Economic downturn and strict technical barriers have caused many difficulties for Vietnam's export sector and weakened the competitiveness of Vietnamese goods on international markets. But, given prevailing advantages, Vietnam still believes in optimistic export results in 2012.
Competitiveness is threatened
A conference entitled “Prospects of some Vietnamese export sectors” has been recently held in Ho Chi Minh City, drawing the participation of many specialists and exporters. Attendees asserted that the competitiveness of Vietnam's many exports is being ‘threatened.’ Products with high competitive advantages are going under technical barriers.
In 2011, Vietnamese exports faced more than 1,600 new trade remedies. To learn and understand the new barriers, exporters must regularly monitor and update information to make changes to their goods and comply with market requirements of importing countries. They should also take advantage of different supporting media channels from many organisations.
Mr Le Quoc Bao, Director of the Vietnam WTO/TBT Notification Authority and Enquiry Point (TBT Vietnam), the national contact desk which carries out transparency obligations under the Agreement on Technical Barriers to Trade (TBT Agreement) of the World Trade Organization (WTO), said: Barriers to trade tend to rise, especially technical barriers, with more than 60 branded “concerned level.” TBT Vietnam is under the Directorate for Standards, Metrology and Quality (STAMEQ).
The EU market alone has over 20 new directives of standard and quality control. The demanding market of the United States also has very many new rules, at both state and federal levels. Criteria are even different from state to state and different from the rest of the world. “When economies are not in good condition, countries tend to impose technical barriers to trade, especially on imports,” Mr Bao warned.
Seafood, a top-rate forex earner for Vietnam, is under a heavy pressure of technical barriers, said Mr Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Processors (VASEP). The fisheries sector is facing so many strict regulations of importing countries while it is struggling with the shortage of input materials. In 2011, the Mekong Delta had 573,000 ha of shrimp farms, accounting for 92 percent of the country's farming area of this species. However, because of disease outbreak, a serious shortage of material shrimps is affecting export targets. Without a sufficient source to offset the white-legged shrimp shortfall, this sector will hardly achieve its export targets. In the first three months of 2012, shrimp and tra catfish exports to the EU market fell 19.2 percent and 10.9 percent, respectively. It is a real challenge for the Vietnamese seafood sector to consolidate its market foothold and increase market shares there.
With respect to the wood industry, Mr Tran Quoc Manh, Vice Chairman of the Handicraft & Wood Industry Association of Ho Chi Minh City (HAWA), said: "The wood industry is also having trouble with raw materials which are in the north while processors are in the south. The wood processing industry has stalled for years because of spontaneous and scattered development. Up to 70 percent of wood companies have small and medium size, employ manual labour, and generate low productivity and low product value, while input costs are high. Our workers are skilled and easily trainable because carpentry is a traditional handcraft industry in our country, but Chinese workers are lower paid.”
Optimistic targets set
According to the General Department of Customs, the nation’s export turnover exceeded US$24.8 billion in the first three months of 2012, up 24 percent over the same period in 2011. Exports with earnings of US$1 billion and above included seafood, coffee, crude oil, wood products, garment and textile, computer, electronic appliance and component, and telephone and accessories.
According to experts, exporters should not be too pessimistic about difficult economic situations because consumers may reduce spending on luxury goods, not essentials for their life. In addition, they tend to turn to affordable commodities where Vietnam now holds advantages. Such products as apparel, footwear, black pepper and cashew nut have advantages in some important markets. Bilateral and multilateral trade agreements, especially the Trans-Pacific Strategic Economic Partnership Agreement (TPP) will bring more opportunities for Vietnamese businesses to look to the prospect of expanding markets.
In spite of facing numerous difficulties, experts of different industries envisaged optimistic results. For instance, the garment and textile sector is expected to make a revenue increase of 25 percent to US$25 billion, of which exports will account for US$19.5 billion.
The United States, which generated 35.6 percent of Vietnam’s total wood export turnover in the first quarter of 2012, will be the main export market of the timber industry for the year. Besides, the industry will expand in Indian, Eastern European and Egyptian markets, and beyond.
Known as the capital of the wood industry in Southeast Asia, Vietnam has created a good brand name and competing capacity against its rivals. Moreover, the demand for wood products remains high and many potential markets are still left open for Vietnamese enterprises. This is an opportunity for the industry to overcome difficulties and reassert its position.
The seafood sector sets a target export turnover of US$6.5 billion in 2012. Asia, South America and Africa remain target markets. Remarking on this objective, Mr Hoe said the seafood industry will continue conquering new markets like other South American and African markets, and Russia, among others.
Ha Linh
Vietnamese
