15:00 | 04/03/2015 Trade
While Vietnamese businesses have to struggle to bring their products to the world market, foreign goods do not encounter the same obstacles when entering Vietnam.
Vinamit, a dried fruit exporter, for example, still cannot sell its products to China’s Hai Nan Island, despite great efforts made over the years.
The problem is that the island’s authorities set very high requirements on aerobic bacteria and food quarantine.
Vinamit’s chair and CEO, Nguyen Lam Vien, noted that by setting up very high requirements on import products, the Hai Nan Island authorities have tried to protect local production.
In the era of non-tariff free trade agreements, technical trade barriers are used to restrict imports to protect local production.
However, Vietnamese management agencies apparently do not think it is necessary to protect Vietnamese production against the “evasion” of foreign goods.
The domestic market has been left open wide for foreign imports, including low-quality and counterfeit goods.
“Foreign businessmen can easily bring their products to Vietnam to sell on the domestic market. They can also easily collect materials in Vietnam and bring them to their home countries,” Vien said about the state agencies’ loose management.
Dr. Le Xuan Nghia, member of the National Advisory Council for Monetary Policy, used the words “unclothed in the storm” when describing Vietnamese businesses which have to struggle hard to survive the stiff competition with foreign businesses masses.
“Smuggling and trade fraud will be the highest risks for Vietnamese businesses in the time to come,” Nghia said.
He said institutional reform cannot catch up with the market opening process.
“This is Vietnam’s strategic risk, at least in the mid-term, which has put hard pressure on Vietnamese businesses, especially startups,” he added.
Technical trade barriers are useful in preventing low-quality products to enter the home market, which may harm domestic production.
However, an official of the Ministry of Science and Technology said it is not easy for Vietnamese agencies to set technical trade barriers.
“At first, Vietnam needs to set up national standards and use tools to examine and assess product quality. The tools are still lacking,” he explained.
He said it is very costly to have products certified by international organizations to meet certain standards.
Meanwhile, Vietnam has only a few internationally recognized organizations.