Effective measures to boost exports
While Vietnam’s exports to key markets, such as the US, EU and Japan show signs of declining there is a growing demand for Vietnamese products in Africa, West Asia and Latin America.
These market import farm products, seafood, garments and construction materials in large volumes. This is considered a good opportunity for Vietnamese businesses to boost exports in 2012.
Tran Dinh Van, Deputy Head of the American Market Department under the Ministry of Industry and Trade (MOIT), says many businesses set sights on Latin America as its total GDP has reached more than US$5,000 billion. In recent years, its economy has grown rapidly with average annual per capita income of US$7,200. However, in the current difficult situation, these countries tend to protect their domestic production.
Van warns domestic businesses that Argentina has increased its import controls. So, every business must declare before placing import orders, automatically under a renewed license. In addition, some businesses want to list selling prices lower than declared at taxation agencies. This will make importers conduct an anti-dumping investigation to Vietnam’s disadvantage.
Nguyen Huu Dung, Vice Chairman of the Vietnam Association of Seafood Exporters and Processors (VASEP), says domestic businesses are also keen to export their products, particularly seafood, to Central and Southern America.
This year the seafood sector will boost its exports to South America, Africa, West Asia, South Asia and ASEAN. In the first half of January, Mexico already ordered more than US$10 million of seafood products, up 92 percent compared to the same period last year. Other countries, such as Venezuela, Brazil, and Ecuador also place bulk orders for Vietnamese seafood, Dung says.
Vietnamese exports to Africa, and West and South Asia have picked up in recent years. Last year’s exports to these markets hit US$8 billion, a year-on-year increase of 60 percent. This year, rice, garment, seafood, and construction materials are expected to gain a foothold over there.
However, the mechanism for payment remains a big obstacle.
Ly Quoc Hung, Head of the Africa-West and South Asia Market Department under the MOIT, says due to weak economic conditions, information infrastructure and services, African countries often apply direct payment or depository participant (DP) methods, instead of opening letters of credit (LC). On the other hand, the banking relationship between Vietnam and African countries is yet to develop.
The department has urged the MOIT and the State Bank of Vietnam to establish relations with central banks of African countries, Hung adds. It will coordinate with the International Francophone Organisation (OIF) and the International Trade Centre (ICT) to arrange for bankers from Vietnam and Africa to discuss tools of payment to help both importers and exporters.