Nearly 32 years after Vietnam’s communists chased U.S. forces from their soil, the southeast Asian nation joined the capitalist club as the World Trade Organization’s 150th member on Thursday, signaling its emergence as one of the world’s fastest-growing economies.
“Welcome, Bienvenue, Bienvenido, Vietnam” read a giant blue banner across the across the WTO’s Geneva headquarters.
Entry for Vietnam _ whose economy has grown by an average of more than 7 percent for the last decade _ comes as good news for the commerce body, which is embarking on an uncertain year as global free trade talks remain suspended and countries appear unlikely to agree on a deal.
Vietnam’s entry, the terms of which were agreed in November after 11 years of negotiations, opens the door to increased trade and investment in the country. For its industries, it will mean increased access to foreign markets and a neutral arbiter to hear disputes that arise with its bigger, more powerful trading partners.
While Vietnam will also benefit from the increased demand for goods and services that more foreign investment brings, it will have to forfeit a number of subsidies and tax breaks previously granted to Vietnamese companies.
With a population of 84 million people, Vietnam was the second most populous country behind Russia still outside the WTO. Russia has been seeking membership for over a decade and is probably still at least a year away.
Other countries trying to join include Algeria, Belarus, Ukraine, Azerbaijan, Lebanon, Bosnia-Herzegovina, Libya, Iraq, Serbia and Syria. A working group was established in 2005 to begin the long process for Iran to accede, but political tension has prevented work from beginning.
Before Vietnam, Saudi Arabia was the last country to join the WTO, entering in December 2005.
Vanuatu concluded negotiations in 2001, but it later expressed reservations about its membership terms and the government has yet to take further action to join. Tonga, another Pacific Island nation, also has completed talks, but its parliament has yet to ratify the deal approved by the WTO in 2005.
Over the last two decades, Vietnam has gradually implemented free-market reforms, winning praise from foreign investors whose interest in the country has been growing. But the government continues to exercise direction over many large, state-owned companies.
Foreign direct investment in Vietnam reached a record US$10 billion (euro7.7 billion) last year.
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