Market Access Support for Vietnam,
through the Strengthening of Capacities
Dr. Bernardo Calzadilla Sarmiento
UNIDO Deputy Representative - Geneva
Presentation Outline:
Presentation Outline:
• UNIDO’s Trade Capacity Building Approach
• UNIDO’s current and planned programmes in
the Trade Capacity Building field
• FOCUS: Vietnam
• Outcomes and Conclusions
Global Trade Growth & Marginalisation Concerns
World exports, 1980-2004 (US$ billion)
10,000
9,000
8,000
World
7,000
Developed
economies
billion US$
6,000
5,000
4,000
Developing
economies
3,000
2,000
1,000
LDCs
0
1980
Source: UNCTAD, 2005
1985
1990
1995
2000
2001
2002
2003
2004
 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)
Global Trade Participation Challenges
WORLD TRADE: MANUFACTURED GOOD
Share of manufactured trade in total trade, %, 1970-2005
Developed
Developing
LDC
World
90%
80%
72.1%
80.5%
74.7%
76.1%
70.9%
70%
60%
78.8%
64.1%
63.2%
40%
44.4%
33.7%
21.8%
10%
16.3%
6.9%
1970
Source: UN
Comtrade
44.2%
27.1%
20%
0%
68.8%
57.3%
50%
30%
68.3%
78.1%
74.3%
1980
1990
2000
2005
Global Trade Participation Challenges
NO TRADE GAINS WITHOUT PRODUCTIVE CAPACITY
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, Source:US Food and Drug Administration
160
140
# of refusals
120
100
80
60
40
Fishery/Seafood
717 refusals
20
0
COMESA
UMA
SADC
ECCAS
EAC
UEMOA
January 2005 – December 2006
Labeling
Registration
Char. of Product
Method of Production/Packing
ECOWAS
(NON
UEMOA)
Three thematic areas:
Long-term
Goal
Thematic
Priorities
Programme
Components
To contribute to the achievement of the Millennium Development Goals (MDGs), in particular to
poverty eradication through sustainable industrial development.
Poverty reduction through
productive activities
Trade
capacity-building
Energy
and environment
Industrial Policy,
Business Environment and
Institutional Support
Enterprise Upgrading for
Trade Enhancement
Renewable Energy
Rural and Women’s
Entrepreneurship Development
Competitiveness Analysis and
Trade-related Policies
SME Cluster Development
Innovation Systems, Technology
Management and Foresight
Agro-processing and
Value Chain Development
Rural Energy for Productive Use
Sustainable Production in
Poor Communities
Modernization of Exportoriented Agro-industries
SME Export Consortia
Climate Change and
Industrial Energy Efficiency
Cleaner and
Sustainable Production
Water Management
Technology Diffusion
Corporate Social Responsibility
for Market Integration
Montreal Protocol
Promotion of Domestic
Investment, FDI and Alliances
Standards, Metrology,
Testing and Conformity
Stockholm Convention
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
UNIDO TCB - Key Focus Areas
Compete
Supply side development (UNIDO)
Conform
Standards & Conformity Assessment/Compliance (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
• Development and harmonization of standards
• Development of testing services , PT Schemes
• Certification (products and enterprise systems)
• Metrology/Calibration chain
• Accreditation schemes
Connect
Integration in to the MTS (WTO, UNCTAD, ITC, WB…)
• WTO rules, negotiations
• Trade facilitation (customs, documentation)
• Infrastructure (transport, ports)
UNIDO’s TCB Projects: A FEW EXAMPLES
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
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
requirements…with special focus on regional cooperation.
-
Regional Trade: MEKONG (Cambodia, Lao PDR, Vietnam)
UNIDO Aid-for-Trade type Programmes (Supply-side & Conformity)
Regional Trade: MEKONG (Cambodia, Lao PDR, Vietnam)
Trade Capacity Building in the Mekong Delta Countries of Cambodia,
Lao PDR and Vietnam, through Strengthening Institutional and
National Capacities Related to Standards, Metrology, Testing and
Quality (SMTQ)
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.
Market Access Support for Vietnam,
through the Strengthening of Capacities Related to
Metrology, Testing and Conformity
US/VIE03/083
Lessons from high growth countries: Vietnam
Asia’s Second-fastest-growing economy
Source: FORTUNE (European ed.), Nov. 2006, No.9, Vol.154
 GDP average during the past 5 years: 7.4%
VIETNAM – Surging Ahead
 GDP growth in 2005 second highest in the
Asian region: 8.4%
 Increasing Exports (textiles, seafood & furniture):
US$32 billion
 FDI as a percent of GDP: 3.8%
 Literacy rate: 90%
 Growing interest from Global Manufacturers
(looking for alternatives for China) such as:
Intel, Victoria’s Secret, etc.
Vietnam reduced its poverty rate from 51% to 8% in only 15 years
Remarkable achievement - Exports the Key
VIETNAM: Significant Trade Potential
Rapid Economic Growth
Source: WDI
- GDP growth 8.4% in 2005, fastest growth in Southeast Asia, from US$ 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
PHASE I
US/VIE/03/083
OBJECTIVE
Upgrade the required technical infrastructure for
metrology, textile/apparel, microbiology and
chemical testing and calibration needs in
industry, system certification capacity and
strengthen SMTQ institutional service caability.
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
Quality Assurance and Testing Centre 1
(QUATEST 1), Hanoi
 Textile testing laboratory:
Carries out physical and compositional testing of textiles and garments.
Quality Assurance and Testing Centre 3
(QUATEST 3), Ho Chi Minh City
 Food testing laboratory:
Carries out a wide range of testing of products, food and animal feedstuffs.
Microbiology testing laboratory: Carries out tests on fruits & vegetable products, fish & fish products,
milk & milk products, and water.
National Fisheries Quality Assurance and
Veterinary Directorate Branch 1
(NAFIQAVED 1), Hai Phong City
 Microbiology testing laboratory: Carries out tests on fish & fish products, and potable water.
20 - 27 April 2005: HACCP Auditor Training Course, Hanoi.
23 participants from Vietnam, Laos, Cambodia;
28 April - 6 May 2005: HACCP Training of Trainers Course, Hanoi.
06 participants and 03 observers (only Vietnamese participants);
25 April - 5 May 2005. EMS Training of Trainers Course, Hanoi.
05 participants from Vietnam;
29 April 2005. EMS Seminar, Hanoi.
45 participants from different agencies and companies;
04 - 12 May 2005. QMS Training of Trainers Course, Hanoi.
06 participants from Vietnam;
06 May 2005. HACCP/GMP Seminar, Hanoi.
55 participants;
12 May 2005, QMS Seminar, Hanoi.
40 participants;
18 July - 05 August 2005, Training on Temperature Measurement (02
trainees) and on Mass Measurement (02 trainees) at PTB, Germany;
27 Nov - 18 Dec 2005, Training in Textile Laboratory, Sri Lanka.
2 trainees;
11 - 14 April 2006, SA 8000 Lead Auditor Training Course, Hanoi.
14 participants;
OSHAS 18000 training will be carried out in December 2006.
Examples of
training
provided under
the Project
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)
Significant developments in Vietnam’s 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/NĐ-CP) in April 25, 2006 that
allows “commercial entities” within the government’s administration to benefit
with autonomy in personnel, finance and operations; and encourage the
corporatization of organizations within the government administration.
TRADE CAPACITY BUILDING
tcb@unido.org
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).
TRADE CAPACITY BUILDING
tcb@unido.org
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.
TRADE CAPACITY BUILDING
tcb@unido.org
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.
TRADE CAPACITY BUILDING
tcb@unido.org
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).
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
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