How to develop sustainable exports and diversify markets?

Businesses need to exploit opportunities from FTAs to expand consumption markets. Photo: H.D

Avoid depending on a few large export markets

The report and recommendations of the National Economics University on restoring aggregate demand and promoting economic growth in the new context say that a decrease in aggregate demand shows that the economy is at risk of recession, which affects the economy's overall growth rate. Therefore, restoring aggregate demand is an important task for the economy in the last months of 2023.

Regarding the export sector specifically, the report recommends sustainable export development coupled with market diversification towards a healthy and reasonable trade balance with partners.

Analyzing this issue, according to experts, Vietnam is mainly dependent on a few large export markets. Therefore, Vietnam's export activities face major shocks and disruptions when these countries fall into a crisis.

Therefore, the National Economics University believes expanding trade with markets in the signed Free Trade Agreements (FTAs) is necessary. Instead of focusing deeply on a few large markets, businesses need to exploit opportunities from FTAs to expand consumption markets to other member countries.

On the other hand, Vietnamese manufacturers are facing many challenges when their products do not meet the requirements of converting green and clean energy from the import market. Therefore, experts have emphasized the need to review and promulgate legal framework standards on green production for Vietnamese businesses.

Minimize risks due to trade defense investigations

Although FTAs aim to remove trade barriers, they still allow member countries to use several trade policy tools to protect domestic industries from imported goods.

Therefore, the National Economics University believes that trade defence will be a tool for countries to protect domestic goods and shape the market, leading to the growing risk of trade defence lawsuits against Vietnam's export goods.

According to a report by the Trade Remedies Department - Ministry of Industry and Trade, by the end of June 2023, Vietnamese exports faced 231 trade defence cases initiated by countries. Among them, the leading cases are anti-dumping investigations (128 cases), trade defence cases, anti-evasion of trade remedies and anti-subsidy.

To prevent and reduce risks caused by trade remedy investigations, the report of the National Economics University said that it is necessary to promote forecasting and early warning for businesses of products that may be at risk of being investigated.

In addition to monitoring based on items that have a sudden increase in export volume or account for a high proportion of the export structure to markets, the investigation needs to actively monitor the trade flow of each item in the world and build a more accurate forecasting model.

In particular, it is necessary to implement solutions to prove that Vietnamese goods are not dumped. Businesses need to use raw materials from countries in the FTAs that Vietnam has signed. This is one of the necessary conditions to prove that raw materials are imported from preferential markets, along with relatively low labour costs, constituting a suitable export price without government subsidies.

Therefore, the Ministry of Industry and Trade needs to promote further exchange and sharing with businesses to help them understand the principles of investigation and see the importance of businesses. In addition, state agencies must be more important in supporting businesses to complete proofs and establish a specific and public implementation process for businesses to understand better.

The report also recommends balancing the trade balance with partners, such as implementing more programs to help businesses of major partners access domestic enterprises. It is also necessary to have more preferential import tax rates, especially to reduce taxes on machinery and equipment from markets where Vietnam has a trade surplus.