Vietnam’s Export Potential

10:46:10 AM | 8/14/2014

“Though Vietnam is known as an exporter of agricultural and industrial products such as coffee, pepper, shrimp, tra fish, garments, etc. there are still shortfalls affecting export quality and efficiency”. This was pointed out at a national seminar on export potentials sponsored recently in Hanoi by Vietnam Trade Promotion Agency (Vietrade), Ministry of Industry and Trade.
The seminar was organised to introduce research on export potential and plan of action in the main phase of the programme “Enhancing export competitiveness of Vietnamese small and medium-sized enterprises (SMEs) by local trade promotion network (Vietnam SME Assistance Programme).
Speaking at the seminar, Deputy Minister of Industry and Trade Do Thang Hai pointed out that in the ever-increasing international integration, trade is playing an ever more important role in national economy, accounting for over 60 percent of GDP. According to the plan, in 2011-2015, trade value increases 12 percent a year trying to balance the import by 2020. In reality, import-export value of Vietnam in 2013 was US$264.26 billion, 15.7 percent higher than that of 2012, with US$132.13 billion in export, 15.3 percent higher than previous year, and annual average of nearly US$20 billion in the past three years.
Reports at the seminar showed products of high export potential are cassava, coffee, rubber, pepper and spices, bamboo-rattan, ceramics and other handicraft products. According to Vietnam General Department of Customs, cassava and cassava products valued at US$1.37 billion in 2012 and US$1.1 billion in 2013. In the world market, Vietnamese cassava makes up 27.3 percent of the market. While 95 percent of Vietnamese coffee output is for export with high competitiveness due to comparative advantages in climate, environment, and low production cost, placing it among the top ranking coffee exporters of the world.
Also according to Mr Hai, due to progress in economic restructuring, Vietnamese export increases in manufactured and processed products while decreasing in raw materials, thus increasing export value.
For her part, Ms Nguyen Thi Thu Hang, Chief Export Consultant, pointed out that export products of average potential are fruit and vegetable, tea, honey, cashew nut and others. Meanwhile products of low export potential are rice, canned sugar, and embroidered products. Though increasing in quantity in recent years, Vietnamese rice export value failed to increase proportionally. In 2013, with slight reduction compared to 2012, the rice export value was maintained at nearly US$3 billion (6.6 million tonnes).
Ms Hang added that while the world rice market is surplus in reserve and with additional suppliers, Vietnamese rice export will face new difficulties in the years to come. Though rice remains strategic agricultural export of Vietnam, experts rated it at low level.
According to the seminar, the causes affecting export quality and efficiency are: low added value, low quality of export products, and unstable advantages in low cost production, especially in such sectors as electronics, garment and footwear.  
In addition, the major shortfall of Vietnamese SMEs is poor knowledge in foreign markets and low capacity in world trade. It is a big handicap for export in a highly competitive world market with ever-developing information technology. In Central Vietnam, there are only a dozen enterprises producing handicraft products for direct export. The remaining are just satellites for exporters in Hanoi and Ho Chi Minh City.
Reports at the seminar also made such recommendations as: developing a market information network with updates on each sector; implementing government preferential treatment on supporting industries especially in raw materials input; enhancing linkages in the supply line and developing trademarks for export items. 
In conclusion, Deputy Minister Do Thang Hai reaffirmed that Vietnam is actively negotiating free trade agreements (FTAs) with major partners to open markets and increase Vietnamese exports. The new developments will facilitate the production of new products of high export potential together with existing traditional products.
The programme enhancing export competitiveness of Vietnamese SMEs by local trade promotion network is a technical assistance project financed by Swiss government ODA for 4 years (2013-2017). Two direct recipients are Trade Promotion Agency/Local trade assistance organizations and SMEs.
The programme has been implemented nation-wide, focusing in major cities according to their trade assistance capacity, sustainable export potential and commitment with the programme. Three bridgeheads of the programme are Haiphong, Da Nang and Can Tho.
Evaluation of export potential is one of the main activities in the Start- off of the programme (June 2013 - December 2014). The evaluation will identify products of national and regional export potential. Subsequently, the programme will focus resources to support export in the main period (2015-2017).
Thu Ha