Boosting Trade Promotion: Cooperation between Government and Enterprises Needed
At the 2004 national conference on trade promotion held in Hanoi on September 17, 2004 by the Vietnam Trade Promotion Agency (Vietrade), the Minister of Trade Truong Dinh Tuyen said that Vietnam’s target was to engage in more effective trade promotion activities to boost exports. The conference focused on how trade promotion has developed in Vietnam in recent years and what changes need to be made in line with the country’s international integration programme.
Ngo Van Thoan, head of Vietrade, said that trade promotion had seen rapid development in both quantity and quality in recent years. From awareness to action, trade promotion activities have developed on three levels, including State management agencies, trade promotion organisations and enterprises. Investment has focused on the creation of policies and mechanisms for trade promotion activities. Many legal documents relating to trade promotion have been finalised. These include the Trade Law, Government Decree N0 32/1999/ND-CP dated May 5, 1999 on promotion, advertising, trade exhibitions and fairs, and circulars guiding the implementation of these documents. However, many shortcomings remain in management activities. Due to the fact that the existing regulations relating to the management and organisation of exhibitions and fairs are very ‘open’, many enterprises organising or joining exhibitions and fairs in foreign countries do not report the results of their activities to the Ministry of Trade. This has made it difficult to manage and evaluate participation in these activities. Ngo Van Thoan commented that many trade promotion programmes had unjustly competitive aims, which work against consumer interests. Furthermore, many promotion programmes still do not observe the abovementioned regulations. Trade advertising management also shows evidence of overlap. Currently, trade advertising is implemented under the Ordinance on Trade managed by the Ministry of Trade, while under the decree on the function, tasks and powers of the Ministry of Trade, the Government has assigned the Ministry of Trade to perform State management of trade promotion, including advertising. Thoan said that the Government needs to make some adjustments to create more favourable conditions for enterprises.
Vietnam presently has 59 trade promotion centres and agencies, as well as 64 business associations operating in the provision of information, consulting, fair and exhibition organisation services, diplomatic and trade representative agencies and showrooms in foreign countries. These agencies have principally provided basic support services such as market information, and exhibition and fair organisation. Other activities, such as market and product study, consulting services and partner examination, remain limited.
The national trade promotion programme for 2003 and 2004 has been implemented. However, according to statistics of the Corporate Finance Department of the Ministry of Finance, by August 31, 2004 the total amount provided by the Ministry of Trade for the programme had reached VND 30.8 billion (or about US$1.96 million), accounting for 22 per cent of total State budget estimates for the programme.
Principle solutions suggested by Vietrade to improve the effectiveness of trade promotion activities in the future include the finalisation of policies on trade promotion, boosting competence and co-operation among trade promotion organisations, the building of infrastructure facilities for the purpose, and boosting international co-operation. More importantly, it is necessary to set up a fund for trade promotion activities. The State currently provides 0.25 per cent of non-oil export turnover each year to support enterprises in trade promotion activities with between VND 400 billion and 500 billion (about US$25.5 - 31.8 million). However, there is no equitable process for enterprises to access the programme.
Trade promotion is recognised as an important bridge to help Vietnam develop and integrate into the world economy. Apart from financing trade promotion activities, investment should be made in human resource development as this will provide a basis for these activities to become more effective. Deputy Prime Minister Vu Khoan said that the Government and enterprises should actively co-operate in this field.
Following are the comments and input of some officials and enterprises on solutions to improve the effectiveness of trade promotion.
Nguyen Phuong Nam, deputy director of the Hanoi Department of Trade, said that to improve the effectiveness of trade promotion, central and local agencies should improve their co-operation to supervise and guide these activities in an effective manner. It is necessary to improve the quality of information being provided. Moreover, trade promotion agencies should provide targeted information required by enterprises. Additionally, enterprises should receive guidelines on how to build their trademarks, improve their competitiveness by investing in technology and developing relevant products and skills for international integration. The Hanoi Department of Trade will propose that the city accelerates the establishment of a fund for trade promotion to help local enterprises. In particular, the Government should review its trade promotion system in terms of its governance, functions and tasks to increase its effectiveness.
Nguyen Huu Thang, director of Hapro, said that Hapro had developed its business strategies until 2010, including a trade promotion strategy. Trade promotion activities of enterprises would not be effective enough without the proper support of trade promotion agencies. However, to this end Vietrade should develop an e-commerce site linking with famous and prestigious websites around the world to promote and sell locally-made products. At the same time, the organisation of international fairs should be diversified to improve the market position of Vietnamese products.
Pham Gia Tuc, general secretary of the Vietnam Chamber of Commerce and Industry (VCCI), said that as a national organisation with the function of gathering and representing the business community and organising trade promotion activities for more than 40 years, VCCI considered that much more should be done to improve the effectiveness of these activities. Firstly, there should be a unique awareness of trade promotion as a tool, helping enterprises to understand the tastes of consumers and develop positive thinking among consumers of different countries about products of Vietnam. This indicates that trade promotion should be more systematic, creating an effective mechanism to help enterprises develop orientations for their products and services, and develop strategies for accessing and entering markets. The quality and professionalism of trade promotion agencies should be improved to reduce the gap between State agencies and enterprises. Trade promotion activities in Vietnam today lack many other services, including market survey, business strategy development, trademark design and promotion, product introduction, and advertising in publications. Apart from existing activities, more systematic solutions should be created to help enterprises develop in a sustainable manner. It is necessary to allocate more human resources to professional trade promotion organisations, orientating these organisations to focus their trade promotion efforts in markets of great potential. More importantly, co-operation between trade promotion agencies should be established to improve the effectiveness of the whole system.
Colonel Nguyen Anh Hoang, deputy head of the Economic Department of the Ministry of Defence, said that Vietrade should co-operate with agencies acting as the focal point in trade promotion programmes, so that military units could join these programmes. Due to the specific features of military enterprises, it is difficult for the Economic Department to develop trade promotion programmes to help these enterprises. At the moment, proposals are initially approved by the Ministries of Finance and Trade and then submitted to the Government by the Ministry of Trade for final approval. The Ministries of Trade and Finance then give detailed approval for units acting as the focal point to provide finance, ensuring the effectiveness of the programmes. Therefore, authorised agencies of the two ministries should evaluate proposals fully in the initial stage and after the Government gives approval, units acting as focal points can provide finance for implementation.
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