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Vietnam’s trade revenue expected to hit new record high this year
Despite the lingering effects of the pandemic, the Ministry of Industry and Trade forecasts that Vietnam’s total trade value this year may reach a new record of between US$640 – 645 billion, with a slight trade surplus.
The ministry attributed the results to the great efforts of the business community in overcoming the difficulties of the COVID-19 pandemic to maintain and restore production. In particular, major industries such as textiles, garments, leather and footwear are on track to achieve their business targets earlier than expected, despite the pandemic.
From now until the end of the year, all industries have an opportunity to try and regain a growth rate close to before the pandemic broke out. Industries with high exports, such as phones, electronics, machinery and components, are likely to post export growth rates of between 15 per cent and 25 per cent this year, it said.
According to the ministry, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam-EU Trade Agreement (EVFTA) have had positive effects on the national export activities, especially in markets that did not have free trade agreements with Vietnam before.
Thanks to the CPTPP, which came into effect three years ago, the exports of goods to Canada, Mexico and Peru have all grown by between 25 – 30 per cent per year.
The EVFTA, which went into effect one year ago, is a bilateral commitment with incentives and long-lasting value.
At present, 20 per cent of local enterprises have taken export tax incentives from the EVFTA with EUR.1 certificates of origin (C/O). For shipments to the EU worth less than 6,000 euros, local enterprises are allowed to self-certify origin. This helps ensure smaller businesses do not have to spend time applying C/O, while still being able to enjoy tax incentives.
Right now, the biggest difficulty facing local enterprises is a shortage of labour. Southern-based enterprises are facing many difficulties in facilitating a return for workers who have left the region, without which they can not restore 100 per cent of their production capacity.
Due to the impact of the COVID-19 pandemic, the cost of raw materials and logistical services is increasing across the globe. These factors will put pressure on production costs for domestic businesses.
In addition, if localities do not fully comply with the Government’s Resolution 128/NQ-CP, which provides temporary guidance on the “Safe adaptation, flexibility and effective control of the COVID-19 pandemic”, or must facilitate pandemic prevention measures beyond what is necessary, it could cause further instability and affect the psychology of the local businesses and the confidence of investors.
The ministry hopes that the pandemic prevention measures strike the right balance between ensuring people’s safety and not affecting the production and trade activities of businesses.
Vietnam’s trade value surged 22.3 per cent year-on-year in the first 11 months of this year to exceed $599.1 billion, according to the General Statistics Office.
The country exported commodities worth nearly $299.7 billion in the past 11 months, up 17.5 per cent from a year earlier. In the period, there were 34 commodities with export turnover of over $1 billion, accounting for 93.5 per cent of the total export value.
In its latest report on November 30, Standard Chartered projected Vietnam’s export turnover to record an annual average growth of 7 per cent per year, hitting $535 billion by 2030.
The “Future of Trade 2030: Trends and markets to watch” also forecasts that the global exports will almost double from $17.4 trillion to $29.7 trillion over the next decade.
Vietnam is considered an important market contributing to the growth of the global trade, it said.
It also found that 41 per cent of global businesses currently operate or plan to invest in Vietnam within the next five to 10 years. This shows that Vietnam will be one of the important motivations of global trade growth in the next 10 years.
The US and China will continue to be Vietnam’s largest export markets, respectively accounting for 26 per cent and 19 per cent of the Southeast Asian country’s total export turnover by 2030.
According to the study, Vietnam is an emerging manufacturing powerhouse with expanding international trading relationships.
Source: Vietnam News