Export is gradually recovering, maintaining trade surplus

A lot of Luc Ngan lychee (Bac Giang) is transported to Dong Dang international station (Lang Son) for export to China. Photo: Tuan Duong

Import and export turnover increased by 5.3%

The Ministry of Industry and Trade report showed that import-export turnover recovered positively in May, increasing quite compared to the previous month (up 5.3%, estimated at US$55.86 billion). The export of goods recovered positively, with an estimated turnover of US$29.05 billion, up 4.3% compared to the previous month. The domestic economic sector reached US$7.79 billion, up 1%; the foreign-invested sector (including crude oil) reached US$21.26 billion, up 5.5%. Compared to the same period last year, although the export turnover of goods decreased by 5.9% in May,the decrease was slower than the previous month.

Notably, in the first 5 months of 2023, there were 23 items with export turnover of over US$1 billion (higher than 3 items in the first 4 months of the year), accounting for 87.4% of total export turnover. (7 items exportedover US$5 billion, accounting for 65.4%).

In May, the agricultural, forestry and fishery products continued to be the bright spot of export activities, with a turnover of US$2.9 billion, up 9.5% over the previous month and 8.5% over the same period. The important highlight of this commodity group was the export of vegetables and fruits, with an increase of nearly 2 times compared to the previous month, estimated at US$500 million; rice increased by 53.1%, reaching US$530 million; coffee increased by 28.5%, reaching US$418 million… However, seafood export turnover decreased by 23.9% compared to the previous month, estimated at US$800 million.

On the contrary, pressure is still on processed industrial goods and mineral fuels. In May, the group of processed industrial products continued to decline, estimated at US$115.9 billion, down 6.6% over the same period. According to the Ministry of Industry and Trade, this group of goods was still affected by the global economic slowdown, the decline in aggregate demand, and the sharp decrease in the demand of major export markets.The export turnover of most products in this group decreased compared to the same period last year, in which the main products were still in a downward trend,such as phones of all kinds and components, decreased by 5.2% over the same period last year(reaching US$ 3.9 billion);electronic products and components decreased by 11.4% (reaching US$ 4.3 billion);footwear decreased by 5.4% (reaching US$2 billion); textile and garment decreased by 16.6% (reaching US$ 2.6 billion);wood and wood products decreased by 21.1%.The mineral fuel group continued to decline sharply, estimated at US$ 382 million,down 18.3% over the same period last year. Petrol and oil of all kinds and coal decreased by 51.2% and 18%, respectively, while crude oil increased by 14.2%, and ores and other minerals increased by 6.8%.

Although it was prosperous in May, in general, in the first 5 months of 2023, the total export and import turnover of goods was estimated at US$ 262.54 billion,down 14.7% over the same period last year, of which exports decreased by 11.6%;imports decreased by 17.9%. The trade balance of goods in the first 5 months of 2023 was estimated to have a trade surplus of US$9.8 billion.

"Due to the decrease in global demand, in general, all commodity sectors face difficulties in export markets, especially for non-essential consumer goods, so the export turnover in the first 5 months of 2023 into most of the main markets have decreased, but the impact on the export of each product industry is different", said the Ministry of Industry and Trade.

Industries such as textiles and garments, leather and footwear, wood, and seafood, with the main export markets being the US, EU… have the biggest decline; while sectors such as rubber, rice, vegetables, and cashew nuts... with the main export market being Asia are less affected. At the same time, several export industries such as seafood, wood and wood products, iron and steel, and plastic products are under pressure on trade remedy investigations. The increased cost of input materials affected exported goods' competitiveness andcreateddifficulties in export markets.

There is potential fortrade agreements

Dr Le Huy Khoi, Head of the Science and Training Management Department, Institute of Strategy and Policy Research (Ministry of Industry and Trade), said that during the difficult time,the export market, depending on the industry, the domestic market was still the fulcrum to exploit for enterprises. Besides, to overcome this period, enterprises need to access traditional markets.At the same time, it was necessary to continue to make good use of the FTAssigned,promote trade to boost exports and expand potential new markets such as Northern Europe, Eastern Europe, West Asia, South Asia,Africa and Latin America.

Besides, according to experts, enterprises should pay attention to and exploitFTAs more effectively. Tran Thu Quynh, the representative of the Vietnam Trade Office in Canada, said that studying local data from 2018-2022 showed that, since the CPTPP took effect, Vietnam's exports in most fields of commodities, agricultural products and processed foodsincreased (except fruit and nut products).In the field of consumer goods, many products of the domestic industrial sector had a remarkable increase, demonstrating the positive impact of the CPTPP on Vietnam's exports to this country.

However, a recent research report evaluating the use of preferential tariffs in Vietnam's CPTPP showed that the potentialofthis agreement had not been fully exploited. According to local data, in 2022, about 81% of Vietnamese goods exported to Canada still used MFN tariff preferences; less than 1% used GPT preferences;only 18% used CPTPP tariff preferences.

"The reason is that either business are not interested in using the CPTPP tariff preferences or the products are not eligible for regional origin/content. In addition, in many cases of commodity fields, enterprises still do not know how to take advantage and exploit the principle of cumulative origin in production in the strategy of purchasing input materials to ensure the CPTPP content in origin. To enjoy preferential tariffs. It is the most unfortunate limit ation, hindering Vietnam's export potential in the area", the report of the Trade Office said.