Vietnam - Japan Trade Turnover Jumps

The Vietnamese General Department of Customs said two-way trade revenue between Vietnam and Japan reached US$1.6 billion in March 2011, up 46.7 percent from a month earlier. This is one of the biggest monthly values to date. In the first three months of 2011, bilateral trade revenue totalled US$4.3 billion, up 22.5 percent year on year.

 

In March 2011, Vietnamese enterprises exported US$772.5 million worth of goods to Japan, up 66.1 percent from February but down 1.2 percent from January, raking in over US$ 2 billion in the first quarter, up nearly 20 percent over the same period of 2010, or an increase of US$330 million.

 

According to the General Department of Customs, although Japan was hit hard by the earthquake and tsunami in March, its economy still went up, with positive signs of sustained growth in trade with Vietnam. Japan is a major importer of Vietnamese textiles, seafood and machine parts. Machine parts were the largest forex earner for Vietnam in the reporting period.\

 

Vietnam incurred a deficit of US$266.8 million in trade with Japan in the first three months of 2011, nearly double that in the same period of 2010 and accounting for more than 7 percent of Vietnam’s overall trade deficit. These statistical data showed that Japan was the third largest trade partner of Vietnam in March and the first three months of 2011, after the United States and China.

 

Vietnam is expected to see export turnover with Japan grow 18 percent this year. Indeed, crisis in Japan may not negatively affect the Vietnamese economy. To date, no Japanese partners have cancelled any orders from Vietnam and Japan’s committed ODA capital has not been changed.

 

According to economic experts, the economic slowdown in Japan will certainly cause strong impacts on the world, including Vietnam. Perhaps, in the short term, Japan’s ODA grant for Vietnam will be disbursed more slowly, foreign direct investment (FDI) capital from Japan will be reduced, or the number of Japanese travellers to Vietnam will fall. Vietnamese enterprises can still find positive aspects. Japan’s reconstruction will be an opportunity for Vietnamese enterprises.

 

Japan granted Generalized System of Preferences (GSP) to several items from developing and underdeveloped countries, including Vietnam, when they are exported to this country. Vietnam officially signed the Agreement on ASEAN Japan Comprehensive Economic Partnership (AJCEP) on April 1, 2008 and it came into force from the end of 2008. In the framework of AJCEP, Vietnam is committed to eliminating tariffs on 82 percent of Vietnam - Japan bilateral trade turnover in 16 years. Vietnam implicitly benefits from Japan’s preferential treatment for ASEAN. Under AJCEP, Japan removes tariffs on nearly 94 percent of Vietnam - Japan commercial value in 10 years.

 

Furthermore, Vietnam officially became a WTO full member and pledged to reduce import taxes from the current average of 17.4 percent to 13.4 percent in the next 5-7 years. This is a good opportunity for Vietnamese companies to import materials and technologies from Japan for production of high-value, high-tech products for domestic consumption and export.