15:01 | 10/01/2014 Trade
(VEN) - The Asia-Pacific region has maintained its number-one place among Vietnam’s export markets, contributing more than 50 percent of all export revenues. It is expected to bring about high profits in 2014 when the economy recovers.
Businesses including textile and garment companies were recommended to make the most of opportunities provided by FTAs between Vietnam and its partners
The Asia-Pacific region is a prime market due to location and similarities in terms of culture and consumption habits. It is also one of Vietnam’s traditional export markets. As Vietnam borders with China, overland trade is busy, in addition to traditional seaway transport. Vietnam conclusion of Free Trade Agreements (FTAs) with most major markets in the region has greatly facilitated exporters. For this reason, Asia-Pacific has been Vietnam’s largest export market for years now.
Despite annual high export revenues, the global economic recession has slowed the regional growth affecting trade and investment ties between Vietnam and markets in the Asia-Pacific region. Although Vietnamese exports to Asia-Pacific reached US$67.7 billion in 2013 contributing 51.2 percent of all export revenues, the export growth was only 11.2 percent compared with 22 percent in 2012.
However, experts believed that as a result of global economic recovery in 2014, exports to countries in the Asia-Pacific region would increase strongly again.
Geographical proximity and consumption similarities have helped Vietnam establish close ties with the markets in the Asia-Pacific region through a series of FTAs. Businesses were recommended to make the most of opportunities provided by FTAs between Vietnam and its partners. These include Agreement on the ASEAN Free Trade Area (AFTA), Agreement on ASEAN-Japan Comprehensive Economic Partnership (AJCEP), Vietnam-Japan Economic Partnership Agreement (VJEPA), Vietnam’s tax commitments within the framework of the ASEAN-India Free Trade Area (AIFTA) and ASEAN-Australia-New Zealand FTA (AANZFTA), which Vietnam has concluded, plus a number of other agreements now under negotiations such as the Trans Pacific Partnership (TPP) and the Asia-Pacific Regional Comprehensive Economic Partnership (RCEP).
The Ministry of Industry and Trade’s Export Import Department Head Phan Van Chinh said that one of the reasons for remarkable export revenues in 2013 was that businesses made the most of preferential C/O markets. Taking advantage of preferential certificates of origin (C/Os) has helped businesses improve the competitiveness of their goods in export markets. At months, preferential C/O exports to the Republic of Korea accounted for more than 90 percent of all exports to this market, ASEAN more than 30 percent, and Japan more than 75 percent.
Apart from direct preferences for businesses, FTAs have offered indirect opportunities by attracting investment. Vietnamese Trade Counselor in the Republic of Korea Chu Thang Trung said that the Vietnamese Trade Office in the Republic of Korea recently got together with the Ministry of Industry and Trade and the Vietnam Textile and Apparel Association (VITAS) to launch textile and garment trade and investment promotion activities. The Korea Federation of Textile Industries said that several Korean textile and garment companies intended to invest in Vietnam to early benefit from the upcoming TPP.
Localities should realize opportunities provided by big-name multinational groups which shift their investment to Vietnam. Actually, the Vietnamese investment environment is attracting many multinational groups. In this light, now is a good time for provinces and cities to attract investment in major sectors including support industries, which need to develop strongly. After the Samsung Group invested in two large-scale projects in Bac Ninh and Thai Nguyen provinces, many Korean companies, which are Samsung’s satellites, have looked to build factories in Vietnam.
It is also needed to persify forms of cooperation between business associations and between localities following specific cooperative plans and programs. Businesses should also tighten their ties to produce high added-value exports to meet the need and overcome barriers in foreign markets.
Vietnamese Ambassador to Japan Doan Xuan Hung said that Japan has 47 provinces, many of which have long relations with Vietnam. For example, Nagasaki established cooperative ties with Vietnam more than 400 years ago. For this reason, businesses and localities need to build relations with Japanese businesses and localities in the short term. He also said that the Vietnamese Embassy in Japan would help them. In addition, based on the traditional trade ties between Vietnamese and Japanese businesses, Vietnam should make Japanese companies a reliable source of promoting, advertising and certifying Vietnamese products in the Japanese market. As a matter of fact, by speaking about Vietnamese products Japanese companies would probably convince Japanese consumers much better.
In addition, businesses need to actively research into foreign markets and take part in trade fairs to seek clients.
There is also a need to ensure the quality of products and sufficient supply. “This is the best key for Vietnamese goods to enter every market, rather than only the Asia-Pacific region,” said Vietnamese Trade Counselor in the Republic of Korea Chu Thang Trung.
Statistics from the Ministry of Industry and Trade showed that Vietnamese exports to the Asia-Pacific region reached US$57.3 billion in 2012 accounting for 50.1 percent of all export revenues, and US$67.7 billion in 2013, around 51.2 percent, respectively.
Among Vietnam’s export markets in the Asia-Pacific region, ASEAN generated US$18.5 billion, a 6.3 percent increase, Japan US$13.6 billion, up by 3.8 percent, and China US$13.1 billion, up by 2.1 percent, respectively.