Electronic components are produced for export at Youngbag Vietnam Co in Vinh Phuc province. (Photo: VNA)
Hanoi – Vietnamese exporters have encountered many
challenges due to rising inflation worldwide, the downward trend in commodity
prices and the falling demand in many export markets. In such a difficult
context, the firms are urged to diversify export markets besides traditional
ones, experts have suggested.
Pham Thi Ngoc Thuy, Director of the Office of the Research and Development
Department of the Private Economy described the diversification of export
markets as a matter of survival for businesses in the current context.
However, the firms’ traditional markets would not be easily changed in one to
two years, she said.
To help exporters find new markets to reduce their dependence on some
traditional markets and increase their business opportunities, Thuy emphasised
the leading role of state agencies, ministries and sectors in reviewing whether
new markets had a trade agreement with Vietnam and drawing up policies and
mechanisms that could facilitate Vietnamese exports to these markets besides
the firms’ trade promotion activities.
Closer cooperation between exporting enterprises and the State agencies and
ministries in researching export markets would also be necessary, Thuy said.
Economist Dinh Trong Thinh said in the past time, some Vietnamese firms have
fallen asleep over the victory they had in traditional export markets. This is
one of the reasons for their loss of some orders into the hands of rivals, Thinh
said.
Thinh said he hoped that not only garment exporters but also leather, footwear
and wood firms would draw lessons and innovate their production and market
access processes.
But businesses needed the companionship of State agencies in expanding their
export outlets, especially to those which Vietnam has signed free trade agreements
(FTAs) with, he said.
Businesses also need to enhance their links and connect with trade offices and
embassies in countries Vietnam has inked trade agreements with so that they can
boost their exports and enjoy tariff incentives.
This move also helps firms reduce the cost of market access and of finding and
capturing partners.
Tran Thanh Hai, deputy director of the Import and Export Department, Ministry
of Industry and Trade agreed. He said the efficient exploitation of FTAs would
open up great opportunities for local businesses.
Vietnam had 15 FTAs under operation, Hai said, adding that these FTAs covered
most of the major markets and there was still high potential in increasing
exports there.
Trade promotion was also necessary to help local businesses find new customers and
new business opportunities.
He added that trade promotion activities also played a big role in boosting the
chances of local businesses being able to enter foreign markets and grasp the
requirements of those markets.
The Ministry of Industry and Trade (MoIT) was focusing on diversifying sources
of market information for businesses, especially from Vietnam trade offices
abroad. It had websites providing market research for local businesses to help
them find more opportunities abroad.
According to the General Statistics Office (GSO), Vietnam’s trade turnover
reached 316.65 billion USD over the past six months of 2023, a decrease of 15.2%
compared to the same period last year.
During the period, the country exported 164.45 billion USD worth of goods to
overseas markets, down 12% year-on-year.
This was due to the impact of the global economic slowdown, reduced consumer
demand and difficulties in domestic production, the GSO noted.
Export turnover to key markets decreased, including the US (22.6%), the
Republic of Korea (10.2%), the EU (10%), ASEAN (8.7%), Japan (3.3%), and China
(2.2%).
In a bright spot, the country had five groups with an export turnover of 10
billion USD or more. Of them, electronic products, computers and parts led with
25.21 billion USD, followed by phones and components (24.29 billion USD);
machinery, equipment, tools and spare parts (19.73 billion USD); textiles (17.75
billion USD); and footwear (10 billion USD).
To further promote exports, the MoIT has recommended strengthening trade
promotion activities targeting new and potential markets such as India, Africa,
the Middle East and Eastern Europe as well as markets that are less affected by
inflation and have positive growth, such as in ASEAN.
The ministry also suggested a focus on new markets where the middle class is
growing, such as the E7 emerging markets (China, India, Russia, Turkey, Mexico,
Indonesia, and Brazil) and halal markets such as the Middle East, Malaysia and
Brunei./.
