News and Analysis • Volume 10 • Number 7 • November 2006

Vietnam’s Accession

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After 11 years of negotiations, WTO Members accepted Vietnam’s accession to the world trade body on 7 November.

According to local media, Vietnamese exports are expected to grow from US$32.2 billion in 2005 to US$100 billion over the next five to seven years. Anticipating the WTO accession, foreign direct investment in Vietnam increased by 41 percent during the past year.

Textiles and clothing exports are likely to benefit the most from WTO membership, since quotas restraining access to some major markets will be lifted. There are, however, serious concerns over how the fishing, forestry and farming sectors – which employ the majority of the country’s work force – will stand up to foreign competition.

Speaking to the press after the accession approval, Vietnam’s Deputy Prime Minister Nguyen Sinh Hung admitted that fierce new competition would make some enterprises and commodities fail. “If enterprises do not reform quickly, particularly state-owned enterprises, which generate more than 40 percent of the GDP, they will be confronted with huge difficulties,” he said. Vietnam also faces a considerable challenge in implementing and enforcing intellectual property rights.

In late November, the Vietnamese government is due to hold three large meetings in Hanoi and Ho Chi Minh City to familiarise company and business association representatives with the country’s WTO commitments. The government has also posted the English versions of the WTO accession working party’s report and Vietnam’s schedules of commitments in goods and services on its website (www.mot.gov.vn). Vietnamese translations will follow.

The National Assembly is expected to ratify the accession package on 28 November, thus clearing Vietnam’s formal entry to the WTO before the end of the year.