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Vietnam’s accession to the WTO: opportunities and challenges to the EU’s small and medium-sized enterprises
30/3/2007 11:42' Send Print

In Europe, small and medium-sized enterprises (SMEs) play a leading role in their countries’ economies. Due to the large number of SMEs and their capacity to quickly and dynamically adapt to the actual situation, they are also called “giants of the economy”. However, up to now the number of these SMEs operating in Vietnam has been very modest. According to the European Chamber of Commerce and Industry, Eurocham, up to November 2006, there have been about 570 enterprises from Europe, particularly SMEs, operating in almost all fields of business in Vietnam. Most of them have gained effective outcomes. However, quite a few of them have not really grasped opportunities in Vietnam’s market.

Recently, both Vietnam and the EU have made renewed efforts and moves to accelerate bilateral cooperation. Many opportunities have been opened to EU businesses since Vietnam joined the WTO. Vietnam’s economic growth rate has continued to increase and stabilise and people’s standard of living has been raised. By becoming a WTO member, Vietnam’s business environment has been improved. Vietnam has further improved its legal system to conform to the socialist-oriented market economy, and made management institutions more open and transparent to meet WTO rules. However, in addition to opportunities, in the coming period, SMEs from the EU operating in Vietnam will confront a number of challenges as cited below:

- Competition in Vietnam’s market will become fiercer;

- A shortage of human resource will confront them with many challenges when looking for employees who will work for their investment projects in high-tech industries. These industries require the staff to be highly skilled and disciplined, and have a professional and modern working style;

- Auxiliary industries are not very developed in Vietnam;

- Vietnam’s infrastructure remains poor and overloaded while a shortage of funds and electrical energy makes it difficult to improve and build new structures. From now to 2010, Vietnam will need at least 12,000 MW of electric power, while the current power supply is only 11,200 MW.

Since Vietnam joined the WTO, many experts have predicted a new wave of investment from EU countries into Vietnam. This shows that Vietnam’s determination and efforts for economic integration will gain new successes. However, it also shows that EU investors, particularly SMEs, with their own characteristics and advantages, have learned new opportunities and dealt with the challenges confronting them in order to prepare proper measures to expand and further develop their activities in Vietnam

Dinh Manh Tuan