According to the forecast of the World Bank, export - the main driven force of Vietnam’s high economic growth – obtained good achievements in 2005, however, may face difficulties in 2006.
With encouraging achievements of export in 2005 (turnover reaches US$32.26 billion, up 21.6 per cent over 2004), Vietnam plans to reach US$38 billion of export turnover in 2006. Due to many reasons including less diversified export structure and fierce competition, Vietnam’s export growth may slug.
Less diversified export structure
Despite its rather high growth rate since the past five years (17.3 per cent), many specialists hold that Vietnam’s export is unstable, much dependent on few major items.
In the last years, major export items of Vietnam are still crude oil, garments and textiles, footwear, aqua products, rice, coal and recently electronics-computer and wooden products. In 2005 alone, the export revenues of the 8 said-above items are US$21.73 billion, accounting for 67.5 per cent of the country’s total export turnover.
Processed products account for a small portion of export structure, while raw and primarily processed products still account for up to 51 per cent of the total export turnover. Crude oil and coal, two strategic materials, which need reduction, have obtained too high growth rate.
During the 2001-2005 period, coal export gained a sudden growth, reaching more than 44.2 million tonnes in 5 years (8.84 million tonnes per year) compared with the target of 4 million tonnes per year during the 2001-2010 period, with turnover of US$1.389 billion.
Export of items, which have high growth rates, convenient export market and high production capacity such as plastic products, vegetables and fruits, electric wire and cable…are still modest. Specifically, in 2005, export volume of plastic products, vegetables and fruits, electric wire and cable increased 34.2 per cent, 30.8 per cent and 33.7 per cent, while only reaching US$350 million, US$234 million and US$520 million compared with 2004, respectively.
Face many trade barriers
According to the recent warning of the World Bank, Vietnam’s export in 2006 may deal with more difficulties due to market fluctuation caused by dumping charges.
Experts from WB said that Vietnamese footwear and wooden products have high risk of being imposed anti-dumping tariff. Vietnam has before coped with about 20 of such charges from which Vietnamese enterprises often suffered great disadvantages.
The two greatest lawsuits that Vietnamese enterprises have suffered are catfish dumping charge in 2004 and one against shrimp exported to the United State’s market this year. The imposed tariff rates ranging from 4 to 40 per cent has caused producers and exporters of catfish and shrimp in Vietnam big losses. Export turnover of these products decreased dramatically.
Another typical suit is that bicycle made in Vietnam is charged with dumping in the EU’s market and imposed anti-dumping tariff rate of 34 per cent by the EU, resulting in a significant decrease of its export turnover, only reaching US$145 million in 2005, down 39.2 per cent over 2004.
In the past July, the EU launched a new investigation into footwear products imported from Vietnam. EU footwear sector appealed that leather shoes imported from Vietnam increased remarkably in quantity (+79 per cent in 2 years) and their price was lower than that of the market (import price decreased 30 per cent). Therefore, Vietnamese footwear was charged causing losses to the EU’s footwear industry.
Currently, footwear exporting to the EU’s market accounts for 65 per cent of the total export turnover of Vietnamese footwear. Therefore, in case of being imposed high anti-dumping tariff rate by the EC, Vietnam’s footwear industry will face difficulties; thousands of workers will fall in poor circumstances.
The most recently, Egypt has charged Vietnamese enterprises with the dumping of fluorescent lamp. Assuredly, this lawsuit will cause many difficulties to Vietnamese enterprises. It is this product, which was sued in EU, and Vietnam’s enterprises fell in poor condition, suffering a tariff rate of up to 66 per cent.
Wooden products exporting to the US are also facing risk of being sued at any time because the export speed of these products has sharply increased (up 100 per cent) in the past time.
Solutions
The specialists of the World Bank affirmed that Vietnamese export structure is less diversified so that the impacts of investigations and the imposition of anti-dumping tariff on Vietnam are more serious than China, Thailand and India.
According to specialists, to minimise the adverse impacts of trade competition, Vietnam must diversify exports and continue expanding export market, especially new ones. To products which have high risk of being charged with dumping, Vietnam should actively avoid possible suits by controlling the export speed of such products. It requires unification and close linkage among domestic enterprises.
According to the orientation of export strategy launched by the Ministry of Trade recently, Vietnam, on one hand, still focus on controlling the export of major items such as crude oil, garments and textiles, footwear, aqua products; on another hand, assist export items which maintain high growth rate as well as those having convenient export market and production capacity. In which, there are strategic items such as wooden products, electronic products, computer, plastic products, electric wire and cable, coal, vegetables and fruits, handicrafts…
The Ministry of Trade will also encourage discovery, assistance and expansion of new emerging products, promoting the export of such products to disperse risks rather than focusing on a few items. The Ministry will continue guiding enterprises to the markets which we occupy a large market share such as the US, Japan, China, Australia, Singapore, German, England and Taiwan…In addition, we will promote export to the markets that we have great excess of imports over exports such as Thailand, Korea, Hong Kong, Russia, Ukraine, Switzerland, and Indonesia…
Ngoc Dung
Vietnamese
