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Vietnam and WTO: Close and distant after two years   2008-10-30 - Viet Nam Net

VietNamNet had a talk with the former Minister of Trade, Truong Dinh Tuyen, and the Director of the International Integration Studies Department under the Central Institute of Economic Management (CIEM), Vo Tri Thanh,  about the new opportunities and challenges over the last two years, after Vietnam officially received its membership to the World Trade Organization (WTO).


Truong Dinh Tuyen: I can see three new opportunities. First, the investment, especially foreign investment, has increased considerably. This helps create jobs and high growth rates.


The picture records the memorable minute when Vietnam officially joins WTO. Minister Truong Dinh Tuyen stands first right

Second, the export markets have been expanded with more favourable conditions. Increased investment and exports, and expanded domestic market both have created the most favourable conditions for industries and services to develop, thus boosting the GDP growth.


Third, the WTO membership helps form new management thoughts and new business standards. The implementation of the commitments on market opening, law adjustment, administrative reform, subsidization scheme removal and the intellectual property protection all have helped better the image of Vietnam in the eyes of foreign investors.


Vo Tri Thanh: The biggest success is that the WTO membership has helped the Government speed up the administrative reform and change their way of thinking. It is clear that the Government has become more flexible. It has quicker reactions to the new circumstances, it listens attentively to experts and it makes definitive decisions.


What would you say about how Vietnam has taken full advantage of the WTO membership over the last two years, since it officially was admitted to the biggest trade organization in the world?


Truong Dinh Tuyen: Though we have achieved the initial encouraging results, the achievements are not big enough to create new breakthroughs. Vietnam’s business environment, according to the World Bank 2007’s report, was ranked the 68th out of 131 ranked countries, falling by four grades from the pre-WTO period.


A lot of challenges are awaiting us. For example, the bigger gap between the rich and the poor is worth worrying about. The happenings in the world always have big impacts on the domestic market, while Vietnam is still weak at its forecasting capability.


Vo Tri Thanh: The most unfortunate thing is that Vietnam was too enthusiastic and that we were perplexed with our policies. This has led to the existence of too rigid measures which were not really necessary and, to some extend, caused adverse effects.


The high trade deficit has emerged as the big problem over the last while. Do you think that the high trade deficit is the big challenge for Vietnam in the WTO-period which Vietnam did not anticipate?


Truong Dinh Tuyen: Before joining WTO, Vietnam’s trade deficit was always lower than 20% of export turnover. The figure has risen to 30% after Vietnam joined WTO. However, I have to say that the high trade deficit is not because of the WTO membership. It is because of a series of factors, including the underdeveloped supporting industries which made Vietnam reliable on the world’s material supplies.


Vo Tri Thanh: In principle, the medium and long term trade deficit should be 5-7%. The 30% trade deficit in 2007 proves to be an overly high level. However, trade deficit is the thing that always can be seen in rapidly developing countries.


There hides a lot of uncertainties in the world’s market. What do you think Vietnam should do in 2009 in order to minimize the bad impacts of the global economic recession?


Truong Dinh Tuyen: 2009 will be a very difficult year. There are a lot of things that need to be done, especially the settlement of inner problems: perfecting the market mechanism, developing the human resources and completing the legal framework.


Vo Tri Thanh: The inflation has decreased, but problems still exist. The economic growth remains unpredictable. I think we need to focus on macroeconomics stability.


What would you say about the opportunities and challenges for Vietnam in the time to come?


Truong Dinh Tuyen: WTO does not bring mystery, and it is not a trap. The opportunities are very big, but we still have not taken full advantages of them


Vo Tri Thanh: The opportunities prove to be very big. But if we cannot turn the opportunities into reality, the opportunities will become challenges.


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