Samson: Việt Nam attends 12th WTO Ministerial Conference in Geneva
16th June, 2022
Minister of Industry and Trade Nguyễn Hồng Diên joined trade ministers and senior officials from 164 member countries of the World Trade Organization (WTO) at the 12th WTO Ministerial Conference (MC12) that took place in Geneva, Switzerland, from June 12-15.
The Vietnamese delegation also included Ambassador Lê Thị Tuyết Mai, Permanent Representative of Việt Nam to the United Nations, the World Trade Organization and other international organisations in Geneva, and representatives from the Ministry of Industry and Trade, Ministry of Foreign Affairs, and Ministry of Agriculture and Rural Development.
Addressing the event, Diên affirmed support for the multilateral trade system and Việt Nam’s efforts to join with other WTO members to deal with global economic challenges. However, the minister pointed out several shortcomings of the organisation, including internal ones identified during MC11 that had hardly been resolved.
“We should also be aware that it is now time for the WTO to undertake fundamental reforms to maintain and strengthen its three core pillars whilst adapting promptly to the profound changes and new requirements of the era. Never have we observed the issues on healthcare, environment, food security, and supply-chain disruption become more pressing and urgent than today,” he said.
"It is therefore imperative that the WTO members confront the root causes of these challenges and explore appropriate solutions so that the WTO can overcome them and continuously improve its operational efficiency."
He said that the WTO should not be limited to providing an effective negotiating platform, but also a contributor to solving global crises, whilst maintaining and ensuring a level-playing field in world trade. He highlighted that since joining the WTO, Việt Nam had been and would continue to be wholeheartedly committed to the multilateral trading system.
“We are ready to cooperate with WTO members in maintaining and strengthening the multilateral system with WTO at its core, in promoting and facilitating trade and investment, as well as in ensuring the vital supplies of goods and materials in the region and across the world. At the same time, Việt Nam is willing to stand with other members in ensuring sustainable development for the world economy, bringing inclusive benefits while striving to provide pragmatic support to the developing and least developed members,” he said.
Việt Nam attaches great importance to key WTO negotiations such as fisheries and agricultural subsidies, he said, expressing hope that the members would focus on topics of urgency and interest such as securing the supply of food and essential goods for the people.
At a discussion on trade and climate change on the sidelines of MC12, the minister underlined that climate change mitigation was an important factor in achieving equality in the world and held that the key issue is to achieve carbon neutrality while maintaining economic growth and improving living conditions for all, especially vulnerable groups. He gave several proposals to speed up actions against climate change during trade activities. He underscored the need to consider specific conditions of each country to avoid the mechanical application of environmental standards in developed countries to developing countries, either directly or indirectly.
According to the minister, allying trade ministers on climate change can be a way to realise these goals, along with enhancing cooperation and discussion not only within the WTO but also in regional and bilateral collaboration frameworks.
At a meeting of Cairns Group, a coalition of 19 agricultural product exporting countries, Diên highlighted three issues that need to be prioritised - the application of trade-distorting subsidies or domestic support measures, affecting many important commodities such as sugar and other essential agricultural products; the application of special safeguards in agriculture that leads to unequal farm produce trade; and measures recently adopted by some countries following geopolitical and supply chain tensions, which directly threaten global food security.
Diên also joined several MC12 sideline discussions and held bilateral meetings with partners such as the European Union, Australia, Singapore and Israel.
The WTO Ministerial Conference is the organisation's highest decision-making body, which takes place every two years. However, due to the impact of the pandemic, MC12 was postponed twice. This was a good chance for the WTO to prove that trade is part of the solutions to many great challenges in the current era, whether public health or the environment. LINK
Samson: US Treasury Department recognises Việt Nam’s progress in addressing currency-related concerns
14th June, 2022
The US Department of the Treasury has recognised the progress made by Việt Nam in its recently released report on macro-economic and foreign exchange policies of major trading partners of the US, the State Bank of Việt Nam (SBV) said on Monday.
The SBV said it would continue working closely with relevant ministries and sectors to discuss the issues of the US side’s concern in a cooperative and win-win spirit so as to develop harmonious and sustainable trade relations.
The central bank of Việt Nam would continue a monetary policy that aims to control inflation, stabilise the macro-economy, and aid economic recovery and development. It would also keep flexible exchange rates appropriate to macro-economic balances, market developments, and the monetary policy’s targets, it added.
In the report unveiled on June 10, the US Department of the Treasury continued reviewing the large trading partners in terms of three criteria: bilateral trade surplus with the US, material current account surplus, and persistent, one-sided intervention in the foreign exchange market.
It placed 12 economies on its “Monitoring List” of major trading partners that merit close attention to their currency practices and macro-economic policies, namely China, Japan, the Republic of Korea, Germany, Italy, India, Malaysia, Singapore, Thailand, Taiwan (China), Việt Nam, and Mexico.
All except Taiwan and Việt Nam (which were subject to enhanced engagement) were on the Monitoring List in the December 2021 Report. As both Việt Nam and Taiwan exceeded the thresholds of fewer than three criteria under the Trade Facilitation and Trade Enforcement Act of 2015 (2015 Act) over the four quarters through December 2021, the Treasury Department put the two economies on the list again.
In the report, it also concluded that no major trading partners manipulated their exchange rates in 2021.
In early 2021, the department commenced enhanced bilateral engagement with Việt Nam in accordance with the 2015 Act. They reached agreement in July 2021 to address the department’s concerns about Việt Nam’s currency practices.
The Treasury Department said in the report that it continued to engage closely with the SBV to monitor Việt Nam’s progress in addressing Treasury’s concerns and is thus far satisfied with progress made by Việt Nam. LINK
Samson: Việt Nam’s economic recovery remains strong: World Bank
14th June, 2022
The World Bank (WB) released the June edition of its monthly Vietnam Macro Monitoring on June 13, highlighting that economic recovery remained strong despite heightened global uncertainties.
Industrial production continued a robust expansion of 10.4 per cent year-on-year while retail sales rebounded with growth of 4.2 per cent month-on-month and 22.6 per cent year-on-year, suggesting strong recovery of private consumption.
About 173,000 international visitors arrived in May, about 70 per cent higher than in April and the highest figure since April 2020, yet still less than 16 per cent of pre-pandemic levels.
Sales of consumer services, which were hit harder than the sales of goods last year, experienced a stronger rebound (41 per cent year on year compared to 18.3 per cent year on year, respectively).
The rebound was due to the booming accommodation and catering services, which increased by nearly 70 per cent and were 12.4 per cent higher than its pre-pandemic level three years ago. Travelling also tripled compared to a year ago although it was about 60 per cent lower than its pre-pandemic level.
Amid heightened global uncertainties, export growth slowed and import growth plateaued.
FDI commitments were US$879 million in May, the lowest level since September 2020, and nearly 50 per cent lower than a year ago. This is the fourth consecutive month of decline, reflecting the heightened economic uncertainties caused by the protracted war in Ukraine and the health-related lockdowns in China.
On the other hand, FDI disbursement remained strong in May, up 8.5 per cent year on year, marking a six-month expanding streak.
CPI inflation edged up from 2.6 per cent in April to 2.9 per cent in May driven by a rise in gasoline and diesel prices, which were 54.5 per cent higher in May than a year ago. Producer price inflation showed signs of easing in May, with both input costs and output prices rising at the slowest rates in three months.
Credit growth remained strong at 16.9 per cent year on year while overnight interbank interest rates dropped sharply from 1.73 per cent in April to 0.33 per cent as of the end of May.
Thanks to strengthening domestic demand, total revenue collection increased by an estimated 29.4 per cent year on year in May, keeping the budget in surplus for the fifth consecutive month.
The WB recommended that Vietnamese authorities should be vigilant about inflation risks associated with continuing rise in prices of fuels and imports, which may dampen the ongoing recovery of domestic demand. Temporary support including targeted transfers should be considered to help poor households weather the price surge.
As the commodity price shock appears to be mainly affecting oil and fuels, with passthrough to transport costs, temporary targeted subsidy for main gasoline and fuel users (such as truckers) could also be considered to alleviate hardship and blunt the inflationary pressures.
Investing in alternative energy production would reduce the economy’s dependence on imported fuels in the medium term and promote greener growth. LINK