Four groups of policies create momentum for import and export

Dr. Le Quoc Phuong, former Deputy Director of Industry and Trade Information Center (Ministry of Industry and Trade)

This year, imports and exports exceeded US$600 billion for the first time. Besides increasing in scale, how do you evaluate the outstanding results of Vietnam's import-export sector?

Besides increasing in scale, Vietnam's imports and exports also achieved many other outstanding results.

Firstly, Vietnam is increasingly diversifying import-export products. After a few years of renovation, Vietnam still only exports a few items such as rice, some handicrafts, and almost no industrial goods.

However, Vietnam has exported hundreds of thousands of products according to the HS code rating.

Secondly, Vietnam is currently in the top export group in the world with many product groups, such as rice, coffee, cashew nuts, textiles, footwear and furniture.

Third, Vietnam increasingly improves the structure of exports in a positive way, reducing raw exports. The proportion of export processing and manufacturing industrial goods in 2020 is 86%.

In addition, another outstanding result is that Vietnam's export per capita is now very high, from a few dozen USD/person in 1986 to US$3,000/person in 2020.

Is the change and improvement of policies related to import and export the key reason for Vietnam's import and export growth?

Vietnam has set out an economic growth strategy based on export growth. To do that, since 1986, Vietnam has implemented a series of policies, which can be divided into four major policy groups.

Group 1: Domestic trade liberalization.

Previously, foreign trade was monopolized by the State, only a few enterprises designated by the State were allowed to export or import. Since 1986, Vietnam has changed from a foreign trade monopoly dominated by the State to granting import-export business rights to all participating enterprises.

Along with that, since 1986, Vietnam has gradually abolished or lowered most export taxes, maintaining only a few taxes on some minerals.

Particularly with import tax barriers, Vietnam also lowered them. Initially, Vietnam lowered its own tariff barriers, then lowered them under the Free Trade Agreements (FTAs) that Vietnam joined. Vietnam also greatly simplified import-export procedures. Another point related to the domestic trade liberalization policy is Vietnam's transition from a fixed foreign exchange rate regime to a controlled flexible one.

All groups of trade liberalization policies implemented in the country have created very strong conditions for enterprises to participate in import and export activities.

Group 2: Promote international economic integration.

Since 1986, Vietnam has participated in many economic and commercial organizations in the region and the world. For example, Vietnam joined the Association of Southeast Asian Nations (ASEAN) in 1995. Then in 1998 Vietnam joined the Asian Economic Cooperation Forum (APEC); in 2007 joined the World Trade Organization (WTO). Joining these organizations greatly helps Vietnam to promote economic and trade relations.

The second point is that Vietnam has signed a series of FTAs and Bilateral Trade Agreements (BTAs). Among them, the most important agreement that helps promote import-export strongly is the BTA with the US in 2000. This is an agreement that makes the US the leading trading partner of Vietnam. Then, Vietnam continued to sign and participate in 16 FTAs with other partners. Important FTAs that contribute to Vietnam's import-export promotion are ASEAN-China; Vietnam-Japan, Vietnam-Korea, Vietnam-EU, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Another point in the policy of promoting international economic integration is that Vietnam has opened its doors to FDI.

Group 3: Upgrade soft infrastructure.

These are infrastructures that facilitate the development of domestic enterprises, especially those participating in exports. The policy is reflected in the simplification of procedures for enterprises to participate in the market; continuously improve the business and investment environment; cut many administrative procedures; and introduced many policies to support enterprises.

Group 4: Upgrade hard infrastructure.

Vietnam has invested heavily to upgrade infrastructure such as roads, transportation, electricity, water, telecommunications, logistics (ports, warehouses, etc.).

The Customs sector has made many efforts in perfecting the legal system on customs, reforming institutions, modernizing customs, making an important contribution to facilitating import-export activities. What do you think of this?

Over the years, the Customs sector has made a lot of efforts to facilitate the production and business activities of enterprises. Specifically, the Customs sector has perfected the legal system on customs; participated in integration with international customs.

The Customs sector also strongly reformed and modernized its professional activities. In the past, customs clearance procedures took a long time, and were done by paper, now customs procedures are electronic declarations completed 24/7. Vietnam has also implemented the National Single Window, the ASEAN Single Window. Businesses at home can also do procedures, which have helped businesses reduce costs.

In general, all the efforts of the Customs sector have greatly facilitated import-export enterprises, reducing the time of customs clearance even for export or import, but of course, stronger reform is still needed in the near future.

In your opinion, what are the fundamental solutions to help Vietnam's import and export sector grow stably and sustainably, especially in terms of the trade surplus?

Vietnam must switch from the current export growth in quantity to qualitative growth. For example, instead of setting a target of export growth of a percentage per year, change to set a target of what percentage growth each year in value-added. Besides, currently, export growth is mainly based on FDI enterprises are also something to change, switching to rely on domestic enterprises; it must improve added value and export competitiveness by switching from a processing and exporting economy to producing export products with high technology content and localization rate.