06:00 | 10/05/2020 EVFTA
(VEN) - The Covid-19 pandemic has posed difficulties for Vietnam’s exports to the US and the EU.
According to the General Statistics Office of Vietnam, in the first quarter of 2020, Vietnam’s exports reached US$59.08 billion, up 0.5 percent over the same period last year. Meanwhile, imports totaled US$56.26 billion, a drop of 1.9 percent compared to a year ago. As a result, Vietnam recorded a trade surplus of US$2.8 billion in the first quarter of the year, higher than the US$1.5 billion in the same period last year, despite the Covid-19 pandemic sweeping its major export markets.
In the second quarter of the year, however, the situation appears gloomier, especially due to a sharp drop in Vietnam’s exports to the US and the EU.
Bui Trong Tu, deputy director of the Trade and Service Department under the General Statistics Office of Vietnam, said almost all export orders received by domestic businesses from the two major markets have been suspended. If the Covid-19 pandemic continues with its complicated and unpredictable effects in the second quarter of the year, key exports such as garments and textiles, leather and footwear, and seafood are likely to suffer.
Several major importers from the US and the EU have temporarily halted deliveries of Vietnamese garment and textile, leather and footwear orders, while no new contracts are being signed.
In addition, some wood processing and export businesses will be forced to reduce their capacity by 70 percent if the pandemic shows no signs of slowing down.
The US and the EU account for over 50 percent of Samsung Electronics Vietnam export value. Samsung Electronics’ global sales in 2020 are forecast to decline with the company’s export target being adjusted to approximately US$45.5 billion in contrast to US$51.38 billion last year.
Difficulties also await the shift in exports of key commodities to other markets, such as India, the Republic Korea, and Japan. In particular, Vietnam’s garment and textile, leather and footwear exports to the three markets will face fierce competition from China.
The recovery of Vietnam’s export growth is largely dependent on the US and the EU’s ability to contain the Covid-19 pandemic. If the pandemic is controlled, Vietnam can expect major export opportunities under the EU-Vietnam Free Trade Agreement (EVFTA), which will be ratified by the Vietnamese National Assembly in May 2020 and is expected to take effect this year.
|General Statistics Office of Vietnam Director-General Nguyen Bich Lam said Vietnam’s exports to the EU could increase by 20 percent in 2020 once the EVFTA goes into effect, with seafood the biggest winner.|