Export Promoted after Vietnam's WTO Accession

2007 will be considered as an important milestone for Vietnam to adapt itself with its accession to the World Trade Organisation (WTO). Despite its early preparations for the event, the trade service said there would be many difficulties and challenges to overcome.

 

According to the Ministry of Trade, total retail sales of goods and services are expected to reach VND 660,000 billion, up by 16.8 per cent against 2006. The consumer price index will increase by seven per cent.

 

The ministry has planned to earn US$45.24 billion, up by 17.5 per cent. Of the figure, US$6 billion will come from the export of services. The ministry will concentrate on developing major exports to boost the increase of import turnover and job creation. A change will be made in the structure of exports, focusing on increasing export turnover of items which have export value yet to be high but have a high growth rate and are not constrained in terms of market and quotas.

Import turnover is estimated at US$49.1 billion with priorities given to materials, equipment and technology for industrialisation and modernisation, and the improvement of competitiveness of locally-made goods for export.

 

In 2007, Vietnam will have to deal with the increased promotion of technical barriers and self-defence measures, such as anti-dumping and anti-subsidy for exported goods. Meanwhile, Vietnam’s production remains backward with low a productivity and a high consumption of fuel and materials. At the same time, the quality of human resources is still low, yet to meet the demand of a modern production. These forecasts show disadvantageous factors, producing an impact on production and business activities of Vietnamese enterprises, resulting in high prices and a low investment effectiveness and poor competitiveness of products.

 

Let’s take the textile and garment industry for example. After Vietnam joined WTO, Vietnamese textiles and garments will no longer be constrained with quotas but the export of textiles and garments to the US will be supervised. A sudden increase in the export of textiles and garments to the market may result in the market’s taking self-defence measures This will be a major psychological barrier for Vietnamese textile and garment enterprises.

 

Vietnam has to remove its export and localisation subsidies after it joined WTO. Most countries have to remove their farm-produce export subsidies when they join WTO. Vietnam is not an exception. However, the country is allowed by WTO to maintain some support for its agriculture, such as agriculture promotion, which cannot exceed 10 per cent of output value of goods and services in the field.

 

Furthermore, the Ministry of Trade states in 2007, global issues, such as epidemics and natural disasters, environmental pollution and material exhaustion, will continue to take place, producing a negative impact on domestic production.

 

The Ministry of Trade said it had prepared some major solutions to promote trade in 2007 such as the national trade promotion programme in 2007. Accordingly, the ministry will concentrate on developing the domestic market and the export of goods and services, managing import and export, thus helping reduce trade deficits, as well as promoting the State management of trade.

 

To promote the export of goods, an important requirement is a co-operation among ministries and agencies to settle and overcome difficulties in production, material supply for production of goods for export. An urgent requirement is to create a huge goods volume for export, to take measures to promote competitiveness of industrial products. To that end, a focus should be given to the development of support industries, promoting the supply of materials, semi-finished products and accessories as inputs. This is also a process of standardisation and mutual recognition of Vietnam and foreign trade partners. In 2007, the Vietnamese Government will encourage the export of services via trade promotion mechanisms, issuing systems of statistic norms on services, suitable with the Vietnamese standard.

 

Total export turnover will reach between US$59 billion and 64 billion, with an average growth rate of between 14 and 16 per cent per year in the 2006-2010 period.

Of the figure, export to Asia will witness an average increase of 12 per cent per annum. Throughout 2010, export turnover to Asia will reach US$25 billion with an average growth rate of 10 per cent per annum for Southeast Asia, nine per cent for Japan and 16 per cent for China.

 

Vietnam will strive to increase its trade value to Europe to around US$13.2 billion in 2010 with an average growth rate of 15 per cent per annum.

 

It will increase the export growth rate to the Americas to 21 per cent per annum, earning US$17.4 billion in 2010, of which US$16.2 billion comes from the export to the US.

Vietnam’s major export markets in Oceania include Australia and New Zealand. The country will strive to earn US$3 billion in export value in 2010 with an average growth rate of 10 per cent per annum.

 

In Africa: Vietnam will focus on developing some major potential markets, such as South Africa, Egypt, Morocco and Tanzania. Vietnam has set a target of a growth rate of 20 per cent per annum, earning US$1.5 billion in 2010.

 

Vietnam has set a target of an average increase of between 13.5 and 14.5 per cent per annum in import turnover. Total import value of goods will increase from US$36.5 billion in 2005 to between US$69 billion and 72 billion in 2010. Vietnam will gradually cut its trade deficit to US$8.5 billion each year, or US$43 billion for the whole period, equal to 18.5 per cent of export turnover, and approximately equal to the figure of the 2001-2005 period, whose trade deficit was put at US$20.5 billion, equal to 18.8 per cent of Vietnam’s total export value.