Exploiting FTA markets – good way to boost export revenue
Optimizing advantages in the markets signing free trade agreements (FTA) with Vietnam is expected to contribute to boosting Vietnam’s export revenue. In the first five months of this year, agro-forestry-fishery exports hit US$15.6 billion, a rise of 9.9% over the same period last year. Four leading markets of the products were the US, Japan, China and the Republic of Korea.
But many experts worried that the dependence on some major markets will pose high risks to not only agro-forestry-fishery products but others produced by Vietnam when fluctuation happens in these markets.
In the January-May period, Vietnam earned US$1.45 billion from rice export, up 13.9% in volume and 40% in value over the same time in 2017. The top market of Vietnamese rice was China.
According to Nguyen Ngoc Nam, President of the Vietnam Food Association, opportunities for Vietnam’s rice export are increasing as the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) has been signed, creating favorable conditions for the country to sell rice in CPTPP member countries.
According to the Ministry of Industry and Trade, a rise was recorded in export revenue to markets having FTAs with Vietnam in 2017 and it was maintained in the first half of this year.
In the first five months of 2018, exports to the US reached US$17.4 billion, a rise of 9% year on year.
Although the FTA between Vietnam and the EU has yet to take effective, exports to the market still reached US$16.9 billion, an increase of 13.6%.
In 2017, Vietnam’s exports to the ASEAN countries also rose 34.3% to US$21.7 billion, while export revenue in the Chinese market was up 60.6% to US$53.3 billion. Strong growth was also seen in the Japanese market with 14.2%, the Republic of Korea with 31.1%, Australia, 14.3%, Chile, 26.3%, and Russia, 35.7%.
The Vietnam Food Association predicted that rice export volume may fetch 6 million tons in 2018 with value of about US$3 billion due to an increase in exports of high-quality rice.
After earning US$8.3 billion from exporting aquatic products in 2017, Vietnam expects 3-5% growth in revenue in 2018 thanks to positive signals stemming from the Chinese, Japanese and RoK markets.
Minister of Industry and Trade Tran Tuan Anh said that over the past years, export activities have been on right track with the expansion of many big markets, the reduction in export of unprocessed products and increase in export of processed ones.
As many as 28 sectors enjoyed export revenues of over US$1 billion, while revenue of over US$5 billion was recorded in seven markets and US$10 billion in four markets.
However, the diversification of markets for some agricultural and aquatic products is still limited, while the dependence on Asian markets remains strong. Particularly, some products like cassava, rubber and dragon fruits have still been sold in only one market.
Minister Anh stressed that in the coming time, it is necessary to reduce the dependence on major markets and remove obstacles for enterprises in terms of tariff technical barrier, food safety requirements, and origin, while strengthening production-market connection, and setting up the value chains.