Covid-19 outbreak challenges Vietnam’s exports

10:33 | 11/03/2020 Trade

(VEN) - In an interview with Vietnam Economic News’ Hoang Chau and Bui Hung, Dr. Dang Kim Son, Director of the Institute of Agricultural Market and Institution under the Ministry of Agriculture and Rural Development, said policy changes are required to minimize the dependence of Vietnamese goods, especially agricultural exports, on specific markets.

covid 19 outbreak challenges vietnams exports
Dr. Dang Kim Son, Director of the Institute of Agricultural Market and Institution

In an attempt to control the coronavirus (Covid-19) outbreak, many countries, including China, have restricted or halted border trade. How does this affect production and trade, especially Vietnam’s agro-forestry-fishery sector?

The Covid-19 outbreak not only affects human health but also weakens production and trade in goods in both domestic and foreign markets. Foreign trade has stagnated since China applied epidemic control measures. The situation is bad for farmers, in particular, who cannot find buyers for their fresh produce. Since the Covid-19 outbreak was announced, hundreds of trucks carrying Vietnamese dragon fruit and watermelon have been stuck at Vietnamese-Chinese border gates due to China’s restrictions or closing of sub-border crossings and border markets. Vietnam’s trade with China reached US$8.29 billion in January 2020, down 25.8 percent compared to December 2019 and 11.8 percent compared to the same time last year. Of this, Vietnam’s exports and imports were US$2.75 billion and US$5.54 billion, down 35.3 and 20.1 percent, respectively, compared to December 2019.

covid 19 outbreak challenges vietnams exports

The government, ministries and sectors, including the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development, have taken measures to stabilize and promote exports. How do you assess them?

Early this year, the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development acknowledged foreign trade difficulties and took the initiative in finding solutions to the problems. The Covid-19 outbreak is like a sudden, strong blow to production and exports, including farm produce exports. Personally, I think the Ministry of Industry and Trade should promote domestic trade, endeavor to maintain stability in trade with China, expand other markets and look for new ones. The ministry worked with supermarkets and distribution systems inside the country to ensure purchase of products from producers. This is really a good effort.

The Covid-19 outbreak is forecast to affect many countries, including Vietnam’s key export markets. What are your recommendations to the government on maintaining exports?

The government, the Ministry of Industry and Trade, and other ministries and sectors have offered appropriate and timely solutions. However, these are just short-term solutions, and in the long term, they should think of production restructuring.

In particular, it is necessary to have solutions to connect and form production, processing, storage and sales value chains in accordance with new standards of importing countries, especially those countries and territories with which Vietnam has signed free trade agreements (FTA). I believe that Vietnamese producers and agribusinesses can grow any tropical farm produce on a large scale.

The Ministry of Industry and Trade will play a very important role in finding, expanding and maintaining markets not only related to trade with China but also European and African markets. To do that the ministry needs to enable domestic and foreign enterprises to shift from the definitive purchase-alienation relationship model (simply based on economic contracts) to a long-term investment relationship model (based on technology transfer, direct processing in production areas and connection with domestic and foreign sales chains).

Hoang Chau & Bui Hung