The World Trade Organization, commonly abbreviated WTO, is an international organization whose objectives are to supervise and facilitate international trade. Officially established on January 1st 1995, under the Marrakech Agreement, WTO is now the home to 153 members, standing for more than 97% of the world’s population, and 30 observers that are endeavoring to be WTO ‘s official members.
When it comes to the relations between Vietnam and WTO and even between Vietnam and other international organizations, some economists once stated that Vietnam was the country that never missed an opportunity to miss an opportunity. Truly, with favourable conditions, Vietnam had been waiting for too long to be part of WTO.
After 12 year wait time, in early 2007, Vietnam became the 150th WTO member. As a new member of WTO, Vietnam’s commitments are to gradually eliminate protectionism in terms of international trade and foreign investment and improve transparency. Reducing tariff barriers; making pricing policy more transparent; cutting down or abolishing subsidies or support for domestic products; complying with WTO’s regulations and agreements; creating favorable conditions for market economy to develop and opening market for financial, insurance, accounting, auditing and taxation services are most significant fields that Vietnam has committed.
Successes & Challenges
Vietnam has been trying hard in implementing WTO commitments through revising and amending existing legislations as well as issuing new legal documents to undertake commitments on schedule. Globalization and WTO accession are like double-edged swords. Both promising and challenging scenarios are being pictured in front of Vietnam when Vietnam economy is integrating more deeply into the world economy. To illustrate, WTO accession has profound impacts on Vietnam economy, namely promoting economic development (around 7% over 4 year period); expanding international market and increasing exports; attracting more FDI capital (nearly 15 billion US per year); improving the effectiveness of resources allocation; enhancing the country competitiveness; alleviating poverty and increasing living conditions, to name but a few. However, numerous challenges are confronting Vietnam; participating WTO showed clearer restrictions and weaknesses of the immanent structure of the economy.
To be more specific, although the economic growth rate is quite promising but in fact the growth quality is still a question mark as the driving force of Vietnam economic growth does not stem from the immanent ability of the economy but from overwhelming and ineffective investment. Besides, economic structure shift has been slow, facing numerous obstacles from the state itself with the sluggish and ineffective privatization process.
Therefore, the instability of macroeconomic is inevitable as it is now. In addition, there were adequate evolutions on institution, leading to the ineffectiveness of implementing policies and potential risks for the macroeconomic. Weak points on infrastructure and human resources remain unchanged and even more perplexing as they prevent the country from taking new opportunities when opening the economy. To conclude, Vietnam still has a long road ahead to make full use of opportunities as well as challenges brought by WTO accession.