Vietnam is a small country, located in Southeast Asia. After a long fought batter with America, it fully gained its independent in 1975. Between 1976 and 1986, Vietnam had a planned economy. However, after this unsuccessful period, in 1986, the government launched an economic renewal campaign, with the intention to bring the country closer to a market economy. During this period, people were encouraged to open up new businesses and foreign investments were also welcome.
In 2000, America signed a Bilateral Trade Agreement with Vietnam, and established a normal relationship between the two countries. This is a milestone to the Vietnamese economy. Since then, Vietnam has enjoyed continual growth and development. II. Vietnam and WTO On November 7, 2006 after 11 years of preparation, Vietnam became WTO’s 150th member. Vietnam’s access to WTO is considered to be a good thing for the most part. WTO helped boosting the country’s economy create a more inviting environment for potential investors.
Industries such as tourism and export are sure benefit from this WTO agreement. However, a lot of critics are worry about Vietnam joining WTO. Critics afraid that a good number of Vietnamese companies are not ready to compete with other foreign companies, and that they might loose their business. Moreover, in a free market, the poor might not be able to catch up with the fast pace development and therefore widen the rich and poor gap within the country. If not adjusted, Vietnam’s economy could suffer as the result of joining WTO. 1. Good side to WTO
Vietnam has made a remarkable turnaround as the country joined WTO. In the past years the country suffered from extremely high inflation and economic stagnation. Vietnam was not able to feed properly its population. Hundreds of thousands of the Vietnamese were expressing their dissatisfaction with their life conditions. As the government had returned macroeconomic stability and the country had become the second largest rice exporter in the world, membership in WTO provides the country with considerable advantage of expanding investment opportunities.
Bilateral Trade Agreement (BTA) between Vietnam and the United States that was signed in July 2000 became an important step towards Vietnamese membership in the WTO. WTO became a key step in Vietnam’s continuing economic reforms. WTO prescribes severe sanctions against member nations that do not realize their commitments. Therefore, WTO membership imposed strict conditions, enforcement and sanctions on Vietnam that leads to more foreign direct investment into the country.
It is likely WTO membership will strengthen the Vietnamese reform process even further: it will be difficult to ignore reform promises once they have produced thousands of jobs in Vietnam that may be lost if promises are not carried out. Actuality, the current Ten-Year Socio-Economic Development Strategy in Vietnam puts the goal that the export growth rate should be twice as high as the planned 7. 5 per cent GDP growth rate during the period 2001-10: if the goal is accomplished, the ratio of exports to GDP will go beyond the limit of 90 per cent by 2010 (Vu Tung 483).