It has fascinated Vietnam watchers, particularly those from the West, to discover the metamorphosis of the country transforming itself from a closed political system into an aspiring market economy.

Mixing role models from all over the globe and opening rapidly to catch up with globalisation, Vietnam has attracted foreign direct investment that grows larger and larger each year and kept conservative economists bewildered.

A European-style welfare state, market socialism of China’s Deng Xiaoping , social stability and affluence delivered by Singapore’s Lee Kwan Yew through dominating People's Action Party have probably given great inspiration to Vietnam's single-party government that sets its sight on presiding over a modern industrial nation in the next decade.

The stresses of this ambitious drive to a market economy come at a price, though. As opportunities for a new entrepreneurial class continue to grow, the safety net for the poor is fraying. Farmers and townspeople have been displaced by hotels and factories built by foreign investors; organised labor - where it exists - is impotent; health care is spotty; and traffic and air pollution in major cities have reached critical mass.

Old inequalities persist as new ones develop despite the UNDP’s recognition that Vietnam being one of the rare countries in the world where poverty is receding.
Similar to China, the largest non-market economy in the world, Vietnam faces a number of allegations and litigation.

India, for example, initiated a few anti-dumping investigations against Vietnamese products and applied duties on the import of some of these goods. In 2009, it imposed anti-dumping duties on three items – threads and fabrics, CD-R, and fluorescent lights – imported from Vietnam.

India, however, granted the market economy status to Vietnam in mid-2009 at the Asean Summit in Thailand, and cleared the way for Vietnam, which had refused to sign the Asean-India Free Trade Agreement, to finally put it signature to the document.

According to Vietnam’s Ministry of Industry, 26 countries, including Australia and New Zealand, have recognised Vietnam as a market economy since it joined the WTO in 2007.

However, the European Union and the United States, despite being the major investor and trade partners, have yet to see a good reason to follow suit. The EU has recently extended anti-dumping duties on leather-capped shoes from Vietnam, saying it is unsuitable with the growing economic and trade ties between Vietnam and the EU.

The European Commission - the legislative arm of the EU - is currently imposing an anti-dumping tariff rate of 10 percent on Vietnamese leather shoes.

The EU duty extensions, expected to come into force on Jan. 1, 2010 will apply to middle and high-end leather shoes–the major export staples of Vietnam’s leather and footwear industry that are currently offered at a more competitive price than those from other countries.

Meanwhile, the US imposition of anti-dumping duties on Vietnam’s frozen shrimp products since 2003 has made the number of exporters decrease.

Vietnam has now launched its first dispute at the World Trade Organization with a case against US anti-dumping measures on its key exports of shrimp.

The trade dispute with the United States not only has symbolic significance, given the two countries' war that ended 35 years ago, but defends a product that brought in some $1.5 billion in exports last year.

It also pits Hanoi against a large number of Vietnamese-American shrimpers who operate off the coasts of Texas, Louisiana, Mississippi, Alabama, Georgia and Florida.

Vietnamese shrimp exporters currently face U.S. anti-dumping duties ranging from zero to about 26 percent.

They have complained in the past about the controversial US method of calculating anti-dumping duties known as zeroing, which has been condemned repeatedly by

WTO courts and rejected by all other WTO members.