Viet Nam starts its ‘quantum jump’ but still some way to go

The “elements” of a draft report represent the first compilation of information supplied by Viet Nam together with its replies to questions posed by its negotiating partners, and a first formal attempt to define some of the terms of Viet Nam’s membership. This has been made possible by numerous documents that Viet Nam has supplied since the working party last met on 12 May 2003.

In this meeting, Viet Nam repeated its aim of joining the WTO by 1 January 2005, and asked for three meetings in 2004 to achieve this.

“We have tabled the third offer in goods with a further reduction by 4.5% [to 22%] in average tariff rate; an offer in services with market access commitments in 10 sectors and 92 sub-sectors,” said Trade Vice Minister Luong Van Tu, Viet Nam’s chief negotiator.

Speaking through interpreters, he said bilateral talks are “close to their final stage”. But in the negotiations as a whole, “we really expect negotiators to show more understanding and sympathy with the low-level developing economy and the modest trade of Viet Nam, by demonstrating flexibility, allowing preferential treatment and necessary transition periods as applied for in our action plans and offers, in order to smooth Viet Nam’s development progress and positively contribute to the WTO’s success.”

 

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Broadly

The working party’s discussion covered a large amount of detail. Two fundamental questions emerged:

Information supplied: Despite the large volume of documents supplied, has Viet Nam provided enough information on its existing trading regime and its plans — and does the information show that Viet Nam will comply adequately with WTO provisions? Several delegations said they need much more and clearer information. One questioned the wisdom of going ahead with a full fledged draft report when a lot of factual information is still lacking or unclear.

Viet Nam’s economic status: Should Viet Nam’s final commitments reflect it being a “low-income and highly indebted poor country” (IMF-World Bank terminology) with per capita income of around $400 per year, or also take account of Viet Nam’s potential as a competitive developing economy with great chance to develop rapidly?

Viet Nam, supported by some developing countries took the former view, which implies greater flexibility, more and longer transition periods, and to be allowed to subsidize non-agricultural exports under special provisions of the Subsidies Agreement (Art.27.2 and Annex 7), which normally bans them.

Others expressed sympathy with Viet Nam’s task but argued that the commitments should also reflect Viet Nam’s competitiveness and potential. As one put it, the terms should be “commercially viable” as well as “equitable”.

At the previous meeting in May, working party chairperson Seung Ho of the Republic of Korea said a “quantum jump” would be needed if Viet Nam is to join by 2005.

This time, several members said that the large amount of information supplied, including revised offers in goods and services, showed Viet Nam has begun its leap. But several warned that Viet Nam will still have to accelerate. “Our assessment is that Viet Nam is not yet where it needs to be”, said one. Several called for further improvements in the goods and services offers before the next meeting, which could be in the early months of 2004.

Whether or not Viet Nam meets its target will be up to Viet Nam itself, several said. Viet Nam urged members to be flexible.

 

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Some details 

Among issues raised in the discussion:

Agriculture: Viet Nam wants to bind specific export subsidies at existing levels and then reduce them in accordance with WTO provisions, arguing it needs them to protect its economy and that the levels will not be large. Several developed and developing members want Viet Nam to commit not to use export subsidies from the date it joins the WTO.

Customs valuation: Viet Nam is asking for a transition period for applying this agreement. Some members said Viet Nam should not discriminate. They said Viet Nam has a bilateral agreement with “one member” in which the agreement would be applied immediately.

Legislation: Viet Nam has supplied an action plan for legislation, with some laws to be submitted the National Assembly as late as 2007. Some members asked how this would work if Viet Nam is to join in 2005, and whether additional transitional periods would be requested. Viet Nam said it would ensure its actions comply with its membership commitments as soon as it joined, even if this conflicted with existing legislation.

State trading enterprises: Although Viet Nam insisted that its list of state trading enterprises is a comprehensive list based on WTO provisions, several members called for more information on these and a number of other state-owned companies to see whether they comply.

Import restrictions, quotas and bans: Several members, had concerns about these, including import bans on products that are produced domestically.

Other duties and charges (in addition to tariffs): Several members asked for more information on these, and for them to be eliminated or bound within Viet Nam’s goods “schedules” (i.e. lists of commitments).

Internal taxes: Viet Nam promised to abolish discriminatory taxes on imported cigarettes when it joins.

Trade-related investment measures: Viet Nam said it would eliminate all export requirements when it joins. It was responding to comments opposing a transition and questioning whether the IMF has provided data to show that there is a balance of payments problem.

Intellectual Property: One member wanted to know if Viet Nam is going to sign the Berne Convention. Viet Nam said it is close to doing so, but in any case will apply the relevant provisions of the Berne Convention when it joins the WTO.

Sanitary/phytosanitary measures and technical barriers to trade: Because some members have a large number of technical questions on these measures, separate “plurilateral” sessions (i.e. involving those working party members who are interested) will be organized in 2004.

  

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Next 

Plurilateral and bilateral meetings will continue in Geneva including a session on agriculture in the afternoon of 11 December.

The chairperson agreed to aim for more meetings in 2004, perhaps three.

 

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Background

Working party members: Argentina, Australia, Brazil, Brunei, Bulgaria, Canada, Chile, China, Colombia, Croatia, Cuba, Czech Republic, Egypt, EU and member states, Hong Kong, China, India, Indonesia, Japan, Rep of Korea, Kyrgyz Republic, Latvia, Lithuania, Malaysia, Myanmar, New Zealand, Norway, Panama, Paraguay, Philippines, Poland, Romania, Singapore, Slovak Republic, Slovenia, Switzerland, Chinese Taipei, Thailand, US, Uruguay

Chairperson: Seung Ho (Rep of Korea )

Viet Nam’s Working Party was established on 31 January 1995. The previous meeting of the Working Party was held on 12 May 2003. Bilateral market access negotiations have begun with many members.