Analysing the competitive capacity of goods and service groups, economic experts have divided it into three types; the competitive group (seafood, special fruits, cashew nuts, pepper, rice, coffee, garments and textiles, footwear, beverage, minerals, handicrafts and tourist products); the conditioned competitive group (tea, rubber, processed food, electronic assembly, cement, banking service, insurance, telecoms, aviation transport, navigation, and auditing); and the low-competitive group (sugar, cotton, oily trees, soya bean, maize, cow milk and steel).

In recent years, apart from improved competitive products, there has been a decline in the competitive capacity of certain products such as rice and coffee. To cope with fierce competition, the garment and textile, and leather and footwear sectors have had to cut back on the number of contracts and even reduce the prices of certain products.

However, with the rapid development of global trade, it is impossible for us to wait until we are “fully capable” of joining the World Trade Organisation (WTO). Therefore, key enterprises, which will likely be affected most by the integration process, have no alternative but to accept opportunities and challenges.

According to Director of Tay Ninh Mechanical Engineering Company, Tran Huu Hau, the current major concern among enterprises is a lack of information, especially about Vietnam’s policies as well as commitments to the WTO, markets, and foreign partners.

Vietnam’s chief WTO negotiator, Deputy Minister of Trade Luong Van Tu, said: ”most importantly, Vietnam has to implement its commitments to the WTO well. Joining the organisation, Vietnamese enterprises will have the chance to access the global goods and service market and attract more foreign investment thanks to the improved business environment. To make the best of these two elements, they should boost goods production to accelerate the opening of new markets but before penetrating the foreign market, they should quickly hold sway over the domestic market.”

Implementing commitments to the WTO

At present, as WTO member countries are not allowed to use “too open” protective measures, such as limiting imported goods and imposing high import tax rates, they tend to resort to what they call “action of protection for legitimate reasons.”

Despite making certain progress in exports with many agricultural products like rice, coffee and cashew nuts taking the top spot in the world, Vietnamese enterprises have not yet fully grasped WTO rules, as well as WTO membership benefits.

General Secretary of the Vietnam Association of Seafood Exporters and Processors (VASEP) Nguyen Huu Dung said, the bottom line is that “Vietnam has to implement its commitments to the WTO. Joining the WTO means we must “play the game” by the common rules and by our strength. That is a major challenge but also an opportunity. As in the early years of experiencing export growth, Vietnamese seafood enterprises already penetrated markets in a number of developed countries.

Therefore, competition in the post-WTO period is not a big problem for them. The crux of the matter is that they must seize good opportunities to overcome challenges.

Before joining the WTO, seafood enterprises had to cope with big challenges including trade and technical barriers and anti- dumping lawsuits but finally they overcame all difficulties in order to move forward”. Most importantly, enterprises should make thorough preparations for the integration process and create close links among them. Vietnam’s international economic integration will surely be successful if enterprises know how to pool their resources together.

However, the success of the integration process depends on the competitive capacity, dynamics and creativeness of each enterprise which is required to draw up its own business strategy. On the other hand, they should intensify investment in highly competitive products, explore lucrative markets and take full advantage of investment opportunities arising from the current process of international economic integration.

According to the Ministry of Trade, there are more than 20 donors, providing 50 trade-related projects to support Vietnam after joining the WTO. Mr Peter Naray, European Technical Assistance Team Leader, said Vietnam’s first challenge after joining the WTO is how to fulfil its commitments. The country will find it difficult to implement its commitments in such areas as services, intellectual property, and agriculture, as well as measures to ensure fairness in trade activities. This will require Vietnam to make remarkable changes in management and organisation. The country should invest in human resource training and rationalise trade management and budget allocation.

Mr Peter Naray said the implementation of WTO commitments is difficult for both Vietnam and other countries. It is necessary to seize opportunities when becoming a WTO member in order to access international markets, especially such export items as footwear, garment and textile, and home appliances. Mr Naray recommended signing separate trade agreements with member countries in order to grasp these opportunities.

Economically, if local enterprises are not well prepared, they will miss opportunities. The EU Committee and a group of international experts have recently made 11 recommendations with 180 action plans to help Vietnam take advantage of trade interests when joining the WTO. The recommendation focuses on strengthening trade policies, building strategies to penetrate the foreign markets and improve the competitive edge of enterprises by enhancing trade supporting mechanisms and supporting localities to develop agriculture.

Enterprises cope with challenges

Vietnam is now the world’s leading exporter in a wide range of commodities and farm products. The country has put forth preferentials to develop agricultural production. Its seafood exports to the EU and US markets are on the rise. But the sector continues to face challenges like anti-dumping lawsuits and requirements for strict control of antibiotic residues. In the future, state owned enterprises will face fiercer competition with large international corporations. In addition, small and medium-sized enterprises will have to face greater challenges as the private sector has opened its doors to many foreign investors. The important thing is that enterprises solve these difficulties themselves.

According to many economic experts, Vietnam still lacks an overall strategy for the development of the service sector which has greatly been affected by the WTO accession process. It is important that from 155 service sectors of the WTO, Vietnam should select and focus on those sectors which could give domestic enterprises a competitive edge over foreign enterprises.

After joining the WTO, another urgent task is to disseminate information on opportunities and challenges as well as impacts of WTO accession on the government, business community and social organisations.

China is very successful in both conducting negotiation rounds and fulfilling WTO commitments. During the past five years, China has provided sufficient information to enterprises and people on opportunities and challenges in the process of joining WTO.

In an interview granted to VOV reporter recently, Deputy Trade Minister Luong Van Tu said the Ministry of Trade is preparing to submit a specific programme to the government for approval to raise people’s awareness of Vietnam’s integration process through the channels of Radio the Voice of Vietnam and the Vietnam Television.