Export in 2016: Expectations from TPP

(VLR) (Vietnam Logistics Review) The signing of TPP on february 4th, 2015 will surely bring opportunities for economic growth and export turnover increase in 2016 and succeeding years.

(Vietnam Logistics Review) The signing of TPP on february 4th, 2015 will surely bring opportunities for economic growth and export turnover increase in 2016 and succeeding years.

Satisfactory Results

According to reports from the Ministry of Trade and Industry, in January 2016, industrial production index increased 5.9%; export turnover estimatedly reached USD 13.8b- an increase of 2.2%: export from enterprises with foreign investment capital (crude oil enterprises excluded) estimatedly reached USD 9.6b- an increase of 5.3%, export from enterprises with 100% local capital estimatedly reached USD 4.06b.

Turnover and amount of export of product groups have an increase year- over- year. For instance, agriculture, forestry- and aqua-products estimatedly reached USD 1.77b- an increase of 9%, accounting for 13% of export turnover; industrial processing products estimatedly reached USD 11b- an increase of 2.8%, accounting for 79.4%, other product groups estimatedly reached USD 0.8b- an increase of 3.2%, accounting for 5.8%. Only group of fuel and minerals estimatedly reach USD 0.24b- a decrease of 40.7% year-over-year, accounting for 1.7%.

There are goods with high growth as vegetable 32.3%, rice 62.2%, toys and sports equipment 36%, interior furniture made from other materials (not wood) 18.8%, paper and products from paper 16.1%.

Vietnam’s export turnover to large markets maintains its growth: an increase of 17.3%, accounting for 22%, in the U.S market; an increase of 11.5%, accounting for 9.2% in Japan market; an increase of 24.3%, accounting for 12% in China market; an increase of 1.8%, accounting for 19.7% in EU market.

In January, 2016, import estimatedly reached USD 14b- a decrease of 0.8% year-over-year. However, trade deficit was USD 200m, equally to 1.4% export turnover.

Therefore, in February, 2016, the Minister of Trade and Industry has had guideline to the Department of Trade and Industry and relevant organization simultaneously have solutions to remove difficulties for enterprises, inform them about chances and challenges from FTAs, especially TPP, have appropriate guidelines and favorable conditions to help them operate effectively in markets with FTA in effect, and be more active in FTA negotiations to expand export markets.

New expectations

Satisfactory results of the first months of the year will be important premises for succeeding months to reach an import- export target of 10% in 2016.

The official signing of TPP will bring enterprises many opportunities to expand their import-export markets.

Economic experts said there are 5 points that make TPP an agreement of turning point of the 21st century, creating new standards for global trade and keep mentioning to matters of new generations. TPP helps country members, including Vietnam, have comprehensive approach to markets,have regional approach in setting commitments,solve new challenges to trade, have new factors to ensure all levels of economies to develop and enterprises of all sizes to have benefits from trade and create basis for regional integration.

By cutting tax tariff and non-tariff tax barrier to all goods, services and at the same time having comprehensive adjustments to all fields of trade, it will create opportunities and benefits for enterprises, laborers and consumers in all country members.

According to Minister of Trade and Industry Vu Huy Hoang, when TPP comes in effect, import-export goods of Vietnam’s core interests as textile, shoes and leather, agriculture, aqua-products will have good growth, especially textile and shoes-leather group will probably have a growth of 20%.

Agricultural and aqua-products will have lower growth for Vietnam has had remarkable amount of products to TPP market, including the U.S and Japan’s. A higher growth requires aqua-products enterprises to meet factors as expanding their growing acreage, paying attention to their product quality, especially regulations on food sanitary and on quarantine. If these factors are not met, export turnover is unable to be improved and is encircled by these trade barriers.

Minister Vu Huy Hoang said in order to maintain import-export growth in 2016, there should be solutions to remove difficulties and to push up productions. And there should be cooperation among ministers, sectors, local authorities and enterprises to make good use of incentives from free trade agreements, to reduce disadvantage effects and to consume products. Besides, enterprises should be more active in finding markets, having promotion activities, investments and expanding their markets.

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