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No bets on WTO entry by end-2005
Source: 01/Jan/2005 Thuong Mai

Jan 5, 2005, 09:55

In a recent interview, Tran Quoc Khanh, Director of the Multilateral Trade Policy Department, Ministry of Trade talked about Vietnamís prospects for entry to the World Trade Organisation in 2005. Excerpts:

It appears negotiations about Vietnamís accession to join the WTO is making satisfactory progress and according to a foreign press report, Vietnam is more than likely to join the WTO at the end of 2005. What do you think of this assessment?

I have not read that article though I wonder whether that is an equivocal statement. But foreign correspondents are right in saying negotiations have brought positive results. In 2004, we had two rounds of multilateral talks in addition to another one covering the policy on food hygiene and safety. We also finished talks with six partner countries the most important of whom are the EU, Argentina and Brazil. Despite the fact that talks are not of the most consequence in terms of number, the good results gained has brought about a considerable number of ongoing negotiations.

Are you avoiding saying that Vietnam will become a WTO member at the end of 2005?

No, I donít. That does not depend on us totally. Negotiations will take more time if a stubborn partner country suddenly appears. China and Cambodia found themselves in this dilemma. Moreover, negotiations will become harder at the final stage when the thorniest problems are usually brought up and resolved. We are trying our best to show WTO members our determination but we have to take precautions to take care of any eventuality.

Which are the main difficulties remaining and what is the best approach to tackle them?

Some three issues remain to be dealt with. Firstly, it is the ability to comply with commitments. Secondly, these are the stipulations on the breach of the principle of indiscriminate treatment. Thirdly, is the possibility of excessive government intervention in trade activities.

Until now, we have been committed to abide by the basic agreements of WTO as from the time of accession. In order to fulfil these commitments, it is imperative for us to amend and supplement current laws. WTO members are scrutinising this programme that reflects our capacity and seriousness in the work of carrying out our pledges. With the support of the NA, this programme is nearing completion. The most important legal documents will be considered for issuance near the end of 2005.
In spite of this, some partners want us to speed up this schedule. They even suggest we promulgate a law to amend many others at a single Instance. This requirement is somewhat immoderate but we have to understand their anxieties in a situation when many countries that have recently joined WTO fail to put commitments into practice or to carry them out for formís sake only. I think we can win the trust of WTO members by going in the right direction and issuing some good quality legal documents on time. Only by so doing will the pressure be less heavy.
The second problem has to do with the discriminatory treatment between domestically made goods and foreign imported goods. For instance, it is forbidden to import used cars but the law allows secondhand cars to be traded freely in the country. The special consumption tax imposed on domestically assembled cars is lower than imported vehicles. The same thing applies to the right to export and import goods. Foreign invested companies in Vietnam have not had the same rights as Vietnamese companies in exporting and importing. We need as soon as possible to sort out these discrepancies.
The third problem concerns prohibited subsidies according to WTO rules. Specifically, this would apply to the governmentís domestication programmes and non-agricultural products. We are committed to abolishing subsidies for domestication programmes as from the time when we join the WTO. We will put an end to subsidies for non-agricultural products in the three following stages: state budget subsidies will be completely eliminated within three years from accession. Other grants will be eliminated, particularly in form of preferential treatment for investment in exports production within nine years. However, some WTO members do not agree with these time frames saying they are too long. They instead prefer the immediate abolishment upon Vietnamís accession. It is anticipated that negotiations about timeframes will be arduous in this regard.
Some partner countries are afraid that we will use state-owned enterprises to deeply intervene in trade activities. To take precautions, they suggest we put forth specific commitments to reduce SOE dominance in commerce. Hopefully, with the introduction of the competition and anti-monopoly law and the unified corporate law coming into existence, they will be less worried.
What about negotiations to open up domestic markets and what is the state of progress and which problems are the most intricate, taxation or services?
The bilateral negotiations are underway in a strenuous manner. Disagreements have been narrowed between several partners some of whom are extremely influential. We can hardly say which issues are more difficult to finalise because talks are held about full packages. We are trying to arrive at a common consensus on every point of contention. We often recognise the most contentious issues when talks approach conclusion.

In this sense, there is little information concerning this whereas domestic businesses are eager to know which commitments Vietnam will make?
Please understand our situation. Until we finished negotiation, we cannot reveal all the commitments. What we would like to stress is the negotiation plan cannot be disconnected with policy as well as the process of economic reform set forth by the state and the Party. As I said previously, the accession to WTO is only a continuation of reform that we are carrying out. Our ultimate goal is to create a fair and competitive commercial environment, a world of transparent economic activities in which businesspeople and their rights are respected. We are going in this direction with or without joining the WTO.
The pressure of competitiveness has been brought to bear on us for a long time regardless of whether we will become a WTO member. We do not mean to ignore the requirement of businesses to obtain information about WTO talks. In reality, the government has made sustained efforts to disseminate the WTO stipulations and needs to businesspeople. Many conferences, seminars and training courses have been held for this purpose.
The media has made a great contribution to such dissemination of information. The trade minister and many other ministerial officials have been to many localities so as to present the opportunities and the challenges of the process the world economic integration including Vietnamís accession to the WTO. We do not think we have been fleeting in information propagation.