HANOI, Vietnam (AP) – Vietnam’s legislature ratified the country’s entry into the Word Trade Organization (WTO) on Tuesday, paving the way for the communist nation to become the global trade body’s 150th member.
Vietnam’s membership will take effect Dec. 28, 30 days after the National Assembly vote, opening the gates to increased foreign investment and trade in Southeast Asia’s fastest-growing economy.
The move was approved by a vote of 444-3, with two abstentions.
Despite the overwhelming support, lawmakers urged the government to ease the challenges that globalization will pose to Vietnam.
“Once the opportunities emerge, the weaknesses of the economy will also be exposed,” said legislator Vu Tien Loc, who is also president of the Vietnam Chamber of Commerce and Industry.
Loc said the government must speed up its efforts to reduce bureaucracy and improve Vietnam’s infrastructure so that the country’s businesses can compete against an influx of foreign competition.
Legislator Nguyen Ngoc Tran from southern An Giang province expressed concern that the gap between the rich and the poor could widen as a result.
“The government should pay more attention to this problem,” he said.
Over the last two decades, communist Vietnam has gradually implemented free-market reforms, winning praise from foreign investors whose interest in the Southeast Asian country has been growing. Foreign investment has surged by nearly 50 percent in the last year, rising to more than $8 billion so far this year.
In its WTO negotiations, Vietnam agreed to lower many tariffs and open previously protected economic sectors to foreign investors, such as banking, financial services and telecommunications.
The country’s WTO membership “marks an important milestone in our international economic integration, and international recognition of the success of Vietnam’s economic reforms,” President Nguyen Minh Triet said in a televised address before the assembly vote.
Trade Minister Truong Dinh Tuyen told lawmakers that WTO membership will bring both benefits and costs. Increased trade and investment will boost the economy, he said, but fierce foreign competition is likely to bankrupt some companies and cause social dislocation.
“Some people and businesses will face difficulties,” Tuyen said, pointing out that jobs will inevitably be lost. “There could be the risk of creating complicated social problems.”
Joining the Geneva-based WTO will provide Vietnam with a neutral broker in trade disputes, he said, assuring that its disagreements with trade partners will be resolved fairly.
Vietnam has faced dozens of antidumping cases brought by the United States and the European Union, which have accused the country of selling goods at unfairly low prices. Vietnamese officials have complained that its bigger, more powerful trade partners have issued unfair rulings against them in disputes over seafood and shoe exports.
Vietnam’s economy has grown by an average of more than 7 percent a year for the last decade, one of the fastest rates in the world.