Vietnam’s export overcomes difficulties to make breakthrough

The heavy impact of the COVID-19 pandemic makes 2021 an unprecedentedly difficult year for all sectors of the economy as well as import-export activities in particular. However, our country's import-export turnover is forecast to set a new record this year, surpassing 660 billion USD, putting Vietnam in the group of 20 leading economies in terms of international trade.

The production of electronic components at Canon Vietnam Company in Bac Thang Long Industrial Park, Hanoi. (Photo: DUY LINH)
The production of electronic components at Canon Vietnam Company in Bac Thang Long Industrial Park, Hanoi. (Photo: DUY LINH)

In particular, export revenue is expected to reach about 330 billion USD, an increase of more than 17% compared to 2020, which is a very positive result compared to the growth scenario of only 4% to 5%, set out in the Action plan to implement the Government’s Resolution No. 01 of the Ministry of Industry and Trade.

Increases in both quality and quantity

In the beginning of 2021, the Delta variant with a fast spreading rate, severely affected many countries with a shortage of vaccine supply. In Vietnam, the fourth wave of the COVID-19 pandemic has been spreading throughout the localities, forcing the implementation of anti-epidemic measures at the highest level, including blockades and social distancing.

The pandemic also spread widely in industrial zones and several big cities, causing hundreds of thousands of businesses to halt production or organise on-site production. Production is limited over the peak period to prepare export goods for the Christmas and New Year seasons for the EU and US markets, leading to many challenges in export activities.

Deputy Minister of Industry and Trade Tran Quoc Khanh said that the heavy impact of the pandemic has caused many difficulties for export activities in particular and trade promotion in general. Over the past year, trade promotion activities were interrupted, especially during the social distancing period. But thanks to the initiative to overcome difficulties of the business community, together with the efforts of ministries, sectors and localities, export activities have overcome challenges to break through with impressive results. According to estimates, the total export turnover is estimated at 298.97 billion USD in the first 11 months of this year, up 17.3% over the same period last year.

Economic expert Vu Dinh Anh said that the total import-export turnover, reaching a new record of over 600 billion USD and the export growth of nearly 20% is a miracle. Notably, there are increases in both quantity and quality of exports. As many as 34 groups of goods reported turnover of more than one billion USD each, and seven groups of goods posted export turnover of more than 10 billion USD each.

In addition, the structure of export goods has been changed positively, in accordance with the set strategic goals, as the group of processed industrial product continues to be the main driver for export growth, accounting for 86.1% of the total export turnover.

Exports are also diversified with increasing turnover to most markets. Exports to the US reached US$84.77 billion in the first 11 months of this year, up 22.2% over the same period last year, followed by China at 50.47 billion USD, up 16.8%, the EU at 35.7 billion USD, up 11.9% and ASEAN at 25.89 billion, up 23.2%.

According to Deputy Director of the Import-Export Department (Ministry of Industry and Trade) Tran Thanh Hai, new-generation free trade agreements (FTAs) have created visible impacts on good exports. After three years of implementing the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam’s exports of goods to Canada, Mexico and Peru have all grown by 20% to 30% per year. The 10-month export revenue to Canada reached 4.2 billion USD, up 17.6% over the same period last year, to Mexico reached 3.8 billion USD, up 43.9% and to Peru reached 449.3 million USD, up 84.3%.

Vietnam also enjoyed a trade surplus of 325 million USD in the first 11 months of this year.

There remain many difficulties

According to the Import-Export Department, export activities will see certain advantages in 2022, as countries are deploying vaccination programmes and easing social distancing measures, helping restore people's consumption demand for imported goods. The new- generation FTAs ​​have passed the initial implementation stage, moving towards the stage where businesses can better take advantage of incentives from FTAs to boost exports.

Domestically, positive results from a series of government support measures for businesses hit by the pandemic, will help boost production. In addition, the wave of investment shift to restructure the supply chain of corporations will be a new driving force for export growth in the coming time.

However, there also remain many difficulties. Herd immunity cannot be achieved in the short term, while the emergence of a new variant of the SARS-CoV-2 virus with a rapid spread rate, continues to be of great risk to the economy and society of countries worldwide.

Political and commercial conflicts between countries continue to develop unpredictably. In addition, a sharp rise in commodity prices will tend to increase imports, particularly the price increase in raw materials can raise input costs for production. The pandemic will continue to create a negative impact on the shipping industry, pushing up the freight charge and a shortage of shipping containers.

The Ministry of Industry and Trade will continue to coordinate with associations and industries to propose more solutions to restore production and export, while quickly solving bottlenecks for enterprises.

Trade promotion activities will be enhanced and deployed in online forms instead of traditional activities, while enterprises will be helped to improve trade promotion capacity in the digital environment.

Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) Nguyen Hoai Nam said the demand for food and seafood in particular will increase in 2022, when tourism activities recover. In order to support the seafood industry, the Ministry of Industry and Trade should consider restarting the organisation and participation in traditional fairs, strengthening B2B online activities to reach potential markets such as Russia, Australia, and Mexico, and boosting the communication about the industry through the application of information technology.

Nam noted that many seafood enterprises have yet to pay due attention to and invest properly in digitising trade promotional activities, partly due to investment costs and the lack of human resources. Therefore, if there is a national portal to promote key export industries, it will be a practical support tool for businesses in the post-COVID-19 period.

Experts also suggest that the business communities should innovate production activities, create goods of high quality, high added value, and high content of science and technology, as well as shifting to export through official channels to ensure sustainable export growth.