WTO deal could hit agri-product exports

WTO entry commitments will help Vietnam attain good growth rates in its pivotal industries such as clothing, footwear, and other exports, said Jonathan Pincus, a senior economist from the economics department of UNDP Vietnam. “Given the removal of quotas, Vietnamese garments and textile products will have the opportunity to enter the larger world market. However, if the US Congress insists that it will approve permanent normal trade relations (PNTR) it will also move to restrict the growth and development of this industry in Vietnam. I am afraid it will create an unfortunate precedent for the implementation of our commitments ,” commented Pincus.
Moreover, the fact that US garment groups have asked to establish a mechanism to directly oversee the Vietnam garment industry is very likely to have adverse impact on the growth of the industry.Commitments on agriculture, according to Pincus, are challenges to local farmers.

However, they might not create negative changes because Vietnam agricultural products have been flooding onto the world market, Pincus said. It is forecasted that maize and cotton could be the most affected by the commitments.At present, the maize industry in the US, the worlds biggest exporter of maize, is subsidised to the tune of hundreds of millions of dollars every year by the US government. Given this colossal subsidy, maize exports from the US are more than easy to compete with Vietnam’s maize products. Consumers, processors, and livestock raisers will benefit while maize growers are likely to face harder times.Things might be similar in the cotton industry. The Vietnamese cotton industry is not very strong as production is small and it is low quality cotton at a high price. Given these weaknesses, cotton growers in Vietnam are finding it difficult to survive so it is certain that they could not compete with US growers who receive subsidies from their government.