Vietnam the World Trade Organization's 150th member
Press release 9/2007
11 January, 2007
Vietnam will become a member of the World Trade Organization, the WTO, on 11 January 2007. The Accession Agreement consists of an Accession Protocol, a Working Group Report and a package of commitments concerning Vietnam's trade in goods and services. Vietnam has undertaken to comply with all multilateral WTO agreements as from its accession, which has required several amendments in its legislation.
Business life in Finland and the EU is considered to benefit both directly and indirectly from Vietnam's accession to the WTO. However, it is hard to assess the extent of the impacts. Thanks to the package of commitments linked with the WTO membership, Vietnam and its WTO partners will be able to enjoy of a more predictable and stable operating environment. One welcome example from Finland's point of view is elimination of import quotas on paper products.
During the accession negotiations, the compatibility of Vietnam's own legislation with the WTO rules was examined and Vietnam conducted bilateral negotiations on market access with the other WTO members. The last bilateral session was concluded in May 2006 with the United States of America. A negotiation deal with the EU was reached on customs tariff bindings and commitments related to trade in services as early as in October 2004. Vietnam's membership of the WTO entered into force 30 days after it had informed the WTO that it had ratified the agreement domestically in December. The accession process started at the beginning of 1995, which means that the process lasted for 12 years.
There will be a transition period, during which Vietnam will reduce its tariff bindings on industrial and fishing products to an average of 12.4%. The former applied tariffs were about 17.5%. Some reductions on tariff bindings are applied without any transition period, and a fairly wide range of 1 to 12 years is applied to some products. As far as agricultural products are concerned, the average bound tariffs will decrease to 21%. Prior to its membership of the WTO, Vietnam's applied tariff level in agriculture was 27%.
Vietnam has also signed an Information Technology Agreement (ITA), which eliminates tariffs and tariff-related fees on information technology products. Furthermore, Vietnam grants full trading rights to companies in foreign ownership with certain exceptions.
The key area of interest in Vietnam's WTO negotiations was trade in services, and commitments have been made on several service sectors, such as: professional services, courier services, telecommunication services, construction services, distribution, environmental services, tourism, financial services and maritime transport.
From the EU's perspective, other significant commitments undertaken upon accession include changed excise duty on spirits, removal of the import ban on used motor vehicles, lower export duties on metal scrap, and elimination of all subsidies that are forbidden in the WTO.
Further information: Commercial Counsellor Mary-Anne Nojonen, Department for External Economic Relations, tel. 09 1605 5560