If the trade tension between the US and China continues, it will partially present opportunities for Vietnamese exporters but require their greater efforts to take full advantage of the opportune occasion.
The remarks were made by Adam Sitkoff, Executive Director of the American Chamber of Commerce in Hanoi (Amcham Vietnam) amid concerns about the negative effects on Vietnam resulting from US-China trade war and the escalation of trade protectionist policies of US President Donald Trump.
Analyzing the counterblows between the US and China, Tran Dinh Thien, former director of the Vietnam Institute of Economics, said if a US-China trade war breaks out, it will have a negative impact on the global economy. When a tax of 10% or even up to 25% is levied on imports from China, this will offer a wealth of opportunities for other nations to boost exports to the US in place of the goods from China.
Difficulties from trade protectionism
Mr Thien emphasized that Vietnam will encounter with the fact that Chinese goods will seek ways to export to other nations including Vietnam if it encounters difficulties in penetrating the US market.
The US and China remain the most important trading partners of Vietnam as the country enjoys a trade surplus with the US but bears a trade deficit with China. In face of the tense US-China relations, China’s restructured imports and exports may increase its exports to Vietnam and reduce its imports of Vietnamese products in future.
According to the European-American Market Department under the Ministry of Industry and Trade, Vietnam’s key export items to the US, such as seafood products, are running into difficulties due to the tariff barriers erected by the US to protect their domestic production industry.
Several issues like anti-dumping duties, anti-subsidies or regulations on inspections for chemicals and antibiotics residues and the pangasius inspection program of the US will greatly affect Vietnamese exports in the time to come.
Worries about US policies aimed at protecting their domestic goods and requiring US agencies to strictly monitor the import of commodities from other nations carrying a trade deficit with the US, including Vietnam, have led to many businesses pulling back from seeking ways to enter the US market.
Notably, the US has sped up the progress of applying the catfish inspection program to 30 days and began to scrutinize 100% of the batches of imported catfish under the Farm Bill in early August 2017. This move has adversely affected Vietnamese businesses.
The US is also one of the major consumers of Vietnamese farm produce. However, Vietnam’s exports of farm produce are mostly raw materials without established brands, which have not brought in a high export value. According to statistics, up to 90% of Vietnamese farm produce has plagiarized foreign brands for export to foreign markets.
Thorough grasp of regulations and laws
Regarding the aforementioned worries, Mr Adam Sitkoff said although the US administration has adopted a number of new trade policies, no remarkable changes are seen in major trade results with Vietnam.
In recent times, some Vietnamese products have faced unfair treatment when being exported to the US market. For example, anti-dumping lawsuits have been filed against frozen shrimp exports from Vietnam. This treatment is attributed to the fact that Vietnamese enterprises have not equipped themselves with a full understanding of US regulations. Moreover, businesses have not registered for the quality inspection program in the US, which has led to a series of problems in the export process, Mr Sitkoff said.
India’s shrimp exports have been sold at higher prices than Vietnam’s as its businesses have registered for the quality inspection program in the US. Mr Sitkoff pointed out that all nations have set up their own trade barriers and trade is not always fair and not because of how many trade barriers are built, Vietnamese businesses should not give up on the US market but rather focus on creating fairness in order to protect themselves
The Amcham representative affirmed that Vietnamese exporters need to identify their key products able to participate in the global supply chain.
They need to adapt to enhance their competitive edge and conduct regular reviews to stay abreast of new regulations and laws of the US. For example, at present, the US has implemented an inspection program on aquatic products and if Vietnamese firms make themselves aware of the requirements and regulations of this program, they can easily overcome the barrier.
Mr Sitkoff also emphasized the need for businesses to grow a stronger presence on the Internet through establishing their own websites to provide buyers with sufficient information and purchasing options for products they can search out from any corner of the globe.
According to the Ministry of Industry and Trade, several Vietnamese seafood companies have shifted their exports to other markets such as Japan and China for fear of the implications of the US trade barriers and the likelihood of further protectionist measures.
The shift might bring a source of profit for them in the short-term but also a huge disadvantage in the long-term, if they do not begin to establish themselves in the US market now, it could well be more difficult to return to the highly lucrative market in future.
VOV
