Protect businesses and key border gates to ensure dual goals

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protect businesses and key border gates to ensure dual goals
Tran Thanh Hai, Deputy Director of the Import-Export Department (Ministry of Industry and Trade).

What do you think about the export results achieved in the first four months of this year, especially the promotion of exports to markets Vietnam has signed and implemented free trade agreements (FTAs) with?

The Covid-19 pandemic is having a very negative impact on the world economy as well as in Vietnam, so the achievements of imports and exports in general and exports in particular in the first four months of this year are remarkable.

For a number of groups that are strongly affected in 2020 such as textiles and garments, leather and footwear, exports have all decreased by 10% or less, the first four months of this year have seen growth again. Textile and garment exports are estimated to increase by 9%, leather and footwear is estimated to rise by about 18% compared to the same period last year. Vietnam has 19 products with export turnover of more than US$1 billion. These items account for nearly 85% of total export turnover.

From a market perspective, taking advantage of FTAs to promote exports, the market with the leading export growth in the first four months of the year is the US with an increase of 50%, followed by the Chinese market with a growth rate of 32%, while the EU achieved a growth rate of 18%. In new markets with FTAs through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) like Canada and Mexico, Vietnam’s exports recorded a growth rate of more than 20% in the past four months.

Why have Vietnam’s exports achieved such positive results?

This time last year, Vietnam began to face difficulties and supply disruptions due to Covid-19. The situation has improved this year, so the export performance of the first four months of this year is higher than in the same period last year.

The current situation of isolation in the world also causes the problem of limited production capacity of some regions. Therefore, regions and markets, especially Europe and the US, tend to turn to looking for sources of goods in Asia, of which Vietnam is an important source.

In addition, Vietnam is still controlling the pandemic well, maintaining and expanding production capacity, meeting the demand in the world market and boosting exports.

Have there also been many difficulties and challenges that have had strong impact on Vietnam’s commodity exports?

The most adverse impact factor is that the pandemic is not under control in the world. Vietnam’s economy is deeply integrated and the dependence between Vietnam’s production and export activities is closely tied both in terms of input as raw material supply and output as export markets. In the event of an outbreak of the disease, it will significantly affect Vietnam’s export activities.

The next most important factor is the continuity of the supply chain and logistics. For example, the increase in container freight rates since the end of 2020 as well as incidents and congestion in the Suez Canal show that the current business environment has potential risks and unexpected factors. These are the things that firms must take into account in the process of operation.

In addition, other factors like the return of trade protectionism through the imposition of anti-dumping duties and safeguard duties on Vietnamese products are also notable. This situation is increasing, significantly affecting Vietnam’s exports in the near future.

Many argue that, to ensure the “dual goal” of both effective anti-pandemic and socio-economic development, it is necessary to improve pandemic prevention solutions as well as support for the manufacturing sector. What do you think?

Vietnam has more than one year of experience in fighting the pandemic. The essential element here is to have calm and take the initiative. Secondly, authorities and agencies also need to focus on protecting businesses and key border gates. From an economic perspective, these are the foundations to help Vietnam maintain and develop its economy and overcome the challenges of the pandemic.

In addition, Vietnam also needs to zone the right zones, avoiding widespread social-distancing because if it fails to do that, it is likely pandemic prevention measures will affect production activities, making Vietnam not achieve the “dual goal”.

In general, maintaining normal production activities of firms is extremely important today, but in the context of the returning pandemic, this is a very challenging goal. I think measures to support businesses need to be more practical. Last year, the State’s support packages for those affected by the Covid-19 pandemic had a large value, but many businesses reflected that the access and benefits from these support packages was not really much.

Practical support is shown in each specific context. For example, at present, most manufacturing firms use electricity. So, can the State consider for supporting electricity consumption? With the electricity bills of firms, the State can consider how much percentage to pay. Thus, firms will not need to have records to prove that their businesses are damaged or affected by the disease, but businesses will still benefit from the support policy of the State.

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