vietnam on the way to become a market economy

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Vietnam and its non-market economy

         Eleven years ago, Vietnam started a long journey to World Trade Organization. United States, the main obstacle on the progress to negotiate for Vietnam to join WTO, became the last country to sign the bilateral trade agreement (BTA) with Vietnam in 2001. According to the multilateral commitments, Vietnam will be designated as a ‘non-market economy’ (NME) for a period of 12 years after its accession to the WTO, not later than 31/12/2018, or until it is able to meet the economic criteria for a “ market economy” (ME) designation.  

        It seems unfair that Vietnam is classed as a non-market economy after twenty years of reform. This in effect makes it difficult for Vietnam to defend itself from anti-dumping allegations lodged by the EU and the US. But why does this happen to Vietnam even though it has tried a lot? Let see the six factors which determine  Vietnam’s economy a NME or ME:

        • Currency convertibility

        • Wages are determined freely

        • Joint ventures and business investments by foreign companies in Vietnam

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        • Government ownership

        • Government price controls and allocation of resources

        • Other fators deemed appropriate.

        And hereby is the reasons for Vietnam’s designation as a NME according to Ministry of Commerce of The United States. It said  that Vietnam’s economy is still on the way to reform and has not really met the criteria for a market economy due to the antidumping law with the following expressions:

        • Firstly, Vietnam’s local currency or VND is not completely freely convertable in the capital market. At present, the VND is not favoured in transactions and payment, meanwhile, the dollarisation is ...

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