Director of the Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC) Nguyen Huu Tin said Viet Nam and the US have enjoyed impressive strides forward in economic cooperative ties, with the US being Viet Nam’s largest export market and Viet Nam being the US’s 6th-largest importer.
According to Tin, Viet Nam has affirmed its position as an important trade partner of the world’s largest economy. Thanks to the good control of COVID-19 in Viet Nam, Vietnamese firms have a huge advantage over foreign rivals struggling to fight the pandemic, he said, while suggesting that improving business and production capacity and capitalising on the US market will provide opportunities for Viet Nam’s economy to develop further in the time to come.
Vietnam moved up four grades to become the second-largest exporter to the US in 2020, with its export turnover to the country surging 24.5 percent to an estimated $76.4 billion.
The US remains the biggest importer of Vietnamese goods in recent years, importantly contributing to expanding markets, promoting products, and increasing foreign currency income. However, Vietnam’s exports to the US account for 2.7 percent of the American country’s total imports from all countries and territories worldwide.
Besides traditional exports such as textiles, footwear, and aquatic products, Vietnam has also shipped electronics, spare parts, and wooden products to the market.
According to the Vietnam Trade Office in the US, the two countries have witnessed a strong breakthrough in the bilateral trade turnover, especially Vietnam’s exports to the US.
Statistics from the US side showed that the two-way trade increased to 75.7 billion in 2019 from just $450 million in 1995 when Vietnam and the US established diplomatic relations.
Apart from trade cooperation, the two countries have also enhanced cooperation in investment, research, sci-tech development, transportation, education, telecommunication, and energy. According to Deputy Minister of Industry and Trade Do Thang Hai, the groups of textiles, footwear, aquatic products, electronics, components, and furniture will have great opportunities to boost exports to the US in the coming time. The two governments and business communities have made efforts in the past to bolster cooperation in a practical fashion and based on the complementary nature of the two economies.
The diverse cooperation is expected to create a foundation for substantial, extensive, and sustainable cooperation between the two economies in the future.
The biggest export market
According to the General Statistics Office, regarding the export market, the US is Vietnam's largest export market with a turnover of 62.2 billion USD, up 32.5% over the same period last year. Next is China with 32.7 billion USD, up 19.8%. The European Union (EU) market reached $26.1 billion, up 14.5%. ASEAN market reached 18.4 billion USD, up 23.3%. Korea reached 13.9 billion USD, up 9.9%. Japan reached 13.5 billion USD, up 8.6%. Thus, the growth of Vietnam's goods exports to the US reached a very high level, the export value was also nearly double that of the second largest market, China.
Medical protective equipment are transported on the aircraft of Cathay Pacific airline at Tan Son Nhat Airport, HCMC before shipping to the U.S. Photo courtesy of Super Cargo Service
Some of Vietnam's most exported products to the US are: textiles; Footwear; wood and wood products; other machinery, equipment, tools and spare parts; computers, electronic products and components; phones and accessories.
For example, for textiles, the US is always one of the main export markets. Textile and garment export turnover to the US in 2020 will reach 14 billion USD, accounting for 40% of total textile and garment export turnover of Vietnam. For 8 months of the year and the whole year of 2021, the US will continue to be the largest textile and garment import market from Vietnam.
Experts said the US’s demand for high-quality Vietnamese products has been increasing due to changes in the global supply chain, and US firms sees Viet Nam as a potential, safe investment destination post-pandemic.
They noted the complementary nature of the two economies, with Viet Nam having good production capacity in the fields of agriculture, seafood, and wood processing, among others, while the US is the world’s leading materials supplier and has the strongest purchasing power.
However, they advised Vietnamese firms to suitable measures to effectively access the US market, and strictly follow quality requirements of the US. The top exports to the U.S. included wood and furniture, textile and garment, footwear, and computers and electronics.
Experts said the prospects for exports to the U.S. are improving thanks to Vietnam’s success in containing Covid-19, the U.S.-China trade tension, and the recovering demand there.
Exports to the US are still growing quite well despite the complex COVID-19 situation
Despite the complex COVID-19 situation that leads to social distancing, Vietnam still eyed a double-digit growth rate in exports by the end of the third quarter in 2021.
According to the Ministry of Industry and Trade (MoIT), exports were estimated at 27 billion USD in September, down 0.8 percent month on month and 0.6 percent year on year.
However, the nine-month figure still grew 18.8 percent from the same period last year to about 240.52 billion USD.
Though the COVID-19 pandemic remains complex and unpredictable in the country and around the world, the MoIT said Vietnam is holding advantages for export thanks to free trade agreements. Notably, shipments to many markets enjoyed strong growth during the nine months such as to the US 69.8 billion USD (up 27.5 percent from a year earlier), China 38.5 billion USD (up 18.3 percent), and the EU 28.8 billion USD (up 11.5 percent).
Many "storms" in the last months of the year
In the first 9 months of 2021, in the overall picture of exports, the US market has a strong growth. The US continues to be consolidated as the country with the No. 1 position of Vietnamese exports. However, due to the impact of the Covid-19 epidemic, the forecast of export growth in the last months of the year is still unknown.
In fact, the export situation is facing many difficulties recently due to the impact of the Covid-19 epidemic.
The US is the largest and most important market for the Vietnam tire industry
In addition to the impact of the epidemic, another problem is that some Vietnamese products and goods continue to be at risk of being applied by the US to prevent evasion, origin fraud, illegal transshipment or application. trade defense measures. Specifically, plywood from hardwood materials, wooden cabinets, sofas with wooden frames, artificial stone, ceramic tiles, electric bicycles, copper pipes, gas cylinders, crate pins, wooden bars...
In addition, Vietnam's exports to the US are also facing legal investigation and trade defense issues, so exporters should pay attention to avoid errors as well as trade remedies. solutions to diversify the market more.
Vietnam among top three buying geographies of US firms
A new report finds that 43 percent of US-based respondents cited Vietnam among their top three buying geographies as of early 2021, doubled from 2019, according to Material Handling & Logistics, a US website.
The data shows a 16 percent year-over-year increase in demand for source search in Vietnam in the first quarter of this year, which represents a third consecutive quarter of growth that had initially begun as a post-lockdown rebound in mid-2020, the article cited a report from QIMA, a provider of supply chain compliance solutions.
It is worth noting that this growth is more than just a return to pre-pandemic levels, as Q1 2021 inspection demand has, on average, doubled compared to Q1 2019.
Furthermore, the appetite for Vietnam sourcing is far from satisfied and is poised to redefine the sourcing landscape in 2021: around one-third of buyers globally and 38 percent of US-based buyers name it among countries from where they plan to buy more in 2021.
The website said Vietnam is country in the region to benefit from expanded business volumes, as data on inspection and audits demand in Southeast Asia shows double-digit growth across the board, fueled by the renewed interest from American and European brands alike.
Vietnam targets $600 billion in export turnover in 2021
Vietnam witnessed the growth of exports and imports in the first four months of 2021 hitting a 10-year record high, data of the General Statistics Office (GSO) shows. Vietnam posted solid export performance in the first quarter of 2021, and at such a growth speed, its export turnover is likely to hit $600 billion for the whole year, experts have said.
The domestic sector exported $25.76 billion worth of goods and services, up 12.8 percent year-on-year and accounting for 24.8 percent of the total overseas shipments, while the foreign-invested sector contributed $78.14 billion, up 34.4 percent and representing 75.2 percent of the total, the VNA reported.
The highest growth was seen in the heavy industry and mining sector, which generated $57.58 billion in export revenue, a year-on-year rise of 33 percent. It was followed by the light and craft industries, 27.5 percent; and agriculture and forestry, 8.8 percent.
Four-month imports rose by 30.8 percent from a year earlier to $102.6 billion. Some 93.9 percent of the imports were capital goods, worth a total of $96.31 billion, up 31.4 percent. The remainder was consumer goods, valued at $6.3 billion, up 22.5 percent.
The GSO also reported a trade surplus of $1.29 billion and total retail sales of goods and services of close to VND 1.7 quadrillion ($73.5 billion) in the first four months of the year, up 10 percent year-on-year.
Tran Thanh Hai, Deputy General Director of the Agency of Foreign Trade under the Ministry of Industry and Trade (MoIT), attributed the positive results to Vietnam’s success in fighting the COVID-19 pandemic.
It is necessary to continue paying special attention to responding to the pandemic, he stressed, noting that this will be the foundation and most important factor in sustaining export growth in the time to come.
Free trade agreements (FTAs) Vietnam has signed, especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA (EVFTA), have benefited local exporters and helped them expand to new markets, Vietnamplus reported.
To maintain export growth, the MoIT has promoted online trade promotions and trade fairs as well as e-commerce, to support enterprises in maintaining trade links with partners, Hai said.
The ministry will also focus on accelerating institutional and administrative reform relating to exports, and providing information to exporters to address the difficulties they face.
Minh Trang