Two-way turnover reaches $69.3 billion
According to the Ministry of Industry and Trade, from the beginning of this year to the end of August, although affected by the impact of the Covid-19 pandemic, two-way trade turnover between Vietnam and the Americas reached $69.3 billion, 11.8% higher than the same period last year.
It is notetable that Vietnam’s exports to this market increased by 15.9% over the same period in 2019. Regarding direct investment, by the end of August 2020, 28 American countries invested in Vietnam with 1,530 projects and total registered investment capital of about $22.85 billion.
According to many Vietnamese Trade Counselors in the American market, in the context of the Covid-19 pandemic and changing global supply chains, Vietnam has become more attractive to many American partners. The case of Canada is a typical example.
Ms. Do Thu Huong, Vietnam Trade Counselor in Canada, said that Vietnamese enterprises have many more opportunities to cooperate with Canadian enterprises.
In recent years, the Government of Canada has pursued a policy of trade diversification, prioritizing the development of trade relations with Asia. Besides, the US-China trade war directly affects the market strategy of some Canadian companies. The Covid-19 pandemic has revealed the downside of the supply chain, prompting businesses to reconsider where to buy and produce, to ensure to supply market demand at low prices. Asia is still interested in setting up supply chains by Canadian businesses.
“It must also be said that Vietnam and Canada are complementary economies, not in direct competition, especially with agricultural and food products, so the opportunities for cooperation are broad. Vietnam and Canada also joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Vietnam has a good anti-epidemic strategy, is considered to be a country with a stable political situation, security, young population. This is the comment of the leaders of large Canadian corporations that the trade office received during the recent exposure,” Ms. Thu Huong said.
In terms of specific areas and items of cooperation, Ms. Thu Huong said that when the trade office worked with Canadian businesses, businesses found suppliers and facilities to locate Canadian factories in Vietnam, especially in the field of supporting industries. Many berths installed in Canada worth $40-50 million are manufactured in Vietnam and assembled in Canada.
Similar to Canada, the opportunity to boost exports of goods to Argentina is also open to Vietnam. According to Ms. Pham Hong Trang, the third secretary in charge of the Vietnam Trade Office in Argentina, in 2019, Vietnam’s export turnover to Argentina recorded growth of more than 30%, exceeding the threshold of more than $500 million for the first time.
In particular, Argentine businesses have fairly good assessment of the quality of Vietnamese goods. This is a highly protectivemarket.Many key products of Vietnam such as textiles, leather and footwear face strong competition from Chinese or Brazilian products on price. However, due to the pandemic, Argentine enterprises are also reorienting and diversifying their supply sources, avoiding dependence on a few fixed markets.
“This is the time when Vietnamese goods have a chance to replace the traditional products that Argetina still imports in its supply chain. In addition, in the short and medium term, potential Vietnamese products can be exported to this market such as sports footwear, wooden furniture, bamboo and rattan, home decoration, some medical productsandsupplies.Currently, the Governments of both sides are actively discussing the possibility of negotiating a trade agreement, so maybe in the near future, tariff barriers will be partially removed, Vietnamese enterprises will experience more convenience,” said Ms. Trang.
Overcoming challenges, seizing opportunity
Although initially entering the American market, it must be confirmed that the export results achieved are still relatively modest compared to the potential. The Vietnamese business community and American partners still face many challenges in business cooperation such as: distant geographical distance, no direct passenger and freight transport routes; language differences and the lack of up-to-date information on policies to attract foreign investment.
“In addition, Vietnamese enterprises have not yet understood the regulations on imported goods, food quality and safety and many specific rules of this market. Therefore, it is very important to learn about customs, practices, experiences and trade in products and it can also be said to be vital to Vietnamese enterprises,” Deputy Minister of Industry and Trade Do ThangHaisaid.
From a business perspective, Mr. Pham Hoang Viet, Vice Chairman of An Phat Holdings Group (APH), said that the difficulty of exporting to the American markets is to ensure the quality for consumers. In particular, a number of partners in the Americas, especially in the US, often offer their own requirements for factories to ensure hygiene, standards for improvement of production processes.
“The Americas are a large market, considered the most difficult customer and have many separate standards for export businesses and products. Therefore, there is no other way for businesses to learn and research the market carefully before bringing products to this area. Enterprises must prove their actual capacity to their partners to meet the export standards,” said Mr. Pham Hoang Viet.
The Ministry of Industry and Trade acknowledged that, in the context of the Covid-19 pandemic, there had been negative impacts on the world economy as well as Vietnam and the Americas – orders decreased, supply chains were broken, unemployment increased – are the big difficulties that the business community is facing.
However, the difficulty is also the new development opportunity for businesses that are adaptable, informed and have appropriate development strategies, especially in the context that Vietnam is assessed to be and will be an attractive destination while American investors in the trend ofglobal supply chain shifts.
From the perspective of state management agencies, the Government and the Ministry of Industry and Trade together with the Vietnam Trade Office system in the Americas will make efforts to support the Vietnamese business community in market information; acting as a bridge with foreign partners, assisting in solving difficulties arising in the process of market penetration and business.
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