Three solutions for Vietnam firms to boost integration in global supply chains
In the 2011 – 2019 period, Vietnam’s exports grew at an average of 15% annually, and are on track to contribute to an all-time high turnover of US$500 billion in mid-December.
Ten years after joining the World Trade Organization (WTO), Vietnam now ranks 22nd globally in terms of exports, however, more solutions are needed for Vietnamese enterprises to further integrate into the global supply chains, particularly given the growing uncertain global trade environment, according to the Ministry of Industry and Trade (MoIT).
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In the 2011 – 2019 period, Vietnam’s exports grew at an average of 15% annually, and are on track to contribute to an all-time high foreign trade of US$500 billion in the mid of December.
According to the MoIT, Vietnam could record a trade surplus in the fourth year in a row at US$9.9 billion in 2019, which is a significant achievement as global trade is slowing down due to ongoing trade disputes and competitions among major world economies.
The MoIT, nevertheless, proposed three solutions to help Vietnamese enterprises better utilize new free trade agreements, including the Comprehensive and Progressive Trans – Pacific Partnership (CPTPP) and the EU – Vietnam Free Trade Agreement (EVFTA), as well as further integrate in the global supply chains.
Firstly, it is essential to set up the implementation plans for FTAs, particularly the CPTPP and the EVFTA, for local enterprises to access new markets, while providing detailed information regarding Vietnam’s commitments, rules of origin, non-trade barriers, among others.
Meanwhile, government agencies should speed up the revision of existing laws to ensure full compatibility with new FTAs, while continuing to simplify and modernize the process of issuing certificate of origins.
Secondly, Vietnam’s government bodies must properly address issues related to trade protection, including regulations and standards in environment, climate change, labor safety, among others, from other countries. At the same time, customs agencies are responsible for stepping up efforts to deal with trade fraud activities, aiming to protect lawful rights of Vietnamese enterprises.
As of present, Vietnamese export products are subject to over 150 trade probes from 19 countries and territories, including anti-dumping and anti-subsidy ones.These are becoming a main barrier for Vietnamese exports.
The MoIT stressed it has been working with ministries and agencies to take the cases to the WTO for settling trade disputes, if countries are found to violate WTO rules.
In the coming time, the MoIT would enhance efficiency of Vietnam’s warning system, aiming to help businesses predict which products could be exposed to trade protection measures.
Vietnam is fully committed to working with countries in dealing with cases of illegal transshipment forging Vietnamese origin to evade import tariffs, said the MoIT.
Thirdly, a total transformation for trade promotion activities is required, with a focus on measures with long-term impacts, such as training skills and studying markets, instead of holding exhibitions or trade fairs.
Vietnam is set to promote products with national brands and export products to major markets with huge potential.
The MoIT would continue to proceed with the proposal of supporting Vietnamese enterprises to directly participate in global distribution networks until 2020.
More importantly, Vietnamese enterprises must thoroughly prepare for regional and international competitions and plans for long-term brand building and quality of products and services improving that could meet strict demands from import markets.
