June 03, 2020 00:52

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Export growth has been the lowest for 17 years, which way for Vietnam?

09:35 | 07/04/2020

VCN - In the first quarter of 2020, Vietnam's export growth recorded the lowest level in 17 years. The Covid-19 epidemic in the EU, the United States, ASEAN, and the Middle East is on the rise, whilecountries applying measures to restrict travel will continue to affect Vietnam's import and export activities in the near future.

General Department of Customs guides export of masks
Managing e-commerce activities for import – export goods
Vietnam's export of goods in the second quarter is forecast to be even more difficult than in the first quarter. Photo: T. Binh


According to information released by the Ministry of Industry and Trade on April 1, in the first quarter, total merchandise exports reached USD 59.08 billion, up by 0.5%.Imports reached USD 56.26 billion, down 1.9%. Vietnam's trade balance continued to have a surplus of USD2.82 billion, higher than the surplus of USD 1.46 billion in the same period in 2019.Exports increased by 0.5%

In terms of export perspective, notably looking at the level of the whole period of 2003 up to now, export growth in the first quarter of 2020 reached the lowest level.

However, according to the Ministry of Industry and Trade, this is also a general trend of international and regional trade. In the first two months of 2020, China's export turnover decreased by 17%; South Korea decreased by 1.5%; Thailand decreased by 0.8%; Japan decreased by 4.1%.

From the perspective of commodity lines, the group of agriculture, forestry and fishery products is relatively difficult. The total export value in three months was estimated at USD 5.28 billion, down 8.3% over the same period last year. With the impact of the Covid-19 epidemic, most agricultural products saw a decline in turnover.

“At the beginning of February, when the Covid-19 outbreak began in China, trade with China through the land border gate was almost stagnant. Meanwhile, exports to the EU and US markets are facing many difficulties due to the complicated situation of Covid-19 epidemic spreading in these countries,”said the Ministry of Industry and Trade.

The group of processed industrial goods was not very satisfactory when the total export value of the first quarter was estimated at USD 50.05 billion, only increasing by 1.7% compared to the same period last year.

After phase 1, for processed industrial goods, the supply of raw materials for production and export faces many difficulties due to the heavy reliance on Chinese raw materials.

So far, the basic supply disruption has been resolved, and Vietnam's exports are currently facing a demand breakdown when demand declines due to the Covid-19 epidemic that has spread to EU countries and the United States, which are Vietnam's major export partners.

Promote exports to China

The Ministry of Industry and Trade forecasts that in the context of the Covid-19 epidemic situation in the EU, the United States, ASEAN and the Middle East, there is an increasing trend of the countries applying measures to restrict travel continuing to affect Vietnam's import and export activities in the near future.

Since March, the world has entered a pandemic phase with a dangerous rapid spread. Currently, due to the epidemic, the Governments of countries are issuing measures to control the epidemic such as temporary closure of entry and exit, restriction of gatherings, crowded shopping, and restriction of operations of trade centers, which resulted in lower demand for textile and footwear goods in many markets.

Currently, the main trend of partners is to delay delivery time in March, delay orders in April and May, and temporarily not negotiate orders from June onwards (normally every year, this time has been the time for both parties to negotiate for year-end orders).

“Items such as textiles, footwear and woodwork suffered from double effects from the Covid-19 epidemic due to the improved raw material sources from early March, but now face difficulties in the output market, especially as the EU and US are two main export markets of Vietnam,”added the representative of Ministry of Industry and Trade.

However, the Ministry of Industry and Trade assessed that Vietnam's export of goods also had positive expectations in the future. Specifically, the Covid-19 epidemic has been controlled in China, the import and export activities that are not restricted will be an opportunity for Vietnam in exporting goods to China.

In addition, the incentives of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam-EU Free Trade Agreement (EVFTA) are expected to have domesticproductionpromoting effects.

The anti-dumping tax rate on the US market decreased, resulting in the equivalent recognition of the food safety management and control system on pangasius published by the US Department of Agriculture as a favorable basis for the production of Vietnam's seafood products to enhance competitiveness.

In the future, the Ministry of Industry and Trade will determine to step up the review and selection of alternative markets that are likely to complement the decline in export turnover to the Chinese market due to Covid-19; take measures to promote exports to the Chinese market when the epidemic is basically controlled in this country.

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"The Ministry of Industry and Trade will also proactively report to the Government on the early submission of the dossier of ratification of the EVFTA Agreement so that the President can submit to the National Assembly for approval at the next meeting to boost export turnover sharply at the end of 2020 to make up for the difficulties of the first months of the year,”a representative of the Ministry of Industry and Trade said.

 

 

 

By Thanh Nguyen/BuiDiep