Seeking solutions for sustainable export

09:02 | 13/05/2015 Trade

(VEN) - Vietnam is likely to face trade deficit again this year given that trade deficit exceeded US$1.8 billion in the first quarter of this year. For this reason, how to increase exports in a sustainable manner was a hot topic at the 2015 Vietnam Trade Promotion Forum which was held recently in Hanoi.

Seeking solutions  for sustainable export

Risk of trade deficit

Vietnamese exports grew by 6.9 percent in the first quarter of this year when compared with the last quarter of 2014. Experts said that Vietnam would likely face trade deficit again this year. According to Tran Thanh Hai, the Deputy Head of the Ministry of Industry and Trade’s Export Import Department, trade deficit shows that Vietnamese exports are unsustainable.

He attributed the shortcoming to the agricultural and fishery sector which has contributed tremendously to total export earnings but has relied greatly on the weather and has regularly been hurt by negative climate change. Although Vietnam is among top agricultural and seafood exporters in the world, it has  not been able to control the global market and determine prices. Instead of this, Vietnam has had to follow prices in other markets like Thailand and India.

Similarly, although processed industrial products account for two-thirds of total export revenues, the added value of these products remains low due to the undeveloped support industries and processing which remains a major form of business. Vietnamese exports depend on several groups of items, even hot categories like telephones. In the event that technology or consumer taste changes, it would lead to a decline in revenue from this kind of export and total export earnings.

Economist Vo Tri Thanh said that he sees signs of difficulties in exports this year. Challenges are both external and internal. External reasons are associated with unstable and uneven global economic recovery and unstable economic growth in several countries, which are Vietnam’s major export markets. Internal reasons lie in the export structure, which relies greatly on several items such as telephones, which are unlikely to grow as high as in the last years.

Optimizing markets

To resolve difficulties for Vietnamese exports in 2015, Tran Thanh Hai said that bilateral and multilateral free trade agreements (FTAs) are key factors for promoting Vietnamese exports. By implementing trade agreements, Vietnam would enjoy more preferences than other non-FTA partners. For example, Vietnam would pay preferential tariffs, including zero percent tariffs, on many items, which would create significant competitive advantage.

Vietnamese businesses have made the most of preferences via trade agreements. This is reflected through the significant percentage of export revenues which have used certificates of origin such as the Republic of Korea reaching 85 percent, Chile 37 percent and Japan 33.7 percent.

With that in mind, businesses should make the most of the advantage and target markets, with which Vietnam has or is about to conclude trade agreements such as the US and the EU. In addition, they should expand their share of Vietnam’s traditional markets like the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific region.

To drive towards sustainable exports, Tran Thanh Hai recommended that businesses boost trade promotion activities via fairs, exhibitions and forums and attracting foreign investment capital to create more export growth engines. They should also develop processing and increase the value of their products among the global value chain. Meanwhile, the government needs to facilitate trade and improve administrative procedures to save time and money in favor of businesses.

Vietnamese businesses have made the most of preferences via trade agreements. This is reflected through the significant percentage of export revenues which have used certificates of origin such as the Republic of Korea reaching 85 percent, Chile 37 percent and Japan 33.7 percent.

By Viet Nga

 

Theo ven.vn