Benefits from free trade agreements are expected to help Vietnam earn more money from its targeted export turnover for 2013, according to the Ministry of Industry and Trade.
At its recent meeting with localities, the ministry (MoIT) reported that the country’s total export turnover for the whole 2013 was projected to be $126.1 billion, higher than $114.6 billion last year and $124.3 billion earlier targeted for 2013 by the government in late November.
“Exports have been the most outstanding point in the country’s economic situation and this must continue being repeated in this year,” said Prime Minister Nguyen Tan Dung, who chaired the meeting.
Dung said the MoIT’s export turnover target for 2013 was feasible. But he said it could be higher if exporters take more advantage from the free trade agreements (FTAs) that Vietnam had inked with foreign partners like Japan, Chile, ASEAN and ASEAN+2 including China and South Korea.
According to the MoIT’s Export-Import Department, thanks to these FTAs and their preferential import tax rates, Vietnam’s export turnover to these markets last year strongly grew, with 30 per cent from ASEAN, 22 per cent from Japan and 58 per cent from South Korea.
Under the ASEAN-South Korea FTA, South Korea will by 2015 reduce 30 lines of import taxes for Vietnam's key products like farm produce, chemicals, paper, steel, machinery and footwear. The tax rate for footwear will be decreased from 0.26 per cent in 2010 to zero per cent in 2015.
“These FTAs occupied $53.5 billion out of Vietnam’s total export turnover of $114.6 billion in 2012. After Vietnam inks an FTA with the EU in 2014, the export turnover from Vietnam’s FTAs would hold about $86 billion of the country’s total export turnover,” said the department’s director Phan Van Chinh.
“But many local exporters are still not aware of the advantages from FTAs. They should boost exports into these markets,” Dung said.
At present, Vietnam is negotiating bilateral FTAs with the EU, South Korea and the Tariff Union including Russia, Belarus and Kazakhstan. The country is also conducting negotiations of the Trans-Pacific Partnership Agreement’s (TPP) with other nine member states. It is expected that TPP would annually bring Vietnam an export turnover totaling $36 billion, equivalent to 15.5 per cent of gross domestic product by 2025, according to the MoIT.
Last year Vietnam for the first time since 1993 earned a trade surplus, totaling $284 million. Specifically, total export turnover reached $114.6 billion, up 18.3 per cent on-year and total import turnover touched $114.3 billion, up 7.1 per cent on-year.
However, the MoIT said in this year, the country might suffer from a trade deficit level of 8 per cent ($9.9 billion) of total export turnover. Shrinking local production in 2012 had reduced imports, contributing to a trade surplus. However, the local production had been recovering now, which would result in bigger importation of goods and materials.
The MoIT’s Minister Vu Huy Hoang said the MoIT would boost exports while closely controlling imports in 2013 in a bid to generate more jobs for local workers and ensure social security.
Specifically, he said, Vietnam would boost exportation of agro-forestry-aquatic products (expected $21.6 billion, up 3 per cent on-year), minerals ($12.2 billion, up 4 per cent on-year), and processing goods ($83.5 billion, up 12.8 per cent on-year).
Besides, Vietnam would strictly control importation of precious metals and stone, components for cars with nine seats at most and for motorbikes. Also the country would limit importation of consumer goods, completely built cars and motorbikes.
Thanh Thu | vir.com.vn
Business & Investment Opportunities
Saigon Business Corporation Pte Ltd (SBC) is incorporated in Singapore since 1994. As Your Business Companion, we propose a range of services in Strategy, Investment and Management, focusing Health care and Life Science with expertise in ASEAN 's area. We are currently changing the platform of www.yourvietnamexpert.com, if any request, please, contact directly Dr Christian SIODMAK, business strategist, owner and CEO of SBC at firstname.lastname@example.org. Many thanks.