Trade between Vietnam and Cuba declined to 175 million USD in 2012. Vietnam Economic News spoke with Do Viet Phuong, Trade Counselor of Vietnam in Cuba, about Vietnam’s exports to Cuba.
*There’s an opinion that trade between Vietnam and Cuba has declined due to payment-related problems. What’s your view?
Trade between Vietnam and Cuba in recent years considerably decreased, reaching a mere 175 million USD in 2012. Reasons included the impact of the global economic recession which began in 2008. Based on subjective and objective factors, Cuba has developed the domestic market in the direction of gradually reducing imports and increasing exports. This orientation has been in line with Cuba’s open-door policy and the resolution of the sixth congress of the Communist Party of Cuba.
In the past, Vietnam’s rice exports to Cuba accounted for nearly 70 percent of the total trade between the two countries, but now these have decreased due to Cuba’s agricultural development policy. In the past, due to economic difficulties, Cuba had to imports large volumes of Vietnamese rice, but it met some problems in importing Vietnamese rice due to the geographical distance between the two countries. Therefore, the Cuban government decided to concentrate on boosting agricultural production with technical assistance from Vietnam.
So, I think, we cannot attribute the decline in trade between Vietnam and Cuba to payment-related problems.
* Some businesses complained that the use of 360-day or 180-day deferred payment letters of credit (L/Cs) by Cuban importers had been an obstacle to Vietnam’s exports to Cuba. What do you think of this?
Deferred payment for a long time has existed in cooperation between businesses of the two countries. After the global economic recession began in 2008, due to financial difficulties, Cuban businesses often delayed payments and accepted paying interests for late payments. This happened with all other partners of Cuban businesses, not only those from Vietnam.
Currently, deferred payment L/Cs are widely used in international cooperation transactions. When Vietnamese businesses join a transaction based on this form of payment, they will be secured by a reputable international bank against any frauds.
Many Vietnamese businesses think they will meet difficulties when investing in Cuba due to the geographical distance and payment-related problems. But I believe that with its open-door policy, the Cuban government will offer foreign investors many preferences.
Specifically, the Mariel Special Development Zone is an effort of the Cuban government to create a wave of foreign investment in this country. When they invest in the zone, Vietnamese businesses will be offered preferences in terms of tax, labor and application for business licenses. The Cuban government has also been committed to creating favorable conditions for investors to send their profits abroad (free of tax), using the currencies they want. However, this depends on the banks which Vietnamese businesses cooperate with.
* Domestic businesses highly appreciated the support of the Vietnam Trade Office in Cuba. What’s your view on the office’s role?
Assisting the export of Vietnamese goods to Cuba is a major task of the Vietnam Trade Office in Cuba. We have provided Vietnamese businesses with useful information about the Cuban market as well as a list of products which can be exported to Cuba. We also provide them with consultancy so that they can seek suitable Cuban partners and reputable Cuban banks to cooperate with.
The Vietnam Trade Office in Cuba has maintained tight coordination with businesses to help them overcome difficulties. In late 2012, we provided assistance for the Hanel Limited Company to negotiate and achieve a debt restructuring agreement with the Cuban government; we also helped the Ngoc Anh Investment Joint Stock Company successfully export its products to a five-star hotel in Cuba.
Playing the role of a bridge between Vietnamese and Cuban businesses, the Vietnam Trade Office in Cuba has strived and will make further efforts to provide businesses with effective assistance in the process of boosting Vietnam’s integration into the global economy.-VNA
*There’s an opinion that trade between Vietnam and Cuba has declined due to payment-related problems. What’s your view?
Trade between Vietnam and Cuba in recent years considerably decreased, reaching a mere 175 million USD in 2012. Reasons included the impact of the global economic recession which began in 2008. Based on subjective and objective factors, Cuba has developed the domestic market in the direction of gradually reducing imports and increasing exports. This orientation has been in line with Cuba’s open-door policy and the resolution of the sixth congress of the Communist Party of Cuba.
In the past, Vietnam’s rice exports to Cuba accounted for nearly 70 percent of the total trade between the two countries, but now these have decreased due to Cuba’s agricultural development policy. In the past, due to economic difficulties, Cuba had to imports large volumes of Vietnamese rice, but it met some problems in importing Vietnamese rice due to the geographical distance between the two countries. Therefore, the Cuban government decided to concentrate on boosting agricultural production with technical assistance from Vietnam.
So, I think, we cannot attribute the decline in trade between Vietnam and Cuba to payment-related problems.
* Some businesses complained that the use of 360-day or 180-day deferred payment letters of credit (L/Cs) by Cuban importers had been an obstacle to Vietnam’s exports to Cuba. What do you think of this?
Deferred payment for a long time has existed in cooperation between businesses of the two countries. After the global economic recession began in 2008, due to financial difficulties, Cuban businesses often delayed payments and accepted paying interests for late payments. This happened with all other partners of Cuban businesses, not only those from Vietnam.
Currently, deferred payment L/Cs are widely used in international cooperation transactions. When Vietnamese businesses join a transaction based on this form of payment, they will be secured by a reputable international bank against any frauds.
Many Vietnamese businesses think they will meet difficulties when investing in Cuba due to the geographical distance and payment-related problems. But I believe that with its open-door policy, the Cuban government will offer foreign investors many preferences.
Specifically, the Mariel Special Development Zone is an effort of the Cuban government to create a wave of foreign investment in this country. When they invest in the zone, Vietnamese businesses will be offered preferences in terms of tax, labor and application for business licenses. The Cuban government has also been committed to creating favorable conditions for investors to send their profits abroad (free of tax), using the currencies they want. However, this depends on the banks which Vietnamese businesses cooperate with.
* Domestic businesses highly appreciated the support of the Vietnam Trade Office in Cuba. What’s your view on the office’s role?
Assisting the export of Vietnamese goods to Cuba is a major task of the Vietnam Trade Office in Cuba. We have provided Vietnamese businesses with useful information about the Cuban market as well as a list of products which can be exported to Cuba. We also provide them with consultancy so that they can seek suitable Cuban partners and reputable Cuban banks to cooperate with.
The Vietnam Trade Office in Cuba has maintained tight coordination with businesses to help them overcome difficulties. In late 2012, we provided assistance for the Hanel Limited Company to negotiate and achieve a debt restructuring agreement with the Cuban government; we also helped the Ngoc Anh Investment Joint Stock Company successfully export its products to a five-star hotel in Cuba.
Playing the role of a bridge between Vietnamese and Cuban businesses, the Vietnam Trade Office in Cuba has strived and will make further efforts to provide businesses with effective assistance in the process of boosting Vietnam’s integration into the global economy.-VNA
