A shift from tariffs to technical barriers will force Vietnam to improve its product quality, according to former WTO Director General Pascal Lamy.
Global trade has seen many changes over the past decade, he said during a recent dialogue with Vietnamese enterprises on global trade
Years ago, the world relied on tariffs to protect local manufacturers, but that tactic is becoming increasingly rare, Lamy said.
Enterprises can now leave countries which impose high tariffs for those with no taxes or low taxes, he added.
Now, countries use more non-tariff barriers to protect consumers from products that are deemed unsafe, unhealthy or bad for the environment.
Vietnamese enterprises need to realize that their products, even in the lower-end market segment, must meet stricter technical and safety criteria to compete on the global market. Producers must deal with increasing scrutiny of their products as consumers become more educated and enjoy higher incomes, Lamy said.
He urged Vietnam commit itself to adding value to its products while focusing on trade facilitation and logistical improvements.
He also suggested the country invest more in education to create a competitive human resource advantage. Improving technology is also necessary to helping Vietnam overcome technical barriers. By using advanced technology, he suggested, local enterprises can accurately control the chemical substances found in their seafood to meet importer standards.
Improving the quality of products will enable countries such as Vietnam to protect domestic consumers and local jobs, he added.