The reviving global economy is forecast to continue facing hardships in 2014 on weakening consumer demand. In addition, intensifying protectionist trends will inhibit Vietnamese exporters from approaching foreign markets. However, in general, Vietnam will have many export opportunities when its macro-economy improves with inflation controlled, and monetary policy and foreign exchange stabilised. Therefore, the export turnover is forecast to rise 10 percent in 2014 to US$147 billion as allocated to the industry and trade sector by the lawmaking National Assembly.
Impressive export performance in 2013
In 2013, although some exports reduced in value on falling prices and markets shrank, Vietnam still managed to achieve high export turnover thanks to its rapid response and adaptation. Export turnover was forecast to reach US$132.17 billion, an increase of 15.4 percent against 2012 or US$17.64 billion, higher than the target of 10 percent set by the lawmaking National Assembly.
Most key exports achieved growth. In 2013, as many as 22 export categories surpassed the market of US$1 billion. Fruit and vegetable earned more than US$1 billion a year for the first time. This is a good signal for agricultural export development.
Falling prices caused a drop of US$1.28 billion in export value of agricultural products and minerals in the year. The drop in both volume and value of these two commodities reduced their export earnings by US$3.8 billion from a year earlier.
Vietnam saw an increase in manufactured exports as outlined in the Export Development Strategy in the 2011-2020 period, with a vision to 2030. Specifically, manufactured exports will account for 71 percent of exports (maintaining an annual increase of 6 percent), followed by agricultural and aquatic products with 15 percent (down 3 percent), and minerals and fuels with 7 percent (down 3 percent).
Notably, in 2013, the export success in 2013 was seen in the domestic business sector. With export turnover rising 3.5 percent (up 1.2 percent in 2012) and import turnover climbing 5.6 percent (down 7 percent in 2012), domestic companies had signs of recovery.
Foreign direct investment (FDI) enterprises continued to make huge contribution to export growth. If the total export turnover in 2013 increased by US$17.6 billion compared with 2012, telephones and electronics items contributed US$11.6 billion.
Exports to traditional markets were maintained. Due to economic crisis, the purchasing power declined. However, Vietnam still saw growth in traditional export markets like Southeast Asia, the EU, Japan and the United States.
Vietnam enjoyed a trade surplus for the second time since it entered the World Trade Organisation (WTO) in 2007. The trade deficit figure was 29.1 percent in 2007, 28.8 percent in 2008, 22.5 percent in 2009, 17.5 percent in 2010 and 10.1 percent in 2011, but in 2012, Vietnam unexpectedly enjoyed a trade surplus of US$749 million and this trend continued in 2013 with an US$863 million surplus.
Challenges for 2014
Together with the preparation for the formation of the ASEAN Community in late 2015, the signing of Trans-Pacific Partnership Agreement (TPP), free trade agreements with the European Union (EU), the Customs Union of Russia, Belarus and Kazakhstan and with other partners will open up good advantages and opportunities for development in 2014. In addition, the reviving world economy will lead to rising demand for commodities and promises a good year for exporters.
In the coming time, the industry and trade sector will work out groundbreaking solutions like developing new exports for the world market and tapping the country’s advantages for export strategy orientation. The Ministry of Industry and Trade has suitable roadmaps to restrict investment for production and export of low-value, environment-polluting industries.
Regarding export-boosting measures, the Ministry of Industry and Trade will focus on removing difficulties, supporting production and creating additional sources of exports. The sector will seek and expand export markets, and increase budgets for national trade promotion programmes in 2014 targeted at developing and emerging markets.
The sector will also inform exporters to take advantage of favourable conditions for market access and tariff reduction to boost exports to the countries signing FTAs with Vietnam. It will step up administrative procedure reform to facilitate exporters to obtain certificates of origin.
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