Improving trade balance and exports: A case study

09:03 | 22/04/2017 Trade

(VEN) - High export growth and the firm position of Vietnamese industrial and agricultural products in foreign markets reflect the effects of production, business and market development policies and measures.

Data recently announced by the World Trade Organization (WTO) show that global export value in the first 11 months of 2016 reached about US$13.5 trillion, down 3.1 percent compared with the same period in 2015. This downward trend was also demonstrated in some countries in the region, such as China - down 7.2 percent, India - 1.3 percent, Indonesia - 3.9 percent, Malaysia - 4.9 percent, and Singapore - 4.9 percent.

In this context, Vietnam recorded continuous increases in its export value, and even a trade surplus.

A report on the 2016 foreign trade recently issued by the Ministry of Industry and Trade (MoIT) shows that last year, Vietnam’s export value reached US$176.6 billion, up nine percent compared with 2015, while its import value reached US$174.11 billion, up 5.2 percent. These results brought Vietnam’s trade surplus to about US$2.52 billion – compared to a trade deficit in 2015.

Receptivity to business

This success was attributed not only to business efforts but also to suitable policies and mechanisms enforced by the government, ministries, sectors and localities, especially the MoIT.

Opinions solicited by the government from companies helped the MoIT make suitable amendments to many legal documents to facilitate business operations. A typical example is circular 23/2016/TT-BCT dated October 12, 2016 issued by the MoIT to replace one from October 2015, which stipulates the content of formaldehyde and aromatic amino acids transformed from azo dyes in textiles and garments. The new circular was welcomed by businesses as it removes previous obstacles they faced.

On December 28, 2016, the MoIT issued Circular 36/2016/TT-BCT to replace one from 2012 on energy labeling for vehicles and appliances. The new circular has abrogated stipulations which businesses found burdensome.

Along with amending legal documents, the MoIT has taken export promotion measures to further implement the Goods Import and Export Strategy for the 2011-2020 period, with an orientation towards 2030.

Agricultural exports

The MoIT keeps a close watch on the export situation so that it can take timely measures to help businesses overcome internal difficulties and export barriers. It has coordinated with the Ministry of Agriculture and Rural Development (MARD) to follow up supply, demand and price changes in the domestic and global markets, especially for agricultural and aquatic products. At the same time, the MoIT has maintained effective management over the export of seafood, rice and other agricultural products.

The MoIT has also coordinated with the MARD to accelerate the consideration of reports on pest risk analyses and quarantine regulations applied to Vietnamese agricultural and aquatic exports, in an effort to promote exports to Australia, the US and Japan. The MoIT sent delegations to persuade the US House of Representatives to adopt a resolution on terminating the US supervision on Vietnamese catfish.

In 2016, the MoIT worked with the General Administration of Quality Supervision, Inspection and Quarantine of China to speed up the completion of necessary legal procedures to open the Chinese market to Vietnamese agricultural and aquatic products. These efforts significantly contributed to the US$22.2 billion export value of agricultural and aquatic products in 2016, a rise of 7.7 percent compared with 2015.

Import-export policies

The MoIT has also set up a hot line to deal with problems facing import, export businesses. It has provided businesses with updated information about trade defense measures, anti-dumping investigations and trade barriers of importing countries.
Effective implementation of the National Trade Promotion Program, the National Branding Program, and an awards program honoring successful export businesses has also encouraged businesses to expand their operations.

Along with helping businesses overcome difficulties, the MoIT has put in place many policies and mechanisms to facilitate trade. It has put the National Single Window into operation. Currently, four kinds of licenses are granted via this mechanism, including certificate of origin (Form D), license for importing motorized vehicles of high cylinder capacity, license for importing substances that deplete the ozone layer, and licenses for exporting, importing industrial explosive materials.

E-government

At the same time, the MoIT has coordinated with the General Department of Vietnam Customs to set up technical connections to exchange electronic certificates of origin (Form D) via the ASEAN Single Window with Indonesia, Malaysia, Thailand and Singapore.

The ministry has also upgraded technical facilities catering to the implementation of other administrative procedures to ensure that 100 percent of formalities are handled in an electronic environment.

The MoIT expects that in the future, all administrative procedures which it deals with will be implemented via the National Single Window, and that connections with the ASEAN Single Window will allow it to exchange information with non-ASEAN trading partners to facilitate exports and tighten controls over imports.

The MoIT has become a pioneer in implementing Government Resolution 36a/NQ-CP dated October 14, 2015 regarding administrative reforms towards implementing e-government. Currently, the ministry provides a total of 166 public services online.

Effective implementation of policies and mechanisms significantly contributed to Vietnam’s export growth in 2016, helping

improve the trade balance, promote gross domestic product growth, generate jobs, and facilitate the sale of farm products.

Phuong Duong