environmental Protection Fund are set to be implemented in the near future.
While the policy and institutional framework for environmental management is improving, the capacity to plan and actually achieve environmental sustainability outcomes remains a challenge. For example, most Vietnamese enterprises are small and medium-sized, and lack the means to implement the environmental management systems such as IS0 (International Standard Organisation) 14000. These companies would need government assistance and technical support.
According to Permanent Deputy Minister of Environment and Natural Resources Pham Khoi Nguyen, Vietnam’s WTO admission will create competition between domestic and foreign providers of environmental services, which will help improve their quality. International funding is also becoming a major contributor to environmental efforts in Vietnam. Several foreign donors have said they would allocate 15-20 percent of official development assistance funding for environmental protection programmes.
Background: Vietnam’s key environmental challenges
Land degradation is a major environmental problem in Vietnam. It is partly caused by timber exports, which fuel the overexploitation of forest through unsustainable logging practices. Degraded steep slopes and deforested landscapes are now very susceptible to soil erosion during heavy rains. Despite recent increases in forest area, forest quality remains a concern.
In addition, rapid expansion in aquaculture activities for fish export (especially shrimps and catfish) has caused major challenges in the areas of environmental sustainability as well as social equity. Mangroves and wetlands have substantially declined, raising concern about coastal fish yields.
Surface, coastal and ground waters are threatened by pollution. Downstream sections of major rivers reveal poor water quality and most of the lakes and canals in urban areas are rapidly becoming under threat. Rapid urbanisation and industrialisation in coastal areas, expansion of tourism, and an increase in the number of oil spills are all contributing to the deterioration of coastal water quality.
Additional resources
For further details on Vietnam’s WTO membership package, see http://www.wto.org/english/news_e/pres06_e/pr455_e.htm.
"Vietnam’s WTO Membership Ratified", FOX 28, 28 November 2006; "Vietnam Environment", THE WORLD BANK; "Gov’t Builds Environmental Plan", VIETNAM NET, 15 November 2006; "Vietnam Earnmark $218 Mln For Environmental Protection", THANHNIEN NEWS, 10 November 2006; "WTO Formally Approves Vietnam Membership", REUTERS, 7 November 2006; "Vietnam Prepares For Post-WTO Era", PEOPLE’S DAILY ONLINE, 7 November 2006.