09:09 | 14/03/2017 Trade
(VEN) - The Ministry of Industry and Trade (MoIT) is aiming for a higher annual export growth than the 6-7 percent target set by the National Assembly. In the ministry’s view, the series of free trade agreements (FTAs) into which Vietnam has entered are the key to achieving this target.
Continued export growth is expected in 2017
According to the MoIT, despite decreases in the export prices of many kinds of goods, especially agricultural and forestry products, seafood, fuels and minerals, the volume of exports to some markets has kept increasing thanks to FTAs. The FTA between Vietnam and the Republic of Korea (RoK), for example, significantly contributed to a continuous rise in bilateral trade throughout 2016 and early 2017.
The US withdrawal from the Trans-Pacific Partnership (TPP) trade deal could hinder the growth of Vietnamese exports to this market, especially for textiles and garments. In the opinion of economists, however, Vietnamese exports to the US will continue to rise this year due to growing domestic import demand. In January, the US remained Vietnam’s largest market, with export value even growing 0.3 percent.
Vietnam is also negotiating the Regional Comprehensive Economic Partnership (RCEP) agreement as an ASEAN member. Negotiations are expected to end soon so that the agreement can be signed this year. Although it can hardly substitute for the TPP, the RCEP will present Vietnam with export opportunities, because many of the TPP signatories are also members of the RCEP.
Whereas both include the ASEAN member states, Japan, Australia and New Zealand, the TPP also involves the US, Canada, Chile, Peru and Mexico, while RCEP members also include China, India and the RoK. Compared with the TPP, the RCEP will provide Vietnam with more opportunities to penetrate the Chinese, Indian and South Korean markets. Last year, exports to these three markets totaled US$36 billion, equivalent to 20.4 percent of Vietnam’s total export value.
In a joint report on the RCEP’s possible impact on the Vietnamese economy, the Central Institute for Economic Management and the European Trade Policy and Investment Support Project (EU-MUTRAP) predicted that the agreement would increase Vietnamese exports by 2.4 to 3.9 percent, largely by growing exports to Japan and China.
At a recent meeting of the MoIT, Minister of Industry and Trade Tran Tuan Anh emphasized that along with promoting exports to new markets, Vietnam needs to pay special attention to traditional markets of great potential, such as China, because Vietnamese exports are facing non-tariff barriers from new markets.
Statistics compiled by the General Statistics Office of Vietnam show that the total value of Vietnam’s foreign trade reached
US$29.3 billion in January 2017. This included about US$14.6 billion worth of exports, 7.6 percent higher compared with
January 2016, and US$14.7 billion worth of imports, up 15.8 percent.