Will exports still reach more than $260 billion?

In the first seven months, there were 33/45 items increased in export turnover compared to the same period in 2018

Imprint of domestic enterprises

According to the latest report of the Ministry of Industry and Trade, by the end of July, export turnover was estimated at $145.13 billion, increasing by 7.5 percent over the same period in 2018, which was lower than the growth scenario as set out by one billion USD. In the first seven months of the year, there were 24 export items reaching over one billion USD. There were 33/45 items increased in export turnover compared to the same period in 2018.

Phones impacted export growth greatly. According to the Ministry of Industry and Trade, export growth relied heavily on mobile phones, so when export growth of phones and components increased slightly, the export growth rate slowed, as well as the sharp increase in exports to some markets such as the EU, China. If excluding phones and components, exports country reached $117.8 billion, increasing by 8.6 percent over the same period last year (increase higher by 1.1 percent than the increase of 7.5 percent in export when including phone items).

There was a sharp decline of agricultural and aquatic products. Specifically, in the first seven months of the year, six of nine key export items in the group of agricultural and aquatic products reduced in export turnover including, namely seafood, vegetables, cashew, rice, coffee and cassava. Calculating the group of agricultural and aquatic products in the first seven months of the year, the impact of declining prices reduced export turnover by $1.22 billion, while the increase in export volume only helped increase by $288 million, it was not enough to compensate the impact reducing export prices.

The Ministry of Industry and Trade pointed out many reasons for the decline in export of agricultural and fishery products, such as the situation of oversupply, backlogged goods of the world of some commodities had increased, it dragged export prices while the quantity did not increase; the protectionism evolved more and more clearly and more complexly; the impact of US-China trade conflict on exports to China and some other markets. Exports of agricultural and aquatic products were still likely to grow thanks to the expansion of foreign markets, but if it did not solve the problem of animal and plant quarantine and quality control, it would also be difficult to have an evolution in the exports of this group.

Besides that, looking from the perspective of exporting enterprises, positive news was the rise of domestic enterprises. The export turnover of 100 percent domestic capital in seven months is estimated at $44 billion, up by 12.2 percent over the same period in 2018, higher than the growth rate of FDI enterprises (increasing by 5.6 percent). Unlike the past, the motivation of the domestic sector in the first seven months did not come from agricultural and aquatic products, it came from industrial products. Export growth of many products such as wood and wood products, textile products and plastic products of domestic enterprises reached positive growth. According to Phan Van Chinh, Director of Import and Export Department, this showed the efforts of improving business investment environment and international economic integration have really impacted and facilitated the production and operation of enterprises, especially in industrial production.

Export growth must reach about $23.2- $23.4 billion each month

From now until the end of the year, Chinh indicated that the export growth would continue to face some difficulties and challenges such as the US-China trade war escalating, causing concern for trade activities and investment. In addition, countries increasingly apply strict food safety and environmental protection standards such as the European Commission (EC) tightening the level of pesticide residues on imported agricultural productsand applying regulations on Illegal, Unreported and Unregulated fishing (IUU) and legal timber use (FLEGT); many countries have issued regulations on traceability, trade protectionism is increasing and some countries are willing to violate WTO rules to protect domestic production.

In addition, Chinh added that more and more countries have participated in the supply of agricultural products, while many countries promote programmes and plans to promote production, towards reducing dependence on sources of imports. Thus it led to increasingly strong competition in export of agricultural and aquatic products. Therefore, agricultural export price was no longer a favourable factor for export growth.

It was forecasted that export growth would reach $261 - $262 billion in 2019, an increase of 7-7.5 percent compared to 2018. Thus, from now until the end of the year, average monthly export must reach about $23.2 –$23.4 billion.

On promoting export growth, Minister of Industry and Trade Tran Tuan Anh asked the Import and Export Department to study and coordinate with other units in the Ministry to develop import and export scenarios in the remaining five months in markets and industries; the Import and Export Department in coordination with the Trade Protection Department reassesses and selects the risk groups that would be involved in trade disputes including major partners as well as important partners of Vietnam. Since then suggesting solutions to coordinate with related ministries and agencies such as Ministry of Agriculture and Rural Development, Ministry of Finance, Ministry of Public Security as well as some localities in order to have solutions to ensure the development in accordance with regulations and at the same time closely coordinating with Vietnam's economic and trade partners to ensure high efficiency.