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Import-export changes in 2009
The financial downturn and economic recession in major export markets like the US, the EU and Japan was not good for Vietnamese exports. However, when taking exports for the year as a whole, the numbers look not so bad.
The financial downturn and economic recession in major export markets like the US, the EU and Japan was not good for Vietnamese exports in 2008. However, when taking exports for the year as a whole, the numbers look not so bad. Ministry of Industry and Trade statistics show that the country exported US$63 billion worth of products in 2008, 29.5 percent more than in 2007, a growth level not seen for many a year. For 2009, the National Assembly has set a target of 13 percent export growth with US$72 billion in exports.
This is a goal which appears to be nothing less than challenging but, the Ministry of Industry and Trade has presented a series of measures that it hopes will lead to increased exports and a reduced trade deficit.
To increase exports, the ministry’s solution is to continue exporting to traditional markets while trying to enter potential markets.
In 2009 the Government will focus on export and trade promotions, said Minister of Industry and Trade Vu Huy Hoang, with priority given to increasing exports to potential markets in Africa and Latin America. Businesses are to receive direct support to do this.
The Ministry of Industry and Trade has also proposed that the State Bank of Vietnam manage the exchange rate in a way that favors businesses, particularly export companies. The ministry suggested that local commercial banks should loan more money to businesses and businesses should be able to borrow money without needing to put up collateral. In addition, the range of businesses that are eligible to receive loan capital should be expanded to include those producing and selling rice, textiles and garments, footwear, rubber, mechanical equipment, iron and steel products and construction materials. To increase exports of rice, agricultural produce and seafood, credit guarantee services should be made available.
Regarding finance, the Ministry of Industry and Trade proposed that for now duties on input materials for export production, things like plastics, raw seafood, raw cashews and thread, be eliminated to help businesses lower their production cost and become more competitive in price. The ministry suggested that in the near future the export duty on furniture made from imported material be removed.
In addition, the Ministry of Industry and Trade suggested providing support to farmers as allowed by World Trade Organization (WTO) regulations and stimulating trade promotion, particularly in large and traditional markets in North Africa, the Middle East, and Latino-America at both governmental and business levels.
It’s expected that imports will increase in 2009 as they did in 2008 thanks to the Government’s efforts to contain inflation, reduce expenses and spend less on projects that are not urgent or necessary. To restrict imports, import tariffs have been increased, taxes need to be paid before goods clear customs and automatic licensing system is in use.
Because the price of input materials like steel products, steel billet, fertilizer, and petroleum has plunged 30-50 percent since 2008, the import value is expected to go down in 2009 despite a rise in the import volume. When the Dung Quat Oil Refinery does go into operation, it will provide petroleum products to the domestic market and the quantity of imported petroleum products will fall. Vietnam is expected to import around 11 million tonnes of petroleum products in 2009 spending about US$6 billion. Because exports are falling, imports of input materials are also falling.
To reduce the current trade deficit, the Ministry of Industry and Trade would like to see restrictions placed on imports. This would include technical barriers regarding quality. It would like to see an increase in the production of items that could replace imports. The Vietnamese Government and the Ministry of Industry and Trade are very eager to sign bilateral and multilateral agreements that establish free trade areas. This, it is felt, would increase exports while restricting imports to create a more favorable trade balance.
vietnamnet, vneconomy
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