Many businesses are expected to invest in trade and service sectors, which are considered potentially lucrative fields, particularly after Vietnam is admitted to the World Trade Organisation (WTO).
During its WTO negotiation process, Vietnam has strongly committed to opening up its market, boosting trade and service liberalisation and creating more favourable conditions for investment activities. This is likely to lure a new wave of foreign investment to the service sector, including key services such as insurance, distribution, banking and telecommunications, thereby boosting competition among businesses.
According to the Ministry of Trade, to join the WTO, Vietnam must ensure the participation of foreign service suppliers in investing and operating in the service sector to a certain level. Opening up the trade and service market is always a hot issue at bilateral and multilateral rounds of WTO negotiations.
Deputy Minister of Trade Luong Van Tu, who is also head of the Vietnamese WTO negotiation delegation, said that in its latest WTO offer, Vietnam has committed to opening up the country’s market widely, nearly equivalent to China’s commitments. However, it is essential to make further consideration to open up the market more intensively, Mr Tu added.
The Trade Deputy Minister also noted that in its fourth WTO offer, Vietnam pledged to open up 92 out of 155 areas in 10 out of 11 service sectors, including the business, information, financial and banking, distribution, construction, social and healthcare, tourism, cultural and entertainment, transport, and education sectors. In fact, Vietnam has committed to opening up almost of its all service sectors, excluding the environment, which has not been offered at the moment. Therefore, it is likely to lead to a new wave of investment in key services such as telecommunications, banking and insurance, thus increasing competition among businesses after Vietnam joins the world’s largest trade organisation.
In its fourth WTO offer, Vietnam also pledged to reduce tax rate, implement non-tariff barriers and gradually abolish subsidies relating to quotas, import licences and required localisation rates.
The participation of foreign investors in trade and service sectors will help improve the competitiveness of businesses and provide Vietnamese enterprises with more opportunities to learn more about management and customer services, as well as boost Vietnam’s policy reform and increase its management capacity.
Previously, when Vietnam opened its insurance market, there were many concerns about unbalanced competition between large international insurance groups and small-scaled domestic enterprises. However, the real situation has proved that thanks to competition pressure, domestic enterprises have developed strongly, increased their competitiveness and secured a firm foothold in the market.
In addition, Vietnam has also pledged to facilitate investment activities relating to trade. So far, the country has followed the Agreement on Trade-Related Investment Measures (TRIMs) completely in order to root out investment barriers.
At a recent investment co-operation forum in Hanoi, Deputy Prime Minister Vu Khoan affirmed that Vietnam will continue to perfect its investment environment to attract more foreign investors and increase competitiveness. The country will focus on improving the quality of its human resources, upgrading infrastructure and ensure the transparency and consistency of investment policies.
Currently, the National Assembly has given a priority to a law-building programme to meet the requirements for international integration and economic development. The Government is mobilising capital through issuing bonds for infrastructure development and calling for more investment under the BOT form, in a bid to modernise infrastructure as soon as possible.
VOV - (23/11/2005)