Vietnam's official entry into the World Trade Organization is an important step in the country’s participation in the global trade system, and also a potential boon to U.S. manufacturers.
Vietnam will become the 150th member of the WTO, it was announced Thursday. As part of its admittance, the country will reduce tariffs on more than 94 percent of industrial and consumer goods, as well as allow previously banned products into the market.
In a statement, the U.S. Department of Commerce said Vietnam’s entrance will “enhance export opportunities through government transparency and protection of intellectual property.”
For U.S. manufacturers, this spells new opportunities.
“Vietnam is one of the fastest growing markets in Southeast Asia, increasing over 50 percent since the 2001 Bilateral Trade Agreement,” said National Association of Manufacturers Director of International Trade Policy, Christopher Wenk. “There are no drawbacks here now that Vietnam is part of a rules-based trade system.”
The two industries that likely have the most to gain from the announcement are high-tech products and motorcycles.
“Tariffs will now be eliminated on IT products, like computers and cell phones,” Wenk said. “There has also been a ban on motorcycles until this point, and they will now be allowed under the agreement to join the WTO.”
Wenk anticipates the Vietnamese economy will continue to grow and that small and medium-sized manufacturers will have the most to gain from access to this new market. He said NAM will begin to reach out to its membership to alert them to the new economic opportunity.
“The backbone of the U.S. economy is small- to medium-sized companies,” Wenk said. “It is important to clarify that the U.S. did not have to give up anything when Vietnam joined the WTO. Vietnam had to make the concessions.”
Steve Norton, a spokesman for the U.S. Trade Representative, also sees the deal as a positive for American manufacturing.
Vietnam "is transforming itself very rapidly,” Norton said. “This is very exciting.”
One of the main issues for gaining access to the Vietnamese market is the agreement for greater transparency for U.S. exporters.
“Regulatory burdens can be sometimes extremely complex,” Norton said. “Greater transparency for U.S. exporters will be key.”
Another key issue for the Vietnam admittance to the WTO was protection of intellectual property rights.
“IPR is a challenging issue and it is also a major concern for U.S. manufacturers for obvious reason” Norton said. “Vietnam has committed to a meaningful IPR enforcement regime and we will work very closely with them to make sure they abide by their agreements.”