VietnamExports Face Numerous Challenges
Although Vietnam has tried to maintain export growth, there are some negative signs in the world market, which will affect its business operations.
According to a recent report by the Ministry of Industry and Trade, export earnings in the first seven months of this year rose by 19 percent to $62.93 billion against the same period last year, mainly thanks to the foreign-invested sector.
The report said June exports were up only 2 percent against May, but export revenue in July experienced a month-on-month decrease of 2.9 percent.
There is growing concern among domestic businesses as export orders seem to be shrinking.
They claimed that with production costs rising they find it ever more difficult to make a bargain in negotiations which often take at least one or two months.
Made-in-Vietnam products are facing the risk of trade protection laws used by other countries. Statistics recently announced by the WTO indicate that protectionism in the world’s 20 largest economies has not decreased over the past seven years.
Since last October, G20 countries have introduced 124 new trade protection measures such as increasing taxes, which affects about 1.1 percent of exports to G20 nations, or 0.9 percent of the world’s total exports.
The Trade Defence Board under the MoIT Competition Authority says that importing countries applied 339 trade restrictions in 2011, many of which are likely to distort trade.
Head of the Trade Defence Board Nguyen Chi Mai says defence measures which used to be applied by developed countries only have now become a common tool in developing nations.
India, the US, and EU are the world’s leading users of anti-dumping measures, she notes.
Instead of introducing administrative sanctions against trade fraud as they did before, the EU and US are applying new punitive measures, including imprisonment.
To help businesses through a hard time, the State bank of Vietnam has asked commercial banks to slash interest rates on loans and restructure old debts.
On their part, businesses also have to work out their own plans to get out of the woods.
Tran Xuan Hai, deputy director general of the MoIT Import-Export Department, says if they are well-prepared, domestic businesses will be able to grasp new opportunities in the near future. He proposes that they strengthen cooperation to make the best use of all available commercial channels.
According to economist Pham Chi Lan, domestic businesses should take the initiative to seek new markets for their products instead of waiting for assistance from the government.
They should gear themselves up for both new challenges and opportunities, she says, adding that it is crucial to take advantage of Vietnam’s free trade agreements (FTA) with other nations.
The wise orientation and vision of business leaders are also important factors in promoting exports in the long run, she says.
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Category: Economy
