Overcoming technical barriers to accelerate exports to the US

Vietnam's furniture exports to the US have grown strongly in recent years. Photo: Nguyen Hien

To boost exports to the US, businesses need to make efforts to overcome technical barriers, especially to ensure food safety and hygiene, and at the same time be flexible in trade promotion and make good use of e-commerce channels.

Agricultural products and furniture have many opportunities

According to Bui Huy Son, Counselor of the Mission, Head of the Vietnam Trade Office in the US, the US economy is in a strong recovery phase, the domestic economic growth (GDP) in the third quarter of 2021 reached 4.9%. This is a large import market with high purchasing power and an increasing trend in both price and size. The policy environment and relations between Vietnam and the United States are favorable, along with the rich demand and consumption habits according to income, cultural characteristics of the region, creating a large space for Vietnamese enterprises to exploit. In addition, the large number of Vietnamese people is a bridge and an important customer group for Vietnamese goods.

Data from the General Department of Customs shows that, by the end of October 2021, the total bilateral trade turnover between Vietnam and the United States reached US$89.6 billion. In which, Vietnam exported US$76.7 billion to the US (up by 22.9% compared to the same period in 2020; accounting for 28.4% of total export turnover); imports from the US is US$12.9 billion (up by 13.2% compared to the same period in 2020, accounting for 4.8% of total import turnover).

Bui Huy Son added that the US is importing a lot of agricultural products, food and furniture from Vietnam. For agricultural products and foodstuffs, in the first 10 months of 2021, only Vietnam's rice and coffee exports to the US saw a decrease in turnover, while the rest of the items increased.

"In the long term, the demand for agricultural products and foodstuffs in the US will continue to increase, the structure will not change but the quantity will increase significantly from 2021-2025," Son said.

Notably, Vietnam's wooden furniture group has gained a foothold in the US market. The prospect of exporting this item to the US in the last month of the year is very positive due to the shopping demand for the holiday season. Besides, in the context of people getting used to working from home, the increased demand for furniture also leads to an increase in demand for this item.

Providing an in-depth analysis of the food market in the western region of the US, Tran Minh Thang, head of the Vietnam Trade Office in San Francisco, informed that this area has many large supermarkets such as Safeway, King Soopers, Albertsons and Sprouts Famers Market. The Vietnamese-American market here is also relatively large with 2.18 million people, purchasing power reaching US$57 billion, consumption habits are very close to Vietnamese people. This is an effective channel to help Vietnamese goods penetrate deeply into the western US market.

Meeting food safety requirements

Despite high demand and great consumption, Bui Huy Son also pointed out that the US is one of the most "fastidious" markets in the world, with very high requirements for food safety and hygiene, technical barriers on labor and environment. The US food safety regulation system is built at both state and federal levels, so it requires meticulous and thorough research to understand, implement and meet the standards. In addition, Vietnamese goods must compete with other groups of goods manufactured in the United States or from other competitors from Asia, South America, and even Africa.

For wood products alone, according to Bui Huy Son, the geographical distance is far, the transportation cost is high due to the complicated development of the Covid-19 pandemic along with the US government's focus on environmentally friendly requirements. The environment, especially the problem of logging and wood origin are also challenges.

The leader of a business that has been exporting fruit to the US market for many years said that exporting goods to the US must take into account 5-10 years, it is very difficult to be able to stand firm in this market over a short time. Moreover, the product quality must be checked regularly and continuously to ensure that the product does not exceed the allowable threshold for pesticide residues. The manufacturer's product preservation technology also needs to be researched and upgraded so that goods can be transported by sea instead of by air as at present in order to reduce costs and improve competitiveness of the product.

Emphasizing the homogeneity of fruit products exported to many "fastidious" markets, including the United States, a representative of Dai Thuan Thien Clean Agricultural Products Co., Ltd (Can Tho), said that, at present, people as well as cooperatives are having difficulty in producing a unified process, the members are not yet linked with each other.

Meanwhile, enterprises desperately need large-scale production areas with a unified process.

“For example, China’s green-skinned pomelos are of good quality, exporting 10 million tons/year to Europe. If the people and cooperatives properly synchronize the production process, we are completely confident that we can compete with those quality fruit products in “fastidious” markets like the United States, Europe and Japan," the representative of Dai Thuan Thien Company said.

Besides product quality, some economic experts said that in order for Vietnamese goods to successfully penetrate the US market, it is necessary to promote trade promotion and establish a distribution system; actively associated with associations and enterprises of Vietnamese origin in the US. Besides, the trend of online shopping has become very popular. Vietnamese businesses can take advantage of large e-commerce channels like Amazon to promote and introduce products to consumers.