A foreign-invested company in Dong Nai Province. The participation in the World Trade Organisation has strenthened Vietnam's position in global value chains. — VNA/VNS Photo Hong Dat

 

Vietnam's signing of the World Trade Organisation (WTO) accession protocol in Geneva on November 7, 2006, and its subsequent entry as the organisation's 150th member on January 11, 2007, marked a pivotal turning point in the nation's development. Over the past 18 years, this membership has strengthened Vitenam’s position in global value chains while demonstrating its strong commitment to international economic integration.

 

Important milestones in global economic integration

 

The WTO, established on January 1, 1995, stands as the sole international body governing global trade rules. With 165 member nations accounting for over 90 per cent of the global trade, its core mission is to promote fair and free trade among nations, reduce trade barriers, and support members' economic development.

 

The organisation operates under six key agreements covering goods trade, services, intellectual property rights, dispute settlement, trade policy reviews, and WTO establishment protocols. Its fundamental principles of non-discrimination, transparency, and fairness, among others, have encouraged member states to open their markets and enable domestic businesses to compete internationally. The development of the WTO has also pushed its members to develop sustainably, improve their legal basis, and complete economic and financial system in accordance with the requirement of the international integration.

 

Vietnam's path to WTO membership spanned more than a decade, from 1995 to 2006, requiring complicated bilateral and multilateral negotiations. The country underwent significant legal reforms and economic restructuring to meet WTO requirements before securing the membership.

 

The country’s signing of the WTO accession protocol in Geneva in 2006 represented a watershed in its international economic integration. The nation's rights and obligations as a WTO member took effect on January 11, 2007.

 

The decision to join the WTO not only ushered in a new era in Vietnam's international trade relations but also created significant opportunities for domestic businesses. The membership provides Vietnam with a foundation for comprehensive economic policy reforms, export market expansion, and enhances competitive edge. However, the process also challenges Vietnamese enterprises, requiring them to improve product quality and better prepare to meet stringent international market standards.

 

Affirming position in regional, international arenas

 

Vietnam’s efforts to open its market, promote institutional reforms, and fortify international cooperation have paid off, with exceptional trade growth and substantial foreign investment that have contributed to creating a facelift for the country’s economic landscape as well as cementing its position in the regional and international arenas.

 

Since its accession to the WTO, the country has obtained significant trade achievements. Its export revenue rose from over $48 billion in 2007 to more than $371 billion in 2022.

 

Vietnam has emerged as a significant player in global trade, currently ranking among the world's top 20 trading economies. The country has maintained a trade surplus for eight consecutive years, increasing from $1.77 billion in 2016 to over $28 billion in 2023.

 

Manufacturing and high-tech products now dominate exports, accounting for 85 per cent of total export value in 2023. Telephones, electronic components, machines, equipment, and textile have been the key export items, contributing to the country’s trade success and helping improve the domestic firms’ competitive capacity in the international market.

 

The WTO membership has not only accelerated Vietnam’s trade growth but also expanded its economic partnership and diversified its export market. As of October 2024, Vietnam had signed and carried out 17 free trade agreements while negotiations are underway for two others. Several new-generation trade pacts such as the EU – Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership have secure Vietnam’s broader access to major markets, thus boosting the competitiveness of its exports.

 

According to the General Statistics Office, progress has been seen in the trade ties with the EU, the US, Japan, the Republic of Korea, and China, making Vietnam an important player in the Asia – Pacific region.

 

Besides, the WTO accession has been significant to the country’s foreign direct investment (FDI) attraction. In 2008, US$36.6 billion of FDI was injected to the country, a three-fold increase from the previous year. The figure in 2023 was $36.6 billion, solidifying the country’s position as a premier investment destination in the world. Tech giants such as Samsung, Intel, LG, and Foxconn have established production bases in Việt Nam, integrating the country deeper into global supply chains.

 

Additionally, the engagement in the WTO has push ahead the country’s strong reform of its legal system and economic institutions to enhance transparency in economic management, better business climate, and improve its position internationally.

 

According to the World Economic Forum, Vietnam’s Global Competitiveness Index (GCI) moved up 13 places in the 2007 - 17 period, from the lower half of the rankings to the upper. In 2019, its GCI improved 10 places to the 67th position among the 141 economies.

 

As the integration process has brought challenges to the country, including trade defense measures from major markets like the US and the EU, experts suggest Vietnam strengthen its trade defense capabilities by providing training for officials and enterprises. Besides, they said it is necessary to shift from assembly-based manufacturing to higher value-added production to improve the country's competitive edge and mitigate impact of the international trade policies. — VNS

 

 

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