VINACHEM

In a keynote address to the 2014 WTO Public Forum, Ambassador Nguyen Trung Thanh, Vietnam’s permanent representative to the United Nations, encapsulated developments in the country’s movement to a full market economy.

“As a consequence of innovation and new technologies, the Southeast Asian nation is experiencing solid economic growth and job creation and is rapidly integrating deeper into the global economy,” Thanh said.

New tools and technologies are changing the traditional way of doing business and are leading to the development of a whole new digitalized economy, with expanded investment opportunities.

Since Vietnam’s WTO admission 15 years ago, the country’s total trade turnover has burgeoned more than 10-fold at a relatively fast paced average rate of 25% per year. The year 2012 marked a milestone with the recording of the first trade surplus in the past two decades, Thanh said.

He reported in the first 8 months of this year, Vietnam’s trade volume hit US$191,400 billion, up 12.5% on-year. Of the figure, exports contributed a record US$97,230 billion, while imports were also at an all time high of US$94,160 billion.

Vietnam has entered its third year of stabilized macro-economy with a low inflation rate, growing trade,strong FDI inflow and stable foreign exchange rate.

However, rapid economic growth in previous years was impeded by the cautious restructuring of the banking sector and State-owned enterprises (SoEs).

Asides this, economic growth in an open market mechanism is imposing a burden on natural resources, sustainable environmental development while widening the gap between rich and poor, and between rural and urban areas.

However, Vietnam is facing the risk of middle-income trap and still lacks capable strategic policy makers, economists and skilled workers, Thanh noted.

The Vietnamese Ambassador hailed the remarkable contributions of foreign investors, including those from the EU member countries, to Vietnam – one of the most dynamic nations in Asia with abundant labour force and strong purchasing power.

The Government of Vietnam is committed to boosting economic reform, ensuring politic stability, and creating a social consensus on economic policies.

Thanh described the EU as one of the most important trade partners and investors of Vietnam. Bilateral trade ties have enjoyed fine development over the past decade, noting that the textile cooperation agreement signed with the European Community in 1992 was one of the country’s first trade pact with a European partner.

He also mentioned some key agreements and incentives provided by the EU, such as the most favoured nation (MFN) treatment and the Generalised System of Preferences (GSP), aimed at creating favourable conditions for developing countries to enter the EU market.

Notably, in October 2012, the EU launched reformed GSP programme, providing more preferential tariffs for several Vietnamese key exports, including footwear.

According to the General Statistics Office (GSO), Vietnam’s export volume to the EU market saw an increase of 4.2% in 2013. The EU ranked sixth among largest investors in Vietnam last year, with 71 newly-licensed projects.

In an attempt to lift bilateral ties to a higher level, the two sides officially signed the Partnership and Cooperation Agreement (PCA) in September 2012 after five-year negotiations. They are also conducting official negotiations for the early signing of the EU-Vietnam Free Trade Agreement (EVFTA) by the end of 2014.

Ambassador Thanh proposed Vietnam expand bilateral trade negotiations, scrutinize overall plans on the industrial sector, and priotize developing information and technology (IT) and support industries. The country should also support businesses in market research and loan access to increase added value and develop high-quality human resource.

Entitled “Why trade matters to everyone”, the WTO Public Forum 2014 had 68 sessions with the participation of many leading economists, senior officials, and representatives from non-governmental organizations and other international organisations.