Trade Sector: Preparations for International Integration

Trade Sector: Preparations for International Integration

The Vietnamese economy will eventually have to open its door to integrate into the world market. However, it is quite late in the day for Vietnam’s international integration process to begin and therefore the country should adapt itself to market mechanisms immediately. This need to adapt was stressed by Deputy Prime Minister Vu Khoan at a national conference on trade on July 22.

The deputy prime minister went on to say that, it was unreasonable to demand foreign suppliers to keep their prices low when 80 per cent of steel ingots and 70 per cent of materials for fertilisers and medicines, and other incentive goods of Vietnam are subject to global fluctuations. He stressed that it was important to reorganise the distribution channels in the domestic market so that it would not suffer seriously from complicated developments in the world market.

Regarding international integration, Minister of Trade Truong Dinh Tuyen proposed each enterprise to analyse their competitiveness and review their development strategy. Tuyen said that according to the roadmap for the implementation of the ASEAN Free Trade Area (AFTA) and Common Effective Preferential Tariff by 2006, Vietnam’s tariff will be more or less be cut to zero per cent.

At the same time, the ASEAN-China Free Trade Area has begun with the Early Harvest Programme, according to which, hundreds of goods of both Vietnam and China will enjoy reductions in tariffs.

Negotiations on the ASEAN-India and ASEAN-Republic of Korea free trade areas are ongoing. Even fiercer competition will arise when Vietnam becomes a member of the World Trade Organisation (WTO) in the coming time.

The minister said that Vietnam would strive to earn US$11.8 billion in exports from now to the end of the year, bringing this year’s total export value to US$23.6 billion. This will create momentum for the country to attain its target of US$ 27 billion in export turnover in 2005.

Minister Tuyen said that Vietnam’s accession to WTO would be no later than 2006 and he asked enterprises to analyse their competitiveness, based on which they should develop the most effective programmes, thus preparing for international integration.

Tuyen also asked localities to review and produce new goods capable of being exported. Localities should develop market organisation and cooperation with the Ministry of Trade to provide support for enterprises in export promotion activities in the coming time. The minister noted that a focus should be given to ensure harmonious benefits for both enterprises and producers.

According to Deputy Minister of Trade Phan The Rue, market diversification and multilateralisation should be promoted in the coming time.

Concretely, Vietnam should maintain its export growth rate of 12 per cent per year in Asian, European and Oceanic markets, and between 15 and 17 per cent per year in North America, South America and Africa. Major markets, where trade promotion activities should be boosted, include the US, the EU, Japan, China, the Republic of Korea, ASEAN, Russia, the Middle East, Africa and South America.

In its export development orientations, the Ministry of Trade will concentrate on developing major goods items, as their high growth rate will create a high export value, helping generate jobs for many people and address other social issues. Goods items, which have yet to gain a high export value but have a high growth rate or quota-free goods items, should also be focused on.

Regarding textiles and garments, the Ministry of Trade will continue to negotiate with the US for an increase in quotas for Vietnamese textiles and garments in 2005. To increase competitiveness of these products, the ministry has proposed a concentration of quotas on enterprises that are capable of exporting their products to major American distributors and importers while developing production relations between these enterprises and other enterprises via business cooperation contracts.

Concerning footwear, market exploration and export promotion need to be boosted in potential markets with a focus given to the US, Japan, the EU and China.

For woodwork products, the Ministry of Trade will diffuse its guidelines on information, market development and trade promotion, helping enterprises import wood materials for the production of exports.

For an increased effectiveness of import and export activities, the conference focused on discussing measures and solutions to be applied in the coming time. Accordingly, mechanisms and policies should be stable for a long time, helping enterprises develop their investment and business development orientations with direct support for the achievement of export targets in terms of products and markets. Policies to encourage major goods or goods with great potential and a high growth rate should be introduced.

Solutions should concentrate on professionalism in trade promotion, trademark development, trading floor development, e-commerce and the establishment of a national trade promotion fund. The export turnover reward mechanism should also be renewed while solutions for restructuring import and export markets need to be implemented. Responsibility and effectiveness in activities of Vietnamese trade counsellors should be increased to promote the provision of foreign market information.

• B.H