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Vietnam to join world trade body World trade body admits Vietnam
(about 23 hours later)
Vietnam is preparing to become the latest country to join the ranks of the World Trade Organization (WTO). Vietnam is the latest country to be officially invited to join the ranks of the World Trade Organization (WTO).
On Tuesday, WTO member states are expected to vote in favour of Vietnam's entry, making it the 150th member of the global trade body. WTO member states have voted in favour of Vietnam's entry, which would make it the 150th member of the trade body.
The move will give Vietnam increased access to overseas markets, but require it drop high tariffs on imports. The move, which has to be ratified by Vietnam's parliament, will give it more access to overseas markets but force it to cut high import tariffs.
Vietnam has Asia's fastest economic growth after China, and its economy is set to grow by 7.8% in 2006. Vietnam is Asia's strongest performing economy after China. Its economy is expected to grow by 7.8% in 2006.
Mixed reaction
Vietnam, which has set out its intention to leave the ranks of the world's poorest countries by 2010, will become a WTO member 30 days after its National Assembly approves the move.
Foreign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger Le Dang Doanh, ministry of planning and investment Challenges facing VietnamForeign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger Le Dang Doanh, ministry of planning and investment Challenges facing Vietnam
The WTO vote on Vietnam's membership comes days before Hanoi hosts the latest Asia-Pacific Economic Co-operation summit. As a consequence of membership, it will have to reduce import duties from the current average rate of 17.6% to 13.8% within five to seven years of joining the WTO.
Communist-run Vietnam has been locked in more than 10 years of negotiations with the WTO over gaining membership. The lowering of import tariffs is expected to cut the state budget by some 21%.
The WTO's main negotiating group approved the terms of Vietnam's membership at a meeting in Geneva last month. After Vietnam joins the WTO, its textile, rice and coffee exporters will no longer be subject to other countries' import quotas.
Once the WTO ratifies Vietnamese membership and Vietnam's National Assembly approves the deal, the country will become a full member in 30 days. But banking, insurance and telecommunications industries have expressed some reservations over the prospect of increased international competition.
While key Vietnamese businesses such as shoe and clothing makers are keen for the country to join the WTO, banking and financial services firms have expressed some reservations over the prospect of increased international competition. Restrictions on foreign ownership of firms inside the country will be also be lifted.
"Foreign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger," said Le Dang Doanh, an economist at the ministry of planning and investment."Foreign competition is bitter medicine for Vietnamese enterprises, but it will help them become stronger," said Le Dang Doanh, an economist at the ministry of planning and investment.
Vietnam has set out its intention to leave the ranks of the world's poorest countries by 2010. Communist-run Vietnam has been trying to gain membership to the WTO for more than a decade.
World's poorest
Until now, Vietnam, with a population of 84 million, has been the second most populated country behind Russia outside the WTO.
The WTO's main negotiating group approved the terms of Vietnam's membership at a meeting in Geneva in October.
The news comes as chipmaker Intel has gained the right to boost its initial investment in Vietnam from $300m to $1bn, according to Vietnamese officials.
The WTO's invitation to Vietnam comes in the run-up to the Asia-Pacific Economic Co-operation summit, which will take place in Hanoi later this month.