Vietnam ratifies WTO membership

Vietnam on Tuesday ratified the country's admission to the World Trade Organisation (WTO), setting the stage for one of the world's last communist states to enter the global economy this year.
The WTO on November 7 gave Vietnam the green light to become its 150th member, a step that will be formalised 30 days after Hanoi informs the Geneva-based group of the widely expected legislative approval. The Communist Party-dominated national assembly approved Vietnam's entry into the trade club in a 444-3 vote with two abstentions, finalising Hanoi's almost 12-year-long drive to join the WTO.
President Nguyen Minh Triet earlier called on the assembly to approve the bill, saying it "will directly impact Vietnam's economic relations with other WTO members and the global economy." "It will offer us big opportunities in domestic and foreign investment and help elevate the position of Vietnam in the world."
Assembly Chairman Nguyen Phu Trong, speaking after the vote, called on "all compatriots in the country and Vietnamese overseas to bring speedy and solid development to the Vietnamese economy." Vietnam, which this month hosted a major Asia-Pacific summit of world leaders, has gone to great lengths to join the WTO and integrate its booming economy into the global rules-based trading system.
Gross domestic product grew by over eight percent in 2005 and is on course to do so again this year, making the emerging market of 84 million people East Asia's fastest growing economy after that of its giant neighbour China.
Many investors have this year touted the country as a "China light" for its large, young and highly literate work force, its low wages and the social stability brought by authoritarian rule. The enthusiasm has been fed by recent news that the world's largest chip maker Intel will build a one-billion-dollar plant in the southern commercial hub and port of Ho Chi Minh City, the former Saigon.
But veteran observers of the country have also warned that Vietnam, having passed scores of WTO-compliant laws, still faces tough hurdles in implementing them as it adapts to the harsher realities of the free trade age. Critics point at red tape, corruption and infrastructure bottlenecks, and warn that inefficient state-owned enterprises will have to shape up or go under as more foreign companies crack into their markets.
Trade Minister Truong Dinh Tuyen, who led the negotiations, said "joining the WTO will help Vietnam maintain its strong growth" and make the investment environment "more transparent, more healthy and more stable." "By joining WTO, we sent a strong message abroad on our commitment to 'doi moi' (renewal) and reform," he said, referring to market reforms launched 20 years ago as the war-shattered country slowly reopened to the world.
But he also warned that economic globalisation increased wealth gaps between and within countries and that "the business environment in Vietnam will be more fierce in many sectors." "Joining the WTO will also create new issues in national security, cultural identity and environmental protection," said the veteran trade diplomat.
Under the new rules - negotiated with the United States and other trade partners as well as the WTO itself - Vietnam must scrap a range of tariffs, subsidies and other barriers that protect local industries.
In return, Vietnam, a major exporter of textiles, footwear, rice, seafood and coffee, will face fewer hurdles in selling its goods abroad and recourse through the WTO in case of trade disputes. A final hurdle remains in normalising trade with the United States, where a bill to grant the former enemy nation permanent normal trade relations suffered an initial defeat in a Congressional vote earlier this month.