Vietnam imports cotton from US to ease trade imbalance

06:00 | 13/04/2020 Cooperation

(VEN) - Vietnam continues to facilitate trade with the US despite the expanding Covid-19 pandemic. The Ministry of Industry and Trade is directing the implementation of an action plan to develop harmonious, sustainable trade relations with that market.

vietnam imports cotton from us to ease trade imbalance

Commodity structure changed

In recent years, the US has become the largest importer of Vietnamese goods. Vietnam’s export structure to the US has changed significantly since the US-Vietnam Bilateral Trade Agreement (BTA) was signed in 2000. Minister Counselor Bui Huy Son, Head of the Vietnam Trade Office in the US, told Vietnam Economic News that all of Vietnam’s key exports, including textiles and garments, leather and footwear, farm produce and seafood, are found in the US in large quantities and diverse ranges. In 2019, textiles and garments, footwear, phones and components, computers and electronic products, and wooden furniture were Vietnam’s biggest exports to this market, accounting for 24, 11, 15, 10 and 9 percent of the country’s total export value to the US, respectively.

The export structure has changed to include a greater proportion of processed and manufactured goods with higher added value. Ten exports to the US brought in more than US$1 billion each. Son noted that the US is a large, potential but discerning market that has strict quality and product origin requirements, so that quality improvement should be the most important way to maintain Vietnam’s export growth.

Vietnam imports from the US machinery, equipment, raw materials, and farm produce (fruit and meat products).

Son said the Vietnam Trade Office in the US has been helping Vietnamese businesses promote trade in vegetables and fruit licensed by the US, including dragon fruit, litchi, and rambutan, and proposed that the US speed up the import licensing of Vietnamese grapefruit. The trade office also helps fishery and plywood businesses find partners and expand markets, while working with the Ministry of Industry and Trade’s Trade Remedies Authority, the US Department of Commerce (DOC) and other relevant organizations to protect the interests of Vietnamese businesses in trade remedy cases initiated by the US, Son said. The trade office introduces Vietnamese businesses and their products on its website, and helps manufacturers contact distributors, business associations and import partners in the US.

Balancing bilateral trade

In addition to helping businesses promote exports to the US, the Ministry of Industry and Trade has been directing an action plan to develop harmonious, sustainable bilateral trade relations. Along with adding value to exports, Vietnam will import more goods from the US, especially in the fields of energy, agricultural products, pharmaceuticals, machinery and equipment.

While it has become a world leading buyer of textiles and garments and leather and footwear products, the US has no competitive advantages in production of these products, but is strong in cotton supply for the textile and garment industry, Son said. US cotton accounted for half of Vietnam’s cotton imports in 2019, reaching US$1.6 billion in value, and cotton was the second US biggest export to Vietnam. The trade office maintains close contact with the Vietnam Textile and Apparel Association (VITAS) to help the import of cotton from the US. Growing cotton imports from the US are helping rectify the trade imbalance in accordance with the government’s policy.

Reports recently emerged that the US would halt textile and apparel imports from Vietnam due to the effects of the Covid-19 pandemic. After working with the Bureau of Economic Analysis at the US Embassy in Vietnam on March 25, the Ministry of Industry and Trade once again affirmed that the US government was not applying any control measures on textile and garment imports from Vietnam.

Earlier, Vietnamese Ambassador to the US Ha Kim Ngoc said the Vietnamese Embassy was officially informed that the US government does not have any policy on temporarily stopping textile and garment imports from Vietnam. However, in the context of the expanding Covid-19 pandemic, a decline in commercial activities, including the trade in textiles and garments, is inevitable. Businesses need to be calm, take every opportunity to maintain production and exports, review production and business strategies, invest in technology and human resources, look for new partners, diversify products and export markets, and assist the government and the Vietnamese business community to overcome challenges.

Nguyen Huong