According to the Agency of Foreign Trade under the Ministry of Industryand Trade, Vietnamese exports still show some limitations which must besurmounted for them to become more competitive. A report by theministry's Vietnam Economic News.
In 2013, Vietnam exported132.14 billion USD worth of products and recorded a slight tradesurplus. From 2007-2013, Vietnamese exports grew an average 18 percentper year and were present in almost every country in the world. Many òthese have taken a firm position in hard-to-please markets such as theEU, the US and Japan.
H owever, Vietnamese exports remainlow-grade in terms of technological content and added value. Mostagricultural products and minerals are exported in their raw orpreliminarily processed forms, so their export value remains low. Manykey exports are produced on the basis of orders from foreign companies,making domestic businesses dependent on imported materials. Although theexport of processing industry-related products has strongly increased,these mostly include labour-intensive ones while the percentage ofproducts made with support of high technology remains limited.
Vietnamese exports have rapidly grown but are vulnerable to externalchanges, especially price changes and new trade barriers from importingcountries. This can be attributed to limited ability among domesticbusinesses to forecast changes in the world market as well as their weakadaptability and capability to cope with trade barriers.
Vietnam remains slow in developing support industries and so theproduction of exports still depends on material imports. Price rises inthe world market will increase domestic production costs, thus reducingthe competitiveness of Vietnamese exports.
Due to theselimitations, Vietnamese exports have to fiercely compete with foreignproducts, especially those from other emerging economies which arestriving to improve their positions in export value chains while Vietnamis gradually losing its comparative advantages in terms of labourcosts.
According to the Ministry of Industry and Trade, it isnecessary to improve the competitiveness of Vietnamese exports. To dothis, new, appropriate production, trade (market), investment andfinancial policies must be put in place. At the same time, it isnecessary to set advanced technological standards and tightensupervision to ensure that Vietnamese exports meet these standards -this will improve the competitiveness of Vietnamese exports in terms ofquality and their added value in either short or long term.
Regarding production development, it is necessary to promotetechnological innovation in making products of high export value such asengineered products, wood products, textiles and garments, leather andfootwear in order to increase productivity and improve quality; anddevelop products which are of great export potential and high addedvalue such as construction materials, petrochemical products, rubber andhi-tech products.
It also a need to encourage investment insupport industries to meet domestic demand and get Vietnamese businessesinvolved in global supply chains in fields such as mechanicalmanufacturing, electronics, information technology, auto components,textiles and garments, leather and footwear, and hi-tech products; whilesetting standards for export agricultural, forest and aquatic products.
On trade policies, it is necessary to intensify commodity marketingand distribution activities; negotiate and sign agreements on mutualrecognition of product quality, facilitating the circulation of exportgoods; forecast changes in the commodity markets, laws, policies andtrading customs of importing countries to assist domestic businesses inexport activities.
In addition, it is necessary to concentrateon trade promotion activities targeted at new export products withcompetitive advantages; build and protect brands for potential exportproducts in major markets; encourage overseas Vietnamese to distributeVietnamese goods in importing countries; accelerate the construction oftrade-related infrastructure in border-crossing areas to boostcross-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 tointensify the attraction of investment into export activities; encouragemultinational groups and large international businesses to invest inVietnamese support industries through technology transfers andassistance in the development of highly qualified human resources; andprovide loans on a timely basis for businesses which make products forexport, giving a priority to small- and medium-sized businesses. It is acall to implement flexible monetary and foreign exchange ratemanagement policies to encourage export; develop storage andtransportation-related infrastructure and diversify sources ofinvestment in logistics services; and intensify human resources trainingand development.-VNA