Vietnam Export of Textiles, Seafood, Footwear and Woodwork Becoming Important to the EU

Vietnam Export of Textiles, Seafood, Footwear and Woodwork Becoming Important to the EU

Since the signing of the US - Vietnam BTA in 2000, the bilateral trade between two countries jumped dramatically. However, the rate of increase is starting to moderate. Mr. Christopher Runckel, the director of Runckel & Associates pointed out the opportunities and challenges in two countries' trade relations.

According to Mr. Christopher Runckel, statistic figures showed that the 2004 bilateral trade between two countries reached over US$6 billion. As a direct result of the BTA and of lower customs rates, Vietnam’s exports to the United State rose by some 128 per cent in 2002 and 90 per cent in 2003. The U.S. buys garments, shoes and many other products from Vietnam. During this same period, Vietnam’s imports from the US also more than doubled between 2002 and 2003 although they largely showed little growth in 2004. Vietnam has become a potentially significant buyer of Boeing airplanes, tractors, oil drilling technology, computers, and cotton.

Vietnam is currently increasingly becoming an important exporter to the US market with its main export earners being textiles, seafood, footwear and woodwork. In January 2005, Vietnam was the 33^rd largest exporter to the US, reaching a total value of USUS$ 537 million. Textile exports to the US market hit USUS$227 million, making the country the seventh biggest textile exporter to the US after China, Mexico, India, Hong Kong, Canada and Indonesia and constitute about 3 per cent of the US total textile import turnovers. Seafood in January reached USUS$72 million, which puts Vietnam behind only Thailand, China and Canada in terms of exports for this to the US market. Despite the catfish and shrimp anti-dumping cases against Vietnamese exports, the country’s seafood still remains competitive in the US and holds 7.2 per cent of market shares. Footwear also is a leading export for Vietnam to the US although its export turnovers were only USUS$55 million in January and its market share at 3.5 per cent. Vietnam is also among the top 10 woodwork exporters to the US. In January, woodwork exports hit USUS$54 million, holding 1.5 per cent of the US market share. Although the figure rose only slightly from December last year, it was 170 per cent higher than last year’s same period and continues to grow rapidly with many US companies’ visits to Vietnam. Mr. Christopher Runckel projected that woodworking will in 2005 top footwear in terms of Vietnam’s exports to the US.

He remarked that the extension of the BTA will expand the amount of textiles and garments that Vietnam can sell to the US, which is good news for Vietnam’s garment industry. However, Vietnam garment exports will be under strong pressure this year by a deluge of exports from China which were undercutting Vietnam exports on price and well may mean that export value for 2005 may actually be stagnant although export volume for garments may actually rise.

Mr. Runckel also forecast that, with increased trade, the likelihood of trade disputes will also continue to exist although both sides will increasingly deal with these in the context of a wider and deeper relationship. He continued to urge Vietnam to do more in continuous liberalisation of foreign investment licensing and diversification of approval to lower levels and speed up licensing which could make Vietnam a leader and not a follower in the region in terms of opening its economy to investment and trade. This policy would ensure even greater levels of US investment in Vietnam and other European companies spreading the risk in Asia from China. The opening of economic policy could see Vietnam become a country that is integrated into the region and the world - a Vietnam that is an active proponent of increased trade liberalisation and greater trade in organisations like ASEAN, APEC, the WTO.

• Thi Van