Export of Vietnam: Be notice the movement of shopping priority!

Posted date: 2009-02-04 11:47:33

What are the difficulties causing by global economic downturn for export of Vietnam to EU in 2009?

Answering this question, Mr. Antonio Berenguer, trade counsellor of Europe Union in Vietnam said: “bilateral trade of Vietnam and EU in 2008 reached 15.8 billions USD, increased 13.9% compared with 2007”.

Owing to the limited integration of Vietnam with the world financial system and the restricted attendances of international financial organisations in Vietnam, Vietnam hasn’t influenced directly or immediately by the global economic recession, we can feel the impact of economic downturn only some months later, when the recession effected the main export markets of Vietnam such as EU, America and Japan. The remarkable thing is that the growth rate of EU, America and Japan forecasted to be decreased 0.4%, 2% and 0-1% respectively in 2009.

However, we should not reach conclusion early because the influences of financial crisis has not yet been clear.

Although export of Vietnam may decrease due to global economic downturn, but we should remmeber that people in the main export markets of Vietnam still have demand for goods with cheap price. Moreover, consumers who interested in expensive goods may turn to using Vietnamese products with cheaper price.

In other words, the movement of shopping priority can be realized clearly so that Vietnam export products with the advantages of cheap price can cover the predictable loss.

Do you have any advice for Vietnamese exporters to increase their competitiveness in EU market?

Vietnam is a country which has export oriented economy and depends on foreign direct investment, so I believe that there are some issues that Vietnam should continue to improve to increase its competiniveness.

In my opinion, there are 3 key issues should be considered as follow:

Firstly, Vietnam should continue to obey international standard such as EU, WTO, keep negotiating to have better regulations, improve domestic reform to attract more investment.

Particularly, some main issues of export of Vietnam should be considered such as product’s quality, marketing strategy, production cost, obey trade barrier as well as deal with tax issues. Tax play a very important role in catching foreign direct investment.

For instant, the modified personal income tax recently will lead to the increasing of labor cost for foreigners who have investment in Vietnam, causing the less competitive ability of Vietnam compared with other countries in region. Regarding the trade barrier in Vietnam, the trade liberalisation will increase the export growth rate of country.

EU in particular plans to call off taxes for some main industries such as garment and leather shoes of Vietnam, through this action, Vietnam can save up to 190 millions Euro. As actual demonstration, the respect of international standard will lead to the increasing of export. Above are some important issues that Vietnam should mention to improve its competitiveness in EU market.

In your opinion, how is the trade relation between Vietnam and EU in 2009?

Bilateral trade of Vietnam and EU will keep increasing, however the growth rate will not be as high as before due to the global economic crisis. Anyway, the question what are the specific impacts and extent of these effects are still waiting for the answer of time.

Export products of Vietnam are not expensive, so that it is very hard to forecast exactly what is the priority of consumers, or it is simple that consumers will buy less and turn to buy goods with cheap price, which one is better for Vietnam?

In addition, what is the impact’s measure of consumer’s priority to the export of Vietnam? As I already mentioned above, the important thing related to the investment of EU to Vietnam is the reform of governement.

Translated by: Vina Seafood

Source: VnEconomy