Export surplus has just made achievements, exports face potential risks

In 2020, Vietnam maintained steady growth momentum in import-export activities with a total import-export turnover of US$543.9 billion; trade surplus hit a record high of nearly US$19.1 billion. In 2021, the industry and trade sector hopes to increase total export turnover by about 4-5% compared to 2020; and maintain trade balance surplus.

Many limitations and difficulties

In 2020, Vietnam achieved an impressive trade surplus of more than US$19 billion. However, talking about this result, Minister of Industry and Trade Tran Tuan Anh said although export activities achieved positive results, it could not be happy soon, because "there is always an element of 'risk' involved with 'chance' and vice versa".

In the current context, Minister Tran Tuan Anh said it was necessary to recognise difficulties and limitations and work together to remove them in the future. Some industries that have been the driving force of export growth for many years like electronics, computers and optical products, especially mobile phones, have no longer maintained impressive growth rates as in the past.

Additionally, measures to restrict trade and protect domestic production are increasingly tightened in many countries. Vietnam's export goods are facing a lot of difficulties because new forms have been applied instead of technical barriers like anti-dumping, anti-subsidy and trade safeguard.

Notably, the leader of the Industry and Trade sector said the negotiation and signing of the FTAs have brought many advantages. However, competitiveness, domestic and foreign investment attraction activities, development supporting industry, infrastructure and human resources have not markedly improved to make the most of benefits.

"There are many companies that are not properly aware of the importance of risk management, information technology application, improving product designs and marketing methods in international trade, as well as not actively connecting with domestic and foreign-invested enterprises to improve their competitiveness. In addition, exports are heavily dependent on foreign invested enterprises (FDI)," said Anh.

Talking to Customs News, Dr. Le Quoc Phuong, former Deputy Director of the Vietnam Industry and Trade Information Center (Ministry of Industry and Trade) said Vietnam's impressive export was an achievement but there are many hidden concerns. Typically, Vietnam has a high trade surplus mainly thanks to FDI firms. For many years, FDI enterprises had a high trade surplus, and domestic companies had a large trade deficit. The difference between the two sides is the trade surplus of the economy. Moreover, Vietnam exports to many markets which can potentially lead to its products being warned and limited.

Accelerate export promotion

According to the Ministry of Industry and Trade, in 2021, the Covid-19 pandemic cannot be completely overcome in the short term. Economic activities will be performed in a "new normal" state. Exporting in 2021 continues to face risks.

However, by 2021, Vietnam's export firms have grounds to believe in a positive result. The new generation FTAs, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA (EVFTA) have gone through an early stage of enforcement. With tariff incentives and more market access, they have opened up opportunities to promote the exports of Vietnam’s strong key products to the member countries’ market.

"In particular, if the pandemic in Europe is more positive thanks to the effectiveness of mass vaccination campaigns, this opportunity will be clearer," said Anh.

2021 is also the year of the movement of investment flows of FDI enterprises from regional countries to Vietnam, repositioning the supply chain as well as taking advantage of incentives from the FTAs that Vietnam has signed.

A typical solution to promote import and export this year mentioned by the Ministry of Industry and Trade is to consolidate and expand export markets, make the most of the advantages from the FTAs that Vietnam has signed; diversify import and export markets, especially small and niche ones; diversify the structure of export products, improve the competitiveness of export products, and develop brands.

The Minister of Industry and Trade said in addition to implementing regular professional tasks, through the system of Trade Affairs and foreign trade representative agencies, the Ministry of Industry and Trade would closely monitor market developments, especially the prevention of the pandemic in Vietnam’s major and important partner markets, so the Government and the Prime Minister could proactively take measures to take advantage of market opportunities, minimise difficulties and negative impacts on Vietnam's import and export activities.