Saturday, April 12, 2008

Vietnam exports must take full advantage of opportunities

The WTO has opened doors but Vietnam exports have not taken full advantage of this opportunity. The forum on Vietnam’s 2008 export promotion, themed “Vietnam exports after a year of WTO membership” was held by the Trade Promotion Department under the Ministry of Industry and Trade and Vietnam Economy on April 10 in Hanoi. The forum is a place for economists and speakers to analyze Vietnam’s export activities and promotion over the past time. Competition in price “After a year of WTO membership, Vietnam’s growth rate reaches the highest rate over the past ten years, national GDP in 2007 reached 8.5 percent, Nguyen Thanh Bien, Vice Minister of Industry and Trade said at the forum. Our legal framework and investment environment is improved ceaselessly, attracting foreign investors.” Vietnam is facing challenges such as increasing inflation and trade gaps. During the first quarter this year, imports increased 62.5 percent, pushing the trade gap up 56.5 percent over the same period last year. Vo Tri Thanh, head of the department for international economic integration policy research under the Central Institute for Economic Management (CIEM), said that 2007 export value was little higher than that of 2006, while imports increased dramatically. As a result, the trade gap grew to over 14 billion USD in 2007, in comparison with over 5 billion in 2006. It shows that Vietnam’s trade balance is not stable and faces various challenges. Mr Thanh analyzed that most Vietnamese goods compete with others in price, but pay less attention to quality, as well as food safety and working conditions. Therefore, Vietnam finds it hard to penetrate the US, EU and Japan markets where technical barriers are strictly applied, as Vietnamese exporters consider low price the key factor to compete with goods from other countries,” he said. Agreeing with Mr. Vo Tri Thanh, Mr. Truong Dinh Tuyen, former Minister of Trade, also said that although export mechanisms and policies are now quite broad, in fact our export goods structure is rather backward. Developed countries such as Singapore, Malaysia and Thailand have invested to strengthen high-value goods export, such as electronic and semi-conductor products, while Vietnam is still at a standstill. Our volume of export goods is equal to Thailand’s volume 20 years ago. Inactive enterprises Most speakers and economists at the forum agreed that in order to reduce the trade gap and increase economic growth, exports must be intensified. However, we have to work out specific strategies and plans to achieve the set target. Furthermore, trade promotion over the past years has not been strengthened. “I am unpleasant about trade promotion when I was Minister of Trade. I hope that in the future this work will thoroughly uphold its role so that trade promotion becomes a leading factor to promote exports,” Mr. Tuyen said. Mr. Tuyen added, concerning the limitations of Vietnamese exporters, that export enterprises are still inactive; most of them export their goods according to order-forms but they haven’t taken into account market demand, technical standards and the brand of goods. According to some attendants, export enterprises have not paid attention to derivative tools such option and swap to ensure their interests and avoid losses when the exchange rate changes. Moreover, some businesses are hesitate to use the Euro, reducing effectiveness in export transactions.
(Source: CPV)
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