The American market has been recovering rapidly after the pandemic and opening many opportunities to promote the exports of Vietnam. However, we are facing four significant challenges.
The Ministry of Industry and Trade (MOIT) has just made an comprehensive assessment of economic, trade, and investment relations between Vietnam and the Americas.
Accordingly, in only the past ten years, the value of two-way trade has increased nearly five times, from $28 billion in 2011 to $139 billion in 2021.
In 2022, bilateral trade continues to achieve positive results. The total value of two-way imports and export in the first four months of the year increased by 17.8% over the same period last year, reaching more than US$50 billion.
Regarding trade turnover with Vietnam, the Americas are continuously the continent with the highest trade growth in recent years. In the Americas region, the US is the most important partner of Vietnam. Trade activities with the US account for more than 80% of the value of imports and exports between Vietnam and the Americas.
The American market will continue to recover strongly. People and businesses gradually adapt to the new everyday life; there will no longer be the risk of blockades, closures, or prolonged travel restrictions disrupting production and goods circulation.
New production and supply chains will quickly be shaped or adjusted. The government will continue to promote the economic bailouts. People's income and purchasing power will be significantly improved and rebound after a long period of suppression.
"These are opportunities for Vietnamese enterprises to bring quality products into the large American market," the MOIT representative said.
According to the MOIT, although there have been positive developments in trade relations between Vietnam and the Americas, there are still some challenges to promoting two-way trade.
First, Vietnam's export products with value-added and high quality to the American market are still low.
There are still many market items in great demand. Still, Vietnamese enterprises have not fully exploited and broken into the market with consumer goods, household appliances, food, construction materials, iron and steel, and seafood products.
Second, Vietnamese enterprises still face difficulties accessing distribution systems in host countries because of quality standards. Vietnamese enterprises are also facing more significant challenges in anti-dumping lawsuits related to commercial fraud regarding the origin of goods.
Next, the remote geographical distance dramatically affects the cost and time of transportation. Latin America has the most considerable space and transit time, with an average time of two months of trasportation.
This directly limits agricultural products' export to Vietnam, reducing price competitiveness for local products.
Fourth, the global economic situation is volatile; inflation in other countries will affect consumer purchasing power. Production, energy, and logistics costs will also reduce the competitiveness of exports of Vietnam.
The MOIT representative noted that businesses need to investigate and survey the purchasing power, tastes, and technical standards of the market to determine the exact destination of their products and have appropriate production and business plans.
In addition, businesses must also learn and master the regulations on technical standards, trade policies, tariff preferences, and consumer tastes in American countries to avoid returning goods for technical reasons or not enjoying preferential tariffs because of not meeting the conditions.
In the first four months of 2022, Vietnam's main exports to the Americas include phones and components, machinery, equipment, other tools and spare parts, computers, electronic products and equipment components, shoes of all kinds, and textiles.
The main imported products from the Americas are computers, electronic products, animal feed, raw materials, pharmaceuticals, and cotton of all kinds.
Source: VCN
Keywords: challenges, Vietnam, Americas, export
