Ministry proposes ways to improve export competitiveness

According to the Agency of Foreign Trade under the Ministry of Industry and Trade, Vietnamese exports still show some limitations which must be surmounted for them to become more competitive. A report by the ministry's Vietnam Economic News.
According to the Agency of Foreign Trade under the Ministry of Industry and Trade, Vietnamese exports still show some limitations which must be surmounted for them to become more competitive. A report by the ministry's Vietnam Economic News.

In 2013, Vietnam exported 132.14 billion USD worth of products and recorded a slight trade surplus. From 2007-2013, Vietnamese exports grew an average 18 percent per year and were present in almost every country in the world. Many ò these have taken a firm position in hard-to-please markets such as the EU, the US and Japan.

H owever, Vietnamese exports remain low-grade in terms of technological content and added value. Most agricultural products and minerals are exported in their raw or preliminarily processed forms, so their export value remains low. Many key exports are produced on the basis of orders from foreign companies, making domestic businesses dependent on imported materials. Although the export of processing industry-related products has strongly increased, these mostly include labour-intensive ones while the percentage of products made with support of high technology remains limited.

V ietnamese exports have rapidly grown but are vulnerable to external changes, especially price changes and new trade barriers from importing countries. This can be attributed to limited ability among domestic businesses to forecast changes in the world market as well as their weak adaptability and capability to cope with trade barriers.

V ietnam remains slow in developing support industries and so the production of exports still depends on material imports. Price rises in the world market will increase domestic production costs, thus reducing the competitiveness of Vietnamese exports.

Due to these limitations, Vietnamese exports have to fiercely compete with foreign products, especially those from other emerging economies which are striving to improve their positions in export value chains while Vietnam is gradually losing its comparative advantages in terms of labour costs.

According to the Ministry of Industry and Trade, it is necessary to improve the competitiveness of Vietnamese exports. To do this, new, appropriate production, trade (market), investment and financial policies must be put in place. At the same time, it is necessary to set advanced technological standards and tighten supervision to ensure that Vietnamese exports meet these standards - this will improve the competitiveness of Vietnamese exports in terms of quality and their added value in either short or long term.

Regarding production development, it is necessary to promote technological innovation in making products of high export value such as engineered products, wood products, textiles and garments, leather and footwear in order to increase productivity and improve quality; and develop products which are of great export potential and high added value such as construction materials, petrochemical products, rubber and hi-tech products.

It also a need to encourage investment in support industries to meet domestic demand and get Vietnamese businesses involved in global supply chains in fields such as mechanical manufacturing, electronics, information technology, auto components, textiles and garments, leather and footwear, and hi-tech products; while setting standards for export agricultural, forest and aquatic products.

On trade policies, it is necessary to intensify commodity marketing and distribution activities; negotiate and sign agreements on mutual recognition of product quality, facilitating the circulation of export goods; forecast changes in the commodity markets, laws, policies and trading customs of importing countries to assist domestic businesses in export activities.

In addition, it is necessary to concentrate on trade promotion activities targeted at new export products with competitive advantages; build and protect brands for potential export products in major markets; encourage overseas Vietnamese to distribute Vietnamese goods in importing countries; accelerate the construction of trade-related infrastructure in border-crossing areas to boost cross-border trade; and seek updated information about the markets, policies and cross-border trade policies of neighboring countries.

On financial, credit and investment policies, it is necessary to intensify the attraction of investment into export activities; encourage multinational groups and large international businesses to invest in Vietnamese support industries through technology transfers and assistance in the development of highly qualified human resources; and provide loans on a timely basis for businesses which make products for export, giving a priority to small- and medium-sized businesses. It is a call to implement flexible monetary and foreign exchange rate management policies to encourage export; develop storage and transportation-related infrastructure and diversify sources of investment in logistics services; and intensify human resources training and development.-VNA

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