Market Access Support for Vietnam,

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Market Access Support for Vietnam, through the
Strengthening of Capacities
Dr. Bernardo Calzadilla Sarmiento UNIDO Deputy
Representative - Geneva
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Presentation Outline
Presentation Outline

• UNIDOs Trade Capacity Building Approach
• UNIDOs current and planned programmes in the
  Trade Capacity Building field
• FOCUS Vietnam
• Outcomes and Conclusions

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Global Trade Growth Marginalisation Concerns

• Share of developing countries in global trade
  only 26
• Every 1 growth in Trade, LEADS TO one-half
  Income increase
• Over 75 of global trade is in manufactures
  (industrial goods)

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Global Trade Participation Challenges WORLD
TRADE MANUFACTURED GOOD
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Global Trade Participation Challenges NO TRADE
GAINS WITHOUT PRODUCTIVE CAPACITY
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Global Trade Participation Challenges FROM
TARIFF TO NON-TARIFF BARRIERS TO TRADE
CHALLENGES IN ACCESSING MARKETS - Food Safety
Requirements FDA IMPORT REFUSALS for the African
Countries by Sub-region UNIDO ANALYSIS of Import
Refusals, SourceUS Food and Drug Administration
Fishery/Seafood 717 refusals
January 2005 December 2006
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Three thematic areas
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• Global Trade Participation Challenges
• Integrating into Global Trade

Challenges for trade participation UNIDO 3Cs

• Countries must have marketable products for
  exportation
• ? COMPETITIVITY of productive capacities

• Products must conform to requirements of clients
  and markets
• ? CONFORMITY with standards

• Rules for trade must be equitable and customs
  procedures harmonized
• ? CONNECTIVITY to markets

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UNIDO TCB - Key Focus Areas
Compete

• Supply side development (UNIDO)
• Industrial policy and supportive institutional
  structure
• Investment and technology transfer
• SME development and access to finance
• Cluster and export consortia development
• Productivity and quality
• Industrial Upgrading, sectoral technology
  support
• Cleaner Production, energy efficiency
• Standards Conformity Assessment/Compliance
  (UNIDO)
• Development and harmonization of standards
• Development of testing services , PT Schemes
• Certification (products and enterprise systems)
• Metrology/Calibration chain
• Accreditation schemes
• Integration in to the MTS (WTO, UNCTAD, ITC, WB)
• WTO rules, negotiations
• Trade facilitation (customs, documentation)
• Infrastructure (transport, ports)

Conform
Connect
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UNIDOs TCB Projects A FEW EXAMPLES
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• NATIONAL PROGRAMS Aid-for-Trade type Programmes
  (Supply-side Conformity)
• Specific TRTA EGYPT- Traceability of
  agro-industrial products for the European Market
• Product Specific TRTA Regional Cotton Programme-
  a key issue in Cancún
• Supply and Conformity INTEGRATED INDUSTRIAL
  DEVELOPMENT SUPPORT PROGRAMME FOR SRI LANKA

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• Regional Programmes Aid-for-Trade type
  Programmes (Supply-side Conformity)
• - Regional Trade UNIDO/EU - UEMOA Programme
• Productive Capacities and Quality Promotion
• Standards and Conformity Assessment
• Regional accreditation scheme
• Regional Trade EAC (Burundi, Kenya, Rwanda,
  Tanzania, Uganda)
• - Trade capacity building in agro-products for
  the establishment and proof of compliance with
  international market requirementswith special
  focus on regional cooperation.
• Regional Trade MEKONG (Cambodia, Lao PDR,
  Vietnam)

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UNIDO Aid-for-Trade type Programmes (Supply-side
Conformity)
Regional Trade MEKONG (Cambodia, Lao PDR,
Vietnam)
Budget US 2.5 million Donor Norway

• Cambodia and Lao PDR
• Formulation and publication national standards,
  for domestic and export products
• Development of ISO 9001, ISO 14001 and HACCP
  certification services, reinforcing corresponding
  institutions
• Accredited Product Certification scheme
  established
• TBT enquiry point, standards library and
  documentation centre with facilities for
  acquisition and dissemination of
• information established
•  
• Vietnam
• Product certification scheme for CE marking and
  other IEEE requirements
• Compliance capacity for EU traceability,
  EUREPGAP, GVP and GTP
• Upgraded Vietnam Metrology Center
• National proficiency scheme launched and BOA
  staff trained in specialised areas
• Within this regional context, one area in which
  UNIDO has focussed has been on the issue of
  Vietnam's market access issues.

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Market Access Support for Vietnam, through the
Strengthening of Capacities Related to
Metrology, Testing and Conformity US/VIE03/083
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Lessons from high growth countries Vietnam
Asias Second-fastest-growing economy Source
FORTUNE (European ed.), Nov. 2006, No.9, Vol.154

• GDP average during the past 5 years 7.4
• GDP growth in 2005 second highest in the
• Asian region 8.4
• Increasing Exports (textiles, seafood
  furniture)
• US32 billion
• FDI as a percent of GDP 3.8
• Literacy rate 90
• Growing interest from Global Manufacturers
• (looking for alternatives for China) such as
• Intel, Victorias Secret, etc.

VIETNAM Surging Ahead
Vietnam reduced its poverty rate from 51 to 8
in only 15 years Remarkable achievement - Exports
the Key
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VIETNAM Significant Trade Potential Rapid
Economic Growth
Source WDI

• GDP growth 8.4 in 2005, fastest growth in
  Southeast Asia, from US 31 bn. To US 52 bn.
  over the last 5 years
• Population of 82 mn., ranking 14th largest in
  the world
• Growing Imports, Exports and Investment
• Becoming a competitive regional manufacturing
  base

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PHASE I
US/VIE/03/083

• Quality Assurance and Testing Centre 3 (QUATEST
  3), Ho Chi Minh City
• Mass measurement laboratory
• Temperature Measurement laboratory
• Vietnam Metrology Institute
• (VMI), Hanoi
• Mass measurement laboratory
• Temperature Measurement laboratory

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• Quality Assurance and Testing Centre 1 (QUATEST
  1), Hanoi
• Textile testing laboratory
• Quality Assurance and Testing Centre 3 (QUATEST
  3), Ho Chi Minh City
• Food testing laboratory
• Microbiology testing laboratory
• National Fisheries Quality Assurance and
  Veterinary Directorate Branch 1 (NAFIQAVED 1),
  Hai Phong City
• Microbiology testing laboratory

Carries out physical and compositional testing of
textiles and garments.
Carries out a wide range of testing of products,
food and animal feedstuffs.
Carries out tests on fruits vegetable products,
fish fish products, milk milk products, and
water.
Carries out tests on fish fish products, and
potable water.
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Examples of training provided under the Project
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Accreditation in Vietnam and Corporate
Governance of STAMEQ

• need to bring the BoA into full compliance with
  ISO/IEC 17011
• continue training activities for BoA staff
  members and technical assessors
• ToR for proposed Accreditation Council drafted
• Develop new laws on standards and quality (Gov.
  deadline for standards legislation mid 2006 for
  legislation on quality late 2006)

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Significant developments in Vietnams public
administration

• Board of Accreditation (BoA) In order to
  continue the process towards a more independent
  status of the BoA, the functions of Deputy
  Director-General of STAMEQ and Director of BoA
  have been separated as of May 15, 2006.
• The Government published a decree (No
  43/2006/NÐ-CP) in April 25, 2006 that allows
  commercial entities within the governments
  administration to benefit with autonomy in
  personnel, finance and operations and encourage
  the corporatization of organizations within the
  government administration.

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STAMEQ SWOT Analysis
STRENGHTS

• Longstanding customer relationships,
• Easy access to government-owned companies
• Political connections
• Good and quick response to client requests due
  to availability of local experts within the
  country, familiarity with local context/language.
• Testing the ability to offer a range of
  technical fields in-house. High quality of
  service, experienced workforce. Specialized in
  areas where high volumes can be generated (other
  services are sourced from specialized
  laboratories).
• BDS package approach is interesting and
  attractive to SMEs, especially newly established
  ones, and donors who are funding SME support
  programs, including possibly programs established
  in neighboring countries.
• HWC Currently the only training/consulting
  organization specializing in the field of welding
  (and the only officially recognized welding
  institute in Vietnam).
• Vertical and horizontal integration within
  STAMEQ (provided synergies are exploited).

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STAMEQ SWOT Analysis
WEAKNESSES

• Broad diversification rather then specialization
  within the entities
• Internal competition in some key areas
• Ability to cope with political constraints as a
  state organization. Although entities will enjoy
  a large degree of autonomy after implementation
  of Decree Nr. 115, they still might have to cope
  with political constraints
• Marketing capacity/budget lower then possible
  new, foreign-invested market entrants, sales side
  weak
• Lack of managerial accounting system.

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STAMEQ SWOT Analysis
OPPORTUNITIES

• Capitalize on testing needs arising from
  increased investment and export activities
• Capitalize on opportunities arising from
  integration of Vietnamese enterprises in
  multi-national supply chains
• Consulting and certification in ISO 9000 for
  government bodies (according to Decision Nr.
  144/2006 issued by the Prime Minister on applying
  ISO 9000 in government offices). The conditions
  defined according to this decision leads to a de
  facto monopoly of STAMEQ in this field. The
  training center intends to develop capacities to
  exploit this opportunity.

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STAMEQ SWOT Analysis
THREATS

• Increased foreign competition in testing and
  in-country establishment of competitors in QMS
  consulting and certification
• Relatively mature market for ISO 9001
• The establishment of in-house testing
  facilities, or testing facilities in industrial
  zones
• Gradual decrease of donor support for SME BDS
• Could decision Nr. 115 lead to a situation where
  many smaller institutions need to seek new
  revenues and subsequently also use their
  laboratories more intensively for testing
  activities? Whether this is a threat or
  opportunity depends mainly on whether STAMEQ can
  maintain its quality (and convince clients to pay
  a higher price for it).

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VIETNAM WTO Accession a Challenge

• - WTO accession a demanding process
• - Success in meeting WTO obligations also depends
  on the technical assistance support provided in
  meeting the requirements of the TBT/SPS
  agreements
• - WTO TBT/SPS agreements are to be implemented
  immediately
• - Establishment of TBT and SPS Enquiry Points

WTO ACCESSION BENEFITS

• Promotes continued domestic reform towards
  perfecting a market based economy
• Promotes meaningful market access to foreign
  markets
• Increased export opportunities
• Attract larger flows of FDI
• Poverty reduction

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The way forward

• - WTO Accession.
• - TBT Issues addressed through Enq. points
• SPS Strengthen capacity to deal with Standards
  and Conformity Requirements related to Key Export
  Sectors in Vietnam
• Enhance ownership
• Improve participation and influence standard
  development

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