Policies and plans for next month are critical, said Truong Trieu Duong, director of Foreign Affairs Ministry’s Multilateral Economic Cooperation at a recent seminar on Vietnam’s WTO commitments and impacts on provinces and enterprises.

Under WTO commitments, wide-ranging import tariff reductions means an influx of high-quality goods and services would flood the local market at more competitive prices.

Vietnam has pledged to decrease current average import taxes on agricultural goods from 31.6 percent to 21 percent in five years, making imported items more competitive in the country.

The country’s industrial production sector will see fierce competition from imported goods as import duties on industrial items are set to lower from 36.5 percent to 12.6 percent in five years.

However, Duong said tariff reductions after Vietnam joined ASEAN, the ASEAN Free Trade Area, and the implementation of the Vietnam- US Bilateral Trade Agreement did not hurt the local industry.

He also forecast that service sectors such as telecoms, banking, stock exchange and distribution would see more than their share of movement.

Vietnam’s commitment to open the service sectors will offer favor conditions for foreign service players to compete with local companies.

The WTO agreement will unlock Vietnam’s market, luring more foreign direct and indirect investment inflows and also creating more pressure on finance and banking industries.

Local businesses must be ready to face more lawsuits, particularly anti-dumping, when the country develops overseas.

Vo Tri Thanh, head of the National Economic Management Institute’s Integration Division, said the country’s WTO membership card would support Vietnam to expand overseas markets and sharpen its competitive edge.

Exports will grow, particularly to major markets like the US, the EU, and the trade partners of the ASEAN bloc, including China, Japan and Korea.

However, to hold high export growth, local businesses must diversify and shift production to the hi-tech industries of the future.

WTO membership would also help localities source more foreign investments and have wider access to overseas markets.

The trend would enforce domestic businesses to enhance their competitiveness for survival if they want to outlast fierce trade battles.

Additionally, businesses were urged to increase domestic cooperation in terms of financial capacity and human resources within the community, as a wave of business savvy international rivals will herald the coming international integration.

Source: Thanh Nien