Domestic businesses on the threshold of WTO (18/06)
06/08/2010 - 160 Lượt xem
Director of Tan Phu Cuong Garment Company Nguyen Ngoc Thuy said many businesses were delighted after the news that Vietnam and the US concluded bilateral WTO negotiations. In addition to generating jobs for labourers, the garments and textile sector requires an open market, and if it is restrained by quotas, it will find it difficult to develop. Once a huge market like the US is open, Vietnamese products will penetrate this market easily.
Currently, China – a garment rival of Vietnam - is under garment quotas from the US and experts advised Vietnam to make use of this opportunity before the quotas are removed completely in 2008. The slower the WTO accession process is, the more difficulties Vietnam will face, said the experts, adding that private businesses like Tan Phu Cuong will have more chances to develop after the country joins the global trade body.
Ly Xuan Hai, director general of the Asian Commercial Bank (ACB), said the bank has been preparing for the integration process for about three to four years, and the application of advanced technology and business strategies from foreign investors will be given top priority. Therefore, Mr Hai said that the trade pact signed recently with the US will pave the way for Vietnam to join the WTO, and that it will be good news for the financial sector.
Mr Hai acknowledged that integration will make competition tougher and banks will also suffer mounting pressure due to changes in the business environment. This means that banking services must be renewed to lure customers.
An official from the Saigon Commercial Bank (Sacombank) shared the view that Vietnam’s early entry into the WTO will help the financial sector access modern technology. However, the process will put big pressure on the bank as it now has only four branches and its prescribed capital is merely VND400 billion.
In the insurance sector, Nguyen Tien, director general of the Vien Dong Insurance Company, said the ratio of insurance fees to GDP is increasing and whether domestic investors or foreign investors get more benefit from the liberalization of the market is still an open question. The fact is that the life-insurance market is dominated by foreign investors, while domestic businesses control the non-life insurance market.
Under current regulations, the insurance sector still receives some subsidies, for example in providing insurance services for vehicles. However, this area generates limited revenue, said Mr Tien, adding that Vietnam should have tried to access international insurance services with large revenues such as those for ships and housing.
Mr Tien pointed out the fact that businesses do not know about Vietnam’s commitments to open the insurance market after the country joins the WTO, except for those under the Vietnam-US Bilateral Trade Agreement.
However, increasing the competitive capacity to international standards is a vital requirement for Vietnamese insurers, Mr Tien said.
For distribution businesses, joining the WTO means they will face numerous challenges. Dang Thanh Hung, head of the External Relations Department under G7 Joint Stock Company, agreed that consumers will benefit from the opening of the distribution market. But he said this process will present a big challenge for G7 despite the fact that the company has made thorough preparations for the process years ago.
Domestic distributors lack power and capital when competing with foreign investors, said Mr Hung. The time for Vietnam to join the WTO is drawing near and domestic businesses should seek suitable ways and prepare their human resources if they do not want to be left behind.
Source: VOV news
