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Export markets: Big opportunities in small markets
Commercial counsellors believe that Vietnam still has opportunities to get a high export growth rate in 2008 and subsequent years, despite the global financial crisis.
Sharp export decreases in big markets foreseeable
In the US, sharp purchasing power decreases have led to sharp decreases of imports. According to the Ministry of Industry and Trade, Vietnamese exports shipped to the US in the first eight months of the year just increased by 17.8% over the same period of last year ($7.65bil), while the growth rate was 25.7% in 2007 over 2006.
French importers, who have been facing a lot of difficulties due to slow consumption and high storage fees, have also reduced imports, and have tried to import products under the mode of deferred payment.
According to Tran Trung Thuc, Trade Counsellor to Belgium and the EU, the turnover of goods Vietnam exported to Belgium in the first six months of the year was Euro316.6mil only, a decrease of 12.56% over the same period of last year. Export turnover in Q2 decreased by 22.9% over Q1. Some items, such as briefcases and handbags, decreased by over 50%, while woodworks by 39.3%, and footwear by 31%.
According to trade counsellors to the US, UK, France and Japan, the biggest difficulty now is that export companies have to raise their competitiveness in order to deal with the import decreases. Therefore, Vietnamese enterprises will have to cut their export prices.
Moreover, they said there is a growing trend that many countries are using technical barriers to protect local production, thus putting big difficulties on Vietnamese export companies.
Trying to conquer big markets, while eyeing small markets
Despite the big difficulties, experts say that Vietnam still has opportunities to boost exports in 2008 and the subsequent years by ‘attacking’ new and smaller markets. They believe that the impacts of the global financial crisis on small markets are smaller than those that are affecting big countries. Meanwhile, the demand for Vietnam-made products in small markets, namely ASEAN, western Asia, southern Asia and Africa, remains very high.
South Africa, Morocco and Nigeria, new export markets for Vietnam, prove to favour Vietnamese products in both quality and price.
Vietnam-made electronics accessories, footwear, apparel and farm produce are very competitive in Iran. However, the problem is that trade promotion activities remain weak due to lack of money.
In 2008, the total budget for trade promotion activities of Vietnam is VND126bil, just 25% of the expenses for the activities in the years prior to 2005.
However, Vietnam should not give up big markets. According to Pham Xuan Yem, Trade Counsellor to France, as the export turnover from footwear, apparel and consumer products exports is expected to decrease, Vietnam should boost exports of food, seafood and farm produce to offset the decreases. It is advisable that Vietnam reduces the exports of raw materials, while focusing on exporting high value-added products, like light industrial products.
VNN
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