Last updated: Thursday, March 23, 2017
Enhancing Export Competitiveness to ASEAN MarketsPosted: Friday, November 25, 2016
The ASEAN Economic Community (AEC), established in 2015, is expected to create a push to Vietnam trade. However, the access to this potential market is still a big challenge for many Vietnamese companies.
This was the main topic of a recent workshop to this effect hosted in Hanoi by the Vietnam Trade Promotion Agency (Vietrade) in cooperation with by the Asia-Pacific Markets Department under the Ministry of Industry and Trade. The event aimed to help Vietnamese companies to update information on trade development with ASEAN countries.
Speaking at the workshop, Mr Ta Hoang Linh, Deputy Director of Vietrade, affirmed that AEC, formally founded on December 31, 2015, has created new opportunities for businesses to expand their export market shares to regional markets. In addition to promoting trade, the community will help member countries boost economic growth, create jobs and attract foreign direct investment as well as improve production and competitiveness. Particularly, AEC has paid attention to narrowing the development gap among ASEAN countries, which has also drawn the interest of Vietnam.
Statistics from the Ministry of Industry and Trade showed that ASEAN has been one of the most important trade partners of Vietnam. After 10 years, the bilateral trade value between Vietnam and ASEAN rose nearly 13 folds from US$3.3 billion in 1995 to US$42.1 billion in 2015. The average growth rate of Vietnam’s exports to ASEAN was 17.1 per cent per year. The country's export turnover to ASEAN increased by over 18 times from US$1 billion in 1995 to US$18.3 billion in 2015.
Apparels, footwear, fertilisers, agricultural products, foods and construction materials will have more opportunities to approach ASEAN countries. Before the advent of AEC, Vietnam utilised advantages in intra-bloc free trade agreements to boost its export but it did not seemingly make the most of advantages.
Mr Do Quoc Hung, Deputy Director of the Asia-Pacific Markets Department, said Vietnamese exporters will enjoy tariff preferences. Tariff barriers are removed and nontariff barriers are being cut to facilitate the flow of goods and services of Vietnam in the ASEAN region.
He added that Vietnam’s merchandises will also have the opportunity to improve their competitiveness and value and approach other markets apart from ASEAN because ASEAN inked free trade deals with many non-ASEAN partners like India, China, Australia and New Zealand.
However, Vietnam’s goods will face fierce competition from ASEAN countries as it will have to open its market for products from other nations in the region. For example, the garment and textile industry will confront big rivals from ASEAN like Thailand and Indonesia while it has not been able to create a strong base of input supply. Improving competitiveness is the only way for Vietnamese enterprises to expand their presences and assert their positions.
To do so, Vietnamese companies need to renew their technologies, improve product quality and raise localisation rate to take advantage of opportunities to export to the ASEAN market. They also need to give priority to building brand name based on quality and added value. Besides, they need to build distribution channels in export markets to grasp new opportunities generated by AEC.
Besides, they also should enhance their studies and trade promotion activities to fully exploit market potential and raise their knowledge of integration to better respond to new developments. This is also an opportunity for them to restructure exports to increase added values and elevate Vietnam to a higher position in global value chains.
At the workshop, many attending businesses asked authorities to take measures to support local companies, especially in information, to boost exports not only to traditional markets but also to new potential ones in the region.
In this regard, the Ministry of Industry and Trade will work with the Vietnam Trade Promotion Agency to strengthen cooperation with chambers of commerce in foreign countries to provide information they need.