Henig » January 13th, 2023
Trade with UK: Record growth, untapped potential
06:00 | 13/01/2023
(VEN) – The UK-Vietnam Free Trade Agreement (UKVFTA) officially came into force on May 1, 2021. The two countries have seen bilateral trade growth despite the COVID-19 pandemic, and the UK is forecast to remain a promising export market for Vietnamese goods.
Increased presence in UK
Trade between Vietnam and the UK reached more than US$6.6 billion in 2021, up 17 percent compared with 2020. The sum included nearly US$5.8 billion worth of Vietnamese exports to the UK, up 16.4 percent, and US$849 million worth of UK exports to Vietnam, up 23.6 percent. In the first 11 months of 2022, Vietnam’s exports to the UK reached nearly US$5.63 billion, up 7.4 percent year-on-year. Meanwhile, imports from the UK reached US$700 million, down 10 percent.
Eleven-month bilateral trade reached US$6.33 billion, up 5.2 percent year-on-year, yielding a trade surplus of nearly US$4.93 billion for Vietnam.
Vietnamese Trade Counselor in the UK Nguyen Canh Cuong said British people had never been interested in Vietnamese brands and products as much as today. “In the past, British people and businesses rarely heard about Vietnam or Vietnamese products. Nowadays, when I attend events as Vietnamese Counselor in the UK, I receive many questions from British companies about business opportunities in Vietnam. They want to import Vietnamese goods for distribution in the UK market,” Cuong said.
Significant growth has been recorded for the majority of Vietnam’s key exports to the UK such as coffee, pepper, rubber, vegetables, textiles and footwear, in some cases even doubling in value. The increase in fabric import turnover from the UK shows that some Vietnamese enterprises have used imported fabric to produce items meeting rules of origin.
The UK is a discerning market with strict regulations and high standards. The Ministry of Industry and Trade has guided the Vietnamese Trade Office in the UK to provide domestic companies with consultancy on technical requirements for export to this market. The Europe-American Market Department, the Multilateral Trade Policy Department, and the Vietnam Trade Promotion Agency have disseminated the UKVFTA among businesses and advised them on taking advantage of the trade deal.
The Vietnamese Trade Office in the UK has also provided consultancy on UKCA (UK Conformity Assessed) marking requirements for industrial exports to the UK, as well as other regulations applied to farm produce, wood product and garment exports to this market. In 2022, with support of the office, Vietnamese companies participated in the White Label World Expo in London in March, the Birmingham Furniture Show in April and in VegfestUK in November. The office also organized Vietnamese Goods Festival events in London in June and in Nottingham in July.
However, Vietnamese exports still account for less than one percent of the more than US$600 billion worth of the UK’s annual imports. Nguyen Canh Cuong said that during the past two years, COVID-19 prevented direct business meetings. Moreover, the UK has put in place new regulations on technical standards and post-Brexit customs procedures, generating concerns on the part of Vietnamese exporters.
Vietnamese exporters have also been discouraged by the surging maritime transport costs to the UK. Major fluctuations in the exchange rate of the pound sterling (GBP) in the third and fourth quarters of 2022 also hindered Vietnamese exports to the UK.
Despite these challenges, Cuong believes the UKVFTA will create new competitive advantages for Vietnamese exports, especially essential consumer goods such as farm produce, seafood, processed food, footwear, clothing, and furniture.
Cuong said that to access the UK market, domestic companies should participate in major international trade fairs and exhibitions to introduce sample products and talk directly to potential partners.
Cuong believes the Vietnam Trade Promotion Agency, the Ministry of Industry and Trade and localities should financially support business participation in the UK fairs. In his opinion, localities also need to increase investment in human resource training according to European standards to help domestic companies win the trust of UK importers and consumers.
Nguyen Canh Cuong, Vietnamese Trade Counselor in the UK:
In 2023, the Vietnamese Trade Office in the UK will prioritize support for domestic companies to participate in international fairs in order to facilitate their access to this potential market.
Hoa Quynh LINK
Hà Nội focuses on industrial, commercial development in 2023
January, 13/2023 – 08:52
The Hà Nội Department of Industry and Trade will focus on reviewing and completing industrial, trade and logistics development plans to integrate into the Hà Nội Capital master plan.
HÀ NỘI — The Hà Nội Department of Industry and Trade will focus on reviewing and completing industrial, trade and logistics development plans to integrate into the Hà Nội Capital master plan.
Nguyễn Mạnh Quyền, vice chairman of Hà Nội People’s Committee, made the statement at a conference on implementing tasks of Hà Nội’s industry and trade sector in 2023 held this week.
Accordingly, the department needs to have specific solutions to develop the industrial sector, including key industries and supporting industries.
At the same time, the department needs to solve difficulties and obstacles, and support enterprises in restoring production and business and attracting investment to have large industrial projects playing an important role in increasing production capacity.
In addition, the department needs to speed up investment in the infrastructure of industrial clusters, effectively implement the industrial promotion programmes, and strengthen measures on ensuring electricity supply for production, business and people’s daily life.
The department also should have a specific roadmap to start the construction of 34 new industrial clusters and improve the operational efficiency of 70 existing industrial clusters.
Quyền also said the department must promote international economic integration, and take advantage of Free Trade Agreements (FTAs). It will also renovate trade promotion activities, and implement market expansion solutions for high value-added products or product groups with a high export turnover.
In 2023, it will continue to support enterprises to bring goods to foreign distribution channels, and promote the development of the domestic market in association with the “Vietnamese people give priority to using Vietnamese goods” campaign.
This department will carry out market stabilisation measures, and propose solutions to increase retail sales of consumer goods and services in the city.
It will strengthen management for the quality and price of essential commodities to control inflation, especially before and during the Lunar New Year.
It also promote the development and management of e-commerce activities.
In 2022, the Hà Nội Department of Industry and Trade implemented tasks and solutions to restore and promote industrial and commercial development in the city, including the organisation of 45 domestic consumption stimulus events, and the development of more than 20 points of selling products under the One Commune One Product (OCOP) products.
Therefore, they promoted positive recovery of industrial production, domestic commercial activities, import and export in 2022, contributing to the city’s GRDP growth of 8.89 per cent.
Notably, the industrial production value increased by about 8 per cent, higher than this year’s target of 7.3-7.8 per cent and the figure of 5.37 per cent in 2021.
The municipal total retail sales of consumer goods and services in 2022 was estimated at VNĐ697.7 trillion, up 25.2 per cent compared to 2021 and higher than the target of 9-10 per cent.
Two economic growth scenarios for 2023
January, 13/2023 – 08:00
The CIEM’s report “Việt Nam’s economy in 2022 and prospects for 2023” offers two scenarios for Vietnamese economic growth this year.
HÀ NỘI — The Central Institute for Economic Management (CIEM) and the Ministry of Planning and Investment, in collaboration with the the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) held a seminar on Việt Nam’s economy in 2022 and prospects for 2023.
CIEM’s report “Việt Nam’s economy in 2022 and prospects for 2023” offers two scenarios for Vietnamese economic growth this year.
Accordingly, in the first, GDP of Việt Nam increases by 6.47 per cent with average inflation at 4.08 per cent, export growth hits 7.21 per cent and the trade balance reaches $5.64 billion.
The second is more positive when labour productivity grows, GDP growth reaches 6.83 per cent; inflation 3.69 per cent; export growth 8.43 per cent and trade balance $8.15 billion.
Speaking at the conference, Trần Thị Hồng Minh, Director of CIEM, said last year was considered to be an extremely difficult and challenging year for the Vietnamese economy and the global economy in general.
In addition to the increase in the prices of commodities such as energy and food, leading to an increase in inflation in many countries, the pandemic developments, the Russia-Ukraine conflict, along with embargo measures of the many economies heavily affected the recovery of the supply chain.
The difficult context requires Việt Nam to constantly monitor and update assessments and recommendations in order to maintain macroeconomic stability, control inflation, and create a favourable environment for socio-economic reform, recovery and development.
With those efforts, Việt Nam’s economic picture achieved positive results last year, GDP growth reached 8.02 per cent, the highest in the period from 2011 to 2022, far exceeding the target of 6.5 per cent proposed by the National Assembly.
Inflation control reached 3.15 per cent, reaching the target below 4 per cent, and the macro economy was maintained, said Minh.
Nguyễn Anh Dương, Head of the General Research Department, CIEM, said that Việt Nam’s economic growth reached impressive results last year. Besides GDP growth of 8.02 per cent, foreign investment attraction and import-export activities were also evaluated positively.
However, the growth rate was showing signs of slowing down from the fourth quarter of last year, he said.
The problem of lack of orders, leading to underemployment, occurred at many enterprises.
This impact might not only stop at the fourth quarter but could also last until the first months of 2023, he said.
The assessment of the CIEM research team in the report also shows that, compared to previous years, Việt Nam’s economic outlook this year might be influenced by more factors than last year.
In particular, these include the ability to control the spread of virus variants and new diseases, thereby facilitating economic activity; and the degree of monetary tightening in key economies to handle inflationary pressures.
Key economies will increase geopolitical competition, the Russia-Ukraine conflict may linger, but “like-minded” economic groups may increase cooperation in many areas.
Along with that, these factors also include the progress of implementing the programme of socio-economic recovery and development.
If macroeconomic stability is maintained, Việt Nam can continue to reform and promote fiscal and monetary measures to help restore economic growth.
Finally, economic growth will depend significantly on the ability to diversify export markets, take advantage of opportunities from free trade agreements (FTAs) and handle risks associated with trade–technology confrontation among superpowers, the downtrend of regional currencies against the US dollars.
The report by CIEM also re-emphasises the message that policy priorities need to continue to focus on improving the microeconomic foundation and reforming the economic institutional system in a direction that is more friendly to innovation and the environment, associated with effectively handling risks in the volatile international economic environment.
— VNS LINK
Việt Nam’s coffee exports exceed the plan
January, 13/2023 – 08:43
Coffee exports have also increased by an impressive 13.8 per cent in volume and 32 per cent in turnover compared to the whole year of 2021.
HÀ NỘI — Việt Nam exported 1.77 million tonnes of coffee of all kinds with a total turnover of over US$4 billion last year, exceeding the set target.
Coffee exports have also increased by an impressive 13.8 per cent in volume and 32 per cent in turnover compared to the whole of 2021.
The General Department of Việt Nam Customs reported that the country exported more than 197,000 tonnes of coffee, worth $425.1 million in December, increasing strongly by 53.5 per cent in volume and 39.7 per cent in value compared to November 2022.
This is the highest export volume of the coffee industry in the past four years and the highest-ever turnover value.
Over the past year, coffee exports have grown strongly thanks to a rebound in demand after the COVID-19 pandemic and high coffee prices in the context of tight global supply due to crop failures and supply chain bottlenecks in large producing countries such as Brazil and Colombia.
On the other hand, the increase in exports was also supported by an improved supply of containers and ships.
Regarding export markets, the amount of coffee exported to some main markets tends to increase last year compared to 2021, such as Russia up by 26.5 per cent, the UK by nearly 40 per cent, and especially India by 123.5 per cent.
However, a decline was recorded in markets such as the US, Japan, and China.
Meanwhile, the European Union (EU) continues to be Việt Nam’s largest coffee consumption market with a market share of about 39 per cent of export volume.
Việt Nam’s coffee exports to this market reached 689,049 tonnes last year, worth nearly $1.5 billion, up 25.8 per cent in volume and 45.4 per cent in value year-on-year.
Besides, the tariff advantage from the EVFTA also brings great motivation for coffee exporters to this market.
However, the biggest challenge for businesses exporting to the EU is the increasing requirements for quality and sustainability for products.
Most recently, the European Commission (EC) said that the EU had reached an agreement to ban the import of a number of products considered a key factor in promoting deforestation, including coffee, on December 6.
Along with the EU market, China’s opening of its border and isolation lifting after lowering the level of COVID-19 control from January 8 is also an opportunity for Việt Nam’s coffee exports to regain momentum growth in this market in the near future.
Exports at the beginning of the 2022-2023 crop year are still quite favourable, but some forecasts suggest that coffee exports may decrease this year because the supply is not as abundant as the previous year, while the price of coffee tends to decline due to the coffee supply–demand shifts from shortage to surplus.
Last year’s coffee export price recorded the highest level in many years with an average of $2,282 per tonne, a year-on-year growth of 16 per cent.
— VNS LINK
Source: Dinar Recaps
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