Our Party has taken the initiative to integrate into the global economy and renew its thinking about external economy on the foundation of the guidelines, "Vietnam is prepared to be a friend and reliable partner of all countries in the world community, striving for peace, independence and development." Documents released by the 8^th, 9^th and 10^th National Party Congresses all confirmed the necessity of accelerating the regional and international economic integration process on a larger scale and at a higher level.

By implementing the open external policy and taking the initiative in global economic integration, Vietnam has gradually joined international financial and economic institutions, and cooperated with regional and world countries and economies for mutual development. Since 1992 and 1993, Vietnam has re-joined the World Bank (WB), International Monetary Fund (IMF) and Asian Development Bank (ADB), and big donors have resumed bilateral and multilateral Official Development Assistance (ODA) to the country.

Vietnam has achieved major successes in its renewal process and escaped from a socio-economic crisis. The year 1995 saw a number of important external economic events. Vietnam joined the ASEAN and committed to implement the ASEAN Free Trade Area (AFTA), signed a Cooperative Agreement with the European Union (EU) and normalised relations with the US and applied for WTO membership. In 1998, Vietnam officially became a member of the Asia Pacific Economic Cooperation (APEC). Eight years later, it hosted the 14^th APEC Economic Leaders? Meeting in Hanoi in November 2006.

Over the last 20 years, Vietnam, with its open external policy and active integration into the world economy, has gained notable achievements in its renewal process. From being blockaded and sanctioned, Vietnam has persevered in its reform policy to strive forward. From 2001 to 2005, it attracted nearly US$15 billion of ODA and US$20 billion of FDI, which were an important resource for socio-economic development, poverty reduction and a pre-requisite for further development in the trend of industrialization and modernization.

In addition to this, international trade is considered a breakthrough. In 2005, Vietnam obtained an export turnover of more than US$30 billion, a sixfold increase against 1995, and officially integrated in the global economy with seven export items, which earned more than US$1 billion. In 2006, Vietnam expects to export more products to join the "US$1 billion Club". Furthermore, with an export turnover accounting for approximately 60 per cent of its GDP, Vietnam?s economy is considered broadly open.

By signing several bilateral trade agreements, particularly that with the US and multilateral agreements with regional organizations such as ASEM, APEC and GMS, Vietnam has learnt to participate equally in international trade.

The WTO is the world?s biggest trade organisation. Joining the WTO means joining the biggest global "playground", not a trade or a business association to enrich or impoverish in its deals. It?s a fair playground where everyone is equal in both opportunities and challenges. The WTO only creates an environment with "playing rules", and opportunities to win or to lose, to be enriched or to be impoverished depend on the rule-abiding "playing methods" of partners in the "game" to minimize disadvantages, and fully exploit opportunities and their competitiveness. Players have to accept unfair competition with partners of different categories to find a "common way" and "individual way" to deal with their partners. If players all have good strategies and solutions, they will all be beneficiaries and winners.

Abiding by WTO commitments will bring Vietnam new opportunities and advantages. However, these opportunities and advantages are potential and will only be realised by our initiative.

With this obvious awareness, we can see the following opportunities and advantages for Vietnam:

First, export activities will be accelerated after Vietnam solves issues of accessing WTO goods and servicing markets and realizes an export-oriented economic strategy. The country has developed a series of industries, which have a big production capacity, are highly competitive and have a big export turnover. However, due to obstacles preventing Vietnam from accessing some markets and unfair treatment, our exports remain limited. After joining the WTO, Vietnam will have opportunities to increase the export of potential items as a result of negotiations on reducing tariff and non-tariff barriers, accelerating market access and WTO?s rules on trade liberalisation and facilitation.

Second, Vietnam?s economy will become more effective and competitive. To reduce tariffs, remove the non-tariff barriers, and open the servicing market will make Vietnam?s investment environment more competitive. Under the competition pressure, domestic businesses have no choice but to overcome challenges to improve themselves to make the national economy more effective and competitive. In addition to this, tariff reduction and non-tariff barrier removal will help businesses access inputs at a more reasonable cost and have more opportunities to strengthen their competitiveness in the domestic and external markets.

Third, global economic integration and accession to the WTO will give Vietnam a chance to refine its policy and legal system to be more transparent, sustainable and predictable; finalise its mechanism for a market economy, administration and domestic enterprises reform, receive scientific and technological knowledge and management skills, contributing to the training of capable managers and business people to generate a position and strength for Vietnam in the international arena. Accessing the WTO, Vietnam will no longer be treated as a non-market economy as it is in current trade disputes. Vietnam will have equal status with other countries in the global trade policy-making process and an opportunity to participate in building a more equal and logical international trade cooperative framework.

Fourth, Vietnam has the advantage of human resources, a skilled, intelligent and industrious workforce, a strategic position on the regional and international economic map, and a big reserve of rich and diverse natural resources. If these strengths are fully tapped, Vietnam will overcome all difficulties and challenges to create competitiveness in the new situation and gain a strong foothold in the international market.

Fifth, thanks to a healthier and more open competition environment, and transparent legal foundation and tools, Vietnam?s businesses, particularly those of small and medium sizes can protect their legal rights and activities in trade competition, in particular, they can use the WTO?s Dispute Settlement Mechanism. By joining the WTO, depending on their activeness, businesses will have opportunities to improve their competitiveness and expand their market. Foreign businesses investing in Vietnam will enjoy the same benefits. This is an opportunity as well as a challenge.

Joining the WTO, we enjoy many opportunities and advantages while confronting difficulties and challenges and some adverse impacts.

First, businesses, production sectors and services are less competitive. As our economy is less developed and still shifting while the market economy is in the initial period with basic factors not consistent and fully developed yet, ability to do business and competitiveness of Vietnam?s goods and services are very poor. Our international outlets are very limited and easily annexed. In the context of global free trade and investment, Vietnam is in a weak position likely to become a place of consumption for foreign countries. In order to have global outlets, Vietnam should open our domestic market to other countries. This is a big challenge to Vietnamese businesses because most of them are of small and medium size and less competitive.

These challenges require domestic enterprises to adopt a suitable training strategy and appropriate mechanism to attract human resources. Meanwhile, the State should develop a mechanism to help businesses improve their competitiveness and strengthen their position in the domestic market and not to lose in their home playground. The State should strengthen macro-management, develop a legal and policy system and monitor their enforcement. It should empower business associations to directly manage their activities so that they can protect themselves in order to generate unity strength for development.

Basically, Vietnam?s businesses are operating in a fair legal environment, which is gradually compatible with WTO rules and international practices, particularly the Enterprise and Investment laws. However, as the businesses are different in size, management capacity, adaptability and competitiveness, their economic effectiveness will vary. State-owned enterprises should accelerate their restructuring process, improve technical standardisation, increase investment in renewing and adopting high technologies and equipment, find appropriate solutions to approach foreign partners and markets and share information to become more competitive.

In order to access international goods and servicing markets, Vietnam should focus on highly competitive industries for export. We should improve the quality and processing value of agro-forestry and fishery products, further invest in technologies and management to increase the added value of traditional products such as garment, textile and leather wares, and encourage high-tech and potential products such as electronics and information technology. Meanwhile, efforts should be made to enhance trade promotion and market surveys to help businesses find international outlets. Furthermore, it is important to further consolidate overseas trade representative agencies, associate their activities with those of businesses, complete the legal corridor and provide further training for businesspeople to help them adapt to the new investment and business environment.

Tariffs have the strongest and primary impact on businesses and industrial sectors? competitiveness, operation and development. By joining the WTO and free trade areas, Vietnam must gradually open its goods market through import tariff reduction commitments while abiding by WTO rules on non-discrimination and transparency for domestic businesses. Opening the market and reducing tariffs in a short period of time will strongly impact on State budget revenue as around 25 per cent of the current State budget revenue comes from export and import tariffs. To take advantage of the positive aspect of this process, Vietnam should develop the domestic economy to accelerate economic growth and compensate by increasing domestic revenues.

Regarding goods and services, the first question to consider is how to confront market opening and tariff reduction after joining the WTO, when most of our products are either gaining a foothold or entering the international market. It can be said that this challenge, at different levels, is facing all sectors including agricultural, industrial, pharmaceutical and servicing products, in which the servicing sector will confront the most difficulties. The servicing sector has, so far been strongly protected, and many investors are waiting for more opportunities on opening Vietnam?s servicing sector compatible with WTO commitments. While opening the market, Vietnam has also committed to create more favourable conditions for investment in trade than in bilateral trade agreements (BTAs). The opening of the servicing market will draw in new investment in different economic sectors including distribution, insurance, banking, finance, transportation and telecommunication. This is an opportunity and a challenge as well.

Second, issues relating to macro policies and completion of the legal framework. As Vietnam shifts to the market economy and after joining the WTO, some of its macro economic indications will depend strongly on regional and international developments. The exchange rates, inflation, balance of payment and budget deficit will develop unpredictably, which requires close and flexible guidance. Although Vietnam has exerted great efforts to complete its economic and trade laws, there remains much to do after joining the WTO. First of all, the country must continue to refine competition rules to ensure a healthy and fair competitive environment to encourage businesses? dynamism and adaptability, which is a decisive factor of the economic restructuring and human resource placement process. As Vietnam?s commitments to open the market follow a roadmap, the legal refining process will take place over a long period.

We are trying to review and finalise our policies and mechanisms. In reality, many policies are not compatible with international rules, which lead to troublesome problems in trade transactions, and sometimes lost opportunities, money and products. The investment policy should gradually reduce protection of import-substituted sectors and encourage investment in export-oriented sectors. The policy on protectionism and subsidization, if it is allowed, should be carefully considered to focus on some sectors and implemented in a certain period. Recently, Vietnam has actively prepared for WTO accession and developed a post-WTO plan and conditions to realise the obligations of a WTO member. It has accelerated the law-making process, reviewed and amended rules, especially trade and investment rules to ensure the compatibility between Vietnam?s legal documents and international commitments. Vietnam has also accelerated action programs to implement WTO agreements such as Import Licensing (IL), Trade-Related Investment Measures (TRIMS) and the Application of Sanitary and Phytosanitary Measures (SPS) agreements.

Third, to predict non-economic negative impacts, especially social-related issues such as income, labour, employment, income gap between different social classes and different areas, environmental issues, and national identity preservation. Social welfare issues will emerge due to the reduction of employment in various sectors, and bankruptcy of ineffective businesses. This is a common problem facing all new WTO members.

Fourth, a challenge of human resources. Vietnam is required to have competent staff at different levels, from central to grassroots, from State agencies to businesses. This is also a big challenge to Vietnam as a majority of our public servants and employees lack knowledge and experience of managing an opening market with foreign factors. Without careful preparation, those challenges will become a chronic problem, which will be hard to resolve. To take advantage of the WTO?s Dispute Settlement Mechanism and effectively participate in its future negotiations, Vietnam should develop capable and experience staff who comprehend WTO rules and have international negotiation experience and skills. During the recent negotiations for WTO accession, Vietnam has gradually built this contingent but in general, capable staff are still lacking.

Human resources of businesses including managers, experts, negotiators and market promoters are also the most important factor to help them become more competitive, and expand their market for further development.

Accession to the WTO is not a sudden event, but the result of a difficult negotiating period and preparation of a great deal of work at all levels. So, implementing WTO commitments will be a process which requires the effort of all levels, sectors and localities, particularly creative labour and close cooperation between Vietnam businesses to generate greater internal resources for faster and more sustainable development. Achievements of the renewal process, national economic development and international economic integration in recent years have confirmed that the process is inevitable and a correct choice of our Party and people.