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Home >> Business
UPDATED: 14:26, June 08, 2006
Vietnam garment, agriculture firms to face big WTO challenges
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After Vietnam joins the World Trade Organization (WTO), hopefully in late 2006, its garment and agriculture enterprises will face harsh competition, local media reported Thursday.

Upon Vietnam's accession to the WTO, competition on the domestic market will become fiercer as levies against imported garments and textiles are to be lowered to 10-15 percent from current 40-50 percent, according to the Vietnam Textile and Garment Association (Vitas), a Vietnam News newspaper said.

The local garment and textile industry currently has to import almost fabrics, garment-making accessories, machines, technologies and chemicals, all at high costs, while Vietnam has decided to abolish state subsidies to the industry to comply with requirements for the country's entry to the WTO.

"When Vietnam becomes a member of the WTO, difficulties imposed on domestic garment makers would likely outweigh opportunities," the newspaper quoted Vitas chairman Le Quoc An as saying.

Like garment companies, local agriculture enterprises will encounter fierce competition in the domestic market, since most of them are financially and technically poor.

Now, most of Vietnamese agriculture firms export raw and semi- processed products, and few are able to turn out processed items with sharp competitive edges, while many foreign rivals in developed countries still receive state subsidies in certain forms, said People's Army newspaper.

Out of 220,000 enterprises in Vietnam, some 16,000 engage in agriculture and rural development, around 70 percent of which operate effectively. Therefore, they should join hands in sharing experiences and markets, the newspaper added.

Vietnam gained garment and textile export turnovers of over 2.1 billion U.S. dollars in the first five months of this year, a year- on-year surge of 31.1 percent, according to the country's General Statistics Office.

Vietnam exported nearly 2.2 million tons of rice, 446,000 tons of coffee, 221,000 tons of rubber, 63,000 tons of pepper, 42,000 tons of cashew nuts, 31,000 tons of tea, and 9,000 tons of peanuts from January to May this year.

Source: Xinhua

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