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Submitted by ctv_en_5 on Fri, 04/11/2008 - 09:00
Vietnamese products’ trade marks are still unpopular on the world market due to their low quality, poor design and high transport and customs costs.

In the current economic situation, how to boost exports and reduce the trade deficit is seen as one of key measures to curb inflation and ensure a sustainable economic growth.

Thai Doan Tuu, Deputy Head of the Trade and Services Department under the Ministry of Planning and Investment (MPI) said that economic efficiency and restructuring of export items are key issues facing Vietnam’s export sector. Over 60 percent of export turnover comes from crude products with a low value while industrial products such as garments and textiles and footwear have a high proportion of manufactured goods for export.

In the balance of trade since 2006, import growth rate has been always higher than export growth rate. In 2007, import surplus reached US$14.2 billion, nearly three times higher than the level of US$ 5.07 billion recorded in 2006. In the first quarter of this year, trade deficit hit US$ 7.4 billion, equivalent to 56.5 percent of export turnover.

According to former Minister of Trade Truong Dinh Tuyen, this dangerous figure is likely to destablise the economy and reduce the proportion of manufactured and assembled products for export leading to a drop in the country’s export earnings.

Restructuring export items
It is essential to restructure export products by providing mechanisms and promoting trade activities. The most important thing is to restructure products rather than focus on export mechanisms, said Mr Tuyen.

At present, all economic sectors can engage in export activities, even private businesses can also export their products across the border to China, Laos and Cambodia. However, Vietnam’s restructuring of export products remains irrational and unchanged for years. Vietnam has a relatively stable and high export growth compared to Thailand as its export growth rate has increased to 35 percent.

Six ASEAN member countries including Thailand, Singapore, Malaysia, the Philippines, Indonesia and Brunei have listed 20 highly valued export products in which electronic components of each country account for up to 17.9 percent or US$5 billion of their export turnover.

Meanwhile, Vietnam earned merely US$2.1 billion from exporting electronic components in 2007.

 

Mr Tuyen stressed that if long-term reforms are not implemented, it will be very difficult to increase export turnover. In particular, with its WTO commitments, Vietnam cannot change the mechanisms. It is also essential to pay due attention to simplifying administrative procedures in exporting products, especially tax and customs procedures. Over the previous period, although remarkable progress has been made in simplifying procedures, they still cause obstacles and waste in terms of time and money, he said.


The former Trade Minister also said that it is necessary to further promote the reform process in order to reduce fees for exporters during business transactions.

 

Making full use of advantages

According to Mr Tuyen, as production and trade manager, the Ministry of Industry and Trade should have a strategy to develop supporting industries. It is important to review all supporting industries to select the most competitive industries to allocate investment.

“We should boost export promotion and invest in developing products which have achieved high export turnover and growth in recent years”, he said.

 

Mr Tuyen affirmed that it is impossible to shift the export structure if we do not have a proper understanding about each specific product category. He suggested that Vietnam should focus on developing its creative industry, including communications, fashion design, trade and advertising. Globally, this industry now has an estimated transaction value of about US$3,000 billion.

 “Vietnamese people’s character is suitable to this industry,” said Mr Tuyen. Currently, Vietnam’s fashion industry is developing dramatically. Investment in this industry is not high, and the industry mostly explores the creativity of people”.

 

In 2007, Vietnam earned US$7.8 billion from garment exports, or US$450 million higher than the set target and up 31 percent compared to the previous year. This year, the garment and textile sector aims to export products worth US$9.5 billion, up 21.8 percent over 2007.

 

According to economists, Vietnamese garment products exported to the US market have to face supervision mechanisms on the price, not the quality. Hence, domestic garment businesses should increase the quality and value of products in order to achieve a high export turnover and avoid anti-dumping lawsuits. In addition, they should also intensify measures to monitor cheap garment products.

 

Using export supporting measures means changing the export structure towards exporting manufactured goods with high added value so as to increase the economic efficiency and export quality.


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