Vietnam’s export of agricultural products sees a high competitiveness
The Human Development Report of Asia-Pacific 2006 published recently by UNDP indicated that the opening to the world trade has accelerated the growth and reduced substantially the low income in many areas of the region. According to the report, Asia-Pacific is acting as a ”factory of the world” with industrial products of low cost, intensive labour and high technology.
However, the Report also warned that trade has increased the inequality not only between countries but also within countries, between regions, industries and households. In addition, many open-door economies in the region, especially in successful East Asia, have created less and less jobs for young people and women - “growth generating no jobs”. It is important as job means positive impact of trade to human development.
Vietnam export : disadvantages in agricultural products and garments
Vietnam is rated in the Report as competitive in export of agricultural products with developed countries in such main products as rice, pepper, cashew nut, coffee, tea, aquatic products. According to Mr Jonathan Picus, senior economist, UNDP Vietnam, aquatic products make up 5 per cent of Vietnam GDP with 40 per cent for export, the third biggest source of foreign exchanges of Vietnam, after crude oil and create some 3 million jobs (5 million jobs expected in 2010). However, Vietnamese aquatic products are confronted with difficulties in export such as high import tax rates, especially the escalation of import tax rates on fish and shrimp in important markets in US. EU, Japan. Also according to Mr Jonathan Picus, Vietnam losses 35 per cent of value for every tonne of export rice as rich countries continue subsidy to that item. It causes losses to Vietnamese farmers and exporters.
Garments are also in the same situation. The Report shows that since the termination of quota on garment in early 2005, poor countries with garment industry depending on quota like Vietnam could withhold in spite of concern for survival in face of quota shock. In particular, when Vietnam accedes to the WTO and is free from quotas, garments will be export item of high growth. Nevertheless, the danger of imposing anti-dumping tax rates remains in important markets in the US and EU. The Report also indicates the sharp decline in the import value of these two important markets causing losses of foreign exchanges for exporters and grim prospect for their export.
Government support needed
Mr Hafiz A. Pasha, UN Assistant Secretary General and UNDP Director for Asia-Pacific believed that trade expansion may cause losses to poor farmers with lower purchasing prices of agricultural products and higher prices of input in fertiliser, irrigation, and public works.
The Report pointed out that developing countries should promote agricultural production by price subsidy, loans of low interest rates, land reform and other measures. Poor countries should be protected by tariffs and price subsidies. The Report suggested that the current Doha round is an opportunity to regulate the inequality in the world trade on agricultural produce, especially the inequality is the product of protectionism by rich countries.
Mr. Pasha also believed that in the long term, non-quota free trade will have a positive impact on poverty reduction and human development in certain countries as the market expansion will create more jobs for garment industry. Although in immediate and medium terms, they may face adverse impact of the closing down of factories and increased unemployment.
According to Mr Jonathan Picus, one solution toward increasing Vietnamese garment export is to upgrade the infrastructure and accelerate Customs formalities and negotiate new trade agreements for more products. Retraining and upgrading technology will create more jobs. The report also suggested restriction of anti-dumping measures and promotion of regional agreements to reduce the dependence on the markets of rich countries.
Quynh Chi
Vietnamese
