WTO accession: Positive milestone in Vietnam’s journey of int’l integration

Could you share the achievements that Vietnam has gained as a WTO member?

Since it joined the WTO on January 11, 2007, Vietnam has gained significant economic, political, and social achievements.

Economic development and international integration

Vietnam’s exports have grown robustly since it joined the WTO. The export value has increased from US$48.5 billion in 2007 to approximately US$264 billion in 2019, a more than fivefold increase in 12 years. Vietnamese exports have reached more than 200 countries and territories. Major markets, such as the US, the EU, China and Japan, have become Vietnam’s key trading partners.

The export value of key sectors has grown significantly. For instance, phone and component exports increased from US$2.3 billion in 2010 to US$51.4 billion in 2019; textile and garment exports from US$7.8 billion in 2007 to nearly US$39 billion in 2019; seafood exports from US$3.8 billion in 2007 to nearly US$8.6 billion in 2019. Before joining the WTO, Vietnam frequently experienced trade deficits, but it has gradually shifted to a trade surplus, especially since 2011. The shift reflects Vietnam’s improved production and supply capabilities, bolstered by trade opportunities provided by the WTO.

Foreign direct investment (FDI) in Vietnam has grown robustly in registered and implemented capital, especially in manufacturing and processing industries with high export potential. Industrial parks and economic zones have been expanded, and investment partners diversified. FDI has contributed to economic development, job creation, income growth, and improved living standards. Major corporations from around the world have invested in Vietnam, helping accelerate industrial restructuring, creating jobs, and enhancing production capacity.

To compete effectively, businesses need to invest in technology and improve their products

Improved business environment and legal framework

Joining the WTO has driven Vietnam to reform and improve its trade and investment policies and laws to align with international commitments and upgrade the business environment. This has contributed to fostering competition, enhancing transparency, and building trust for both domestic and foreign businesses.

Vietnam’s global position elevated

Vietnam’s WTO membership enables it to contribute more actively to global economic issues, enhancing its global position. Vietnam has actively participated in WTO activities and international forums, demonstrating a constructive role and responsibility within the international community. Since joining the WTO, Vietnam has actively engaged in and signed numerous bilateral and multilateral free trade agreements (FTAs) with strategic partners, including the CPTPP, EVFTA, and RCEP. This process has created new market opportunities, both in quantity and quality, for Vietnam to further expand its international economic and trade cooperation.

Social development

Joining the WTO has had positive effects on Vietnamese society, especially in poverty reduction and improving the people’s lives. Economic development has created new job opportunities, improved income, and raised workers’ living standards.

Vietnam’s WTO membership and international economic integration have helped it reshape policy thinking, improve state management standards and corporate governance, and shape the legal framework and development standards for economic and trade institutions. This has established a strong legal foundation for the country to gradually open up, expand the commodity and service markets, and improve international trade activities in line with multilateral and bilateral commitments, laying the groundwork for the subsequent process of FTA integration.

Businesses need a high-quality workforce to make the most of opportunities from the WTO

What challenges have domestic businesses faced since Vietnam joined the WTO?

Vietnam’s WTO membership has created both opportunities and challenges for domestic businesses.

First, joining the WTO means opening the domestic market to goods from many other countries. This creates significant competitive pressure on Vietnamese businesses, especially small- and medium-sized enterprises with limited capacity and technology.

Second, businesses must comply with stringent international standards in terms of quality, safety, environmental protection, and origin of products.

Third, to compete effectively, businesses need to invest in technology and improve their products. However, many Vietnamese businesses still face difficulties in accessing capital and modern technology, making it challenging for them to be on par with foreign companies in terms of production efficiency and quality.

Fourth, although joining the WTO has helped reduce tariffs on exported goods, many countries still apply non-tariff barriers, such as food safety regulations, environmental standards, and complex customs procedures. This creates difficulties for Vietnamese businesses in exporting their products.

Fifth, to make the most of opportunities from the WTO, businesses need a high-quality workforce with appropriate expertise and skills. However, Vietnamese businesses still face challenges in training and developing human resources, which affects productivity and competitiveness.

Vietnam’s WTO membership has brought opportunities for the domestic textile and garment sector to boost exports

What has the Ministry of Industry and Trade done to support businesses?

In recent years, the Office of the Ministry of Industry and Trade’s Interagency Steering Committee for International Economic Integration has intensified trade promotion by organizing and supporting businesses’ participation in international fairs and exhibitions to introduce Vietnamese products to foreign markets.

The Ministry of Industry and Trade also forecasts and analyzes market trends, helping businesses access updated information and prepare suitable business plans to avoid risks from international fluctuations.

To help businesses enhance competitiveness, the Ministry of Industry and Trade has cooperated with banks and financial institutions to support their access to preferential loans, especially small- and medium-sized enterprises. Additionally, it supports investments in research and development, as well as technology innovation, helping businesses improve productivity and product quality.

The Ministry of Industry and Trade also provides businesses with legal advice on FTAs, rules of origin, intellectual property, and trade defense regulations. The Ministry plays an important role in helping businesses protect their interests in international trade defense lawsuits. It has supported businesses in developing e-commerce and applying digital technology in production and trade by building a national e-commerce platform and organizing programs to support businesses in digital transformation.

The Ministry of Industry and Trade also coordinates with associations to build supply chains and link domestic businesses, helping create a sustainable business ecosystem, reduce dependence on foreign supply sources, and enhance the competitiveness of Vietnamese products in international markets.

Vietnam’s exports have grown robustly since it joined the WTO

What do you think Vietnam, as a WTO member, should do to promote economic development and international integration?

To promote economic development and international integration, Vietnam should further improve its policies and economic institutions to meet WTO commitments and international standards. Enhancing transparency and efficiency in state management will help create a favorable business environment and attract investment. Top priority should be given to improving the legal system and reducing administrative procedures.

At the same time, Vietnam needs to strengthen training to have a highly qualified workforce with good knowledge of the market and capable of meeting international requirements, focusing on vocational training, enhancing professional skills, and improving management capacity. Investment in technology and encouragement of innovation should be prioritized. The development of domestic supply chains should be emphasized to reduce dependence on foreign supplies, thereby increasing the resilience to global fluctuations. Strengthening connections with foreign businesses will help domestic companies integrate more deeply into global supply chains.

As Vietnam deepens international integration, domestic businesses will face trade defense lawsuits. The Ministry of Industry and Trade has been developing an early warning system to address this challenge.

Notably, Vietnam should continue its active participation in WTO activities and international economic forums to contribute opinions and protect national interests. To build an effective negotiation strategy, Vietnam should be thoroughly prepared to safeguard the interests of key industries and ensure sustainable development factors.