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The policy flexibility is needed to ease concerns from businesses when escalating trade frictions between the United States and China and some other countries have been casting a shadow over global trade and investment.
General Statistics Office’s data showed Vietnam recorded the first trade deficit this year in May with value of US$1.3 billion, resulting in a total deficit of $548 million for the first five months.
The return to a trade deficit was blamed on slowing growth of exports which totalled more than $100 billion in January-May, up 6.7 per cent year-on-year but much lower than the 19 per cent and 17.5 per cent growth seen in the same periods of 2017 and 2018, respectively.
However, this was still encouraging given that many countries suffered declines in their exports, such as Japan, Singapore and Indonesia.
In Vietnam, the US-China trade tension has had mixed impacts on the country’s trade activity. While Vietnam enjoyed export growth of 28 per cent to the US market in the first five months, its shipments to China declined and trade deficit with China rose 46 per cent to $16 billion in the reviewed period.
Experts have predicted that Vietnamese exports would continue to be affected by the weakening of global trade, especially the probable escalation of trade tensions between the United States and China.
According to Duong Minh Dung, director of Dong Nai’s Department of Industry and Trade, the US-China trade friction has caused countries in the region to build tariff barriers to protect their domestic goods and reduce imports, thus affecting Vietnam’s exports.
The provincial Association of Exporters said orders from now to the end of the year of large enterprises operating in the leather and shoe industry in Dong Nai decreased 10-15 per cent while those in the garment industry dropped 7 per cent.
According to MoIT’s Planning Department, although exports often accelerate in the second half of the year, it is not easy to achieve the export growth target of 7-8 per cent for year-end set by the National Assembly and 8-10 per cent that the Government assigned the ministry, especially when global trade is slowing down.
The ministry will continue to closely monitor the US-China trade tension to come up with specific plans and policies to proactively support exports of businesses.
The trade management authority encourages enterprises to increase exports of which we have advantages. In the meantime, it will strictly manage the import and export of goods from border gates to limit trade fraud through origin of goods.
It will also enhance support enterprises in expanding new export markets and growing the market share of Vietnamese goods in traditional markets and free trade agreement partners, especially for the products in the national brand programme and high-added value agricultural products such as tea, coffee, organic rice and white pepper.
On the other hand, the ministry will innovate and strengthen trade promotions activities for key export products, focusing on medium- and long-term programmes.
In addition, it will strengthen the information exchange mechanism at all levels, especially with trade representative offices in other countries, to capture market information and promptly tackle the issues affecting Vietnam's exports.
