VN’s trade gap still widens despite export increase
Although the country’s exports have made remarkable progress, the danger of the ballooning trade deficit is still threatening Vietnam, experts said at a conference on the trade policy for the stable development of Vietnam held Tuesday by the Ministry of Industry and Trade.
Many speakers said that because the domestic industries still need to import raw materials and machinery for their production before they can export, the trade gap would not stop if there is not a timely solution and policy from the government.
Dr. Dinh Van Thanh, associate professor and head of the Vietnam Institute for Trade (VNIT), said the target to narrow the trade gap is a tough thing to achieve.
In 2001, the trade deficit was at 7.9 percent, but the number climbed to 17.5 percent last year, he said.
Dr. Tran Cong Sach, deputy head of VNIT, said Vietnam has not made good use of its participation in over 85 trade agreements and seven free trade agreements (FTA).
He said the Vietnamese market share in China was 0.54 percent in 2004 and was 0.49 percent in 2010, seven years after joining the FTA ASEAN–China agreement.
Meanwhile, the Chinese market share in Vietnam has been rising, climbing from 14.3 percent in 2004 to 23.8 percent in 2010, becoming the largest foreign market shareholder in Vietnam.
Le Quang Lan, deputy head of the Department for Multilateral Trade Policies under the Trade Ministry, said only 12 percent of Vietnamese goods exported to ASEAN countries get the tax benefit agreed to in the FTAs Vietnam joined.
He added that the statistics are varied amongst countries, as the number of Vietnamese goods that have tax advantages in Korea is 78 percent, while it is only 28 percent in China.
Dr. Tran Cong Sach said the cost to manufacture export goods for Vietnam is 1.7 times higher than the average in neighboring countries.
Most of Vietnam’s neighbors only need US$500 to make a container, while Vietnam needs up to $700 for the same product, he said.
Vietnam is now an export processing country as the domestic industries have a great reliance on imported raw materials and machinery for their export production.
“This will lead Vietnam to the context that the increase of export could also widen the trade gap,” Dr. Le Quoc Phuong from the Ministry of Plans and Investment, said.
Associate professor Nguyen Van Nam, a former member of the prime minister’s research board, suggested the government encourage domestic industries to manufacture the 20 major groups of imported products to reduce imports and narrow the trade gap.
Former Deputy Prime Minister Vu Khoan also suggested the government restructure the economy to improve the trade deficit.
Print 
Although the country’s exports have made remarkable progress, the danger of the ballooning trade deficit is still threatening Vietnam, experts said at a conference on the trade policy for the stable development of Vietnam held Tuesday by the Ministry of Industry and Trade.
Many speakers said that because the domestic industries still need to import raw materials and machinery for their production before they can export, the trade gap would not stop if there is not a timely solution and policy from the government.
Dr. Dinh Van Thanh, associate professor and head of the Vietnam Institute for Trade (VNIT), said the target to narrow the trade gap is a tough thing to achieve.
In 2001, the trade deficit was at 7.9 percent, but the number climbed to 17.5 percent last year, he said.
Dr. Tran Cong Sach, deputy head of VNIT, said Vietnam has not made good use of its participation in over 85 trade agreements and seven free trade agreements (FTA).
He said the Vietnamese market share in China was 0.54 percent in 2004 and was 0.49 percent in 2010, seven years after joining the FTA ASEAN–China agreement.
Meanwhile, the Chinese market share in Vietnam has been rising, climbing from 14.3 percent in 2004 to 23.8 percent in 2010, becoming the largest foreign market shareholder in Vietnam.
Le Quang Lan, deputy head of the Department for Multilateral Trade Policies under the Trade Ministry, said only 12 percent of Vietnamese goods exported to ASEAN countries get the tax benefit agreed to in the FTAs Vietnam joined.
He added that the statistics are varied amongst countries, as the number of Vietnamese goods that have tax advantages in Korea is 78 percent, while it is only 28 percent in China.
Dr. Tran Cong Sach said the cost to manufacture export goods for Vietnam is 1.7 times higher than the average in neighboring countries.
Most of Vietnam’s neighbors only need US$500 to make a container, while Vietnam needs up to $700 for the same product, he said.
Vietnam is now an export processing country as the domestic industries have a great reliance on imported raw materials and machinery for their export production.
“This will lead Vietnam to the context that the increase of export could also widen the trade gap,” Dr. Le Quoc Phuong from the Ministry of Plans and Investment, said.
Associate professor Nguyen Van Nam, a former member of the prime minister’s research board, suggested the government encourage domestic industries to manufacture the 20 major groups of imported products to reduce imports and narrow the trade gap.
Former Deputy Prime Minister Vu Khoan also suggested the government restructure the economy to improve the trade deficit.
Many speakers said that because the domestic industries still need to import raw materials and machinery for their production before they can export, the trade gap would not stop if there is not a timely solution and policy from the government.
Dr. Dinh Van Thanh, associate professor and head of the Vietnam Institute for Trade (VNIT), said the target to narrow the trade gap is a tough thing to achieve.
In 2001, the trade deficit was at 7.9 percent, but the number climbed to 17.5 percent last year, he said.
Dr. Tran Cong Sach, deputy head of VNIT, said Vietnam has not made good use of its participation in over 85 trade agreements and seven free trade agreements (FTA).
He said the Vietnamese market share in China was 0.54 percent in 2004 and was 0.49 percent in 2010, seven years after joining the FTA ASEAN–China agreement.
Meanwhile, the Chinese market share in Vietnam has been rising, climbing from 14.3 percent in 2004 to 23.8 percent in 2010, becoming the largest foreign market shareholder in Vietnam.
Le Quang Lan, deputy head of the Department for Multilateral Trade Policies under the Trade Ministry, said only 12 percent of Vietnamese goods exported to ASEAN countries get the tax benefit agreed to in the FTAs Vietnam joined.
He added that the statistics are varied amongst countries, as the number of Vietnamese goods that have tax advantages in Korea is 78 percent, while it is only 28 percent in China.
Dr. Tran Cong Sach said the cost to manufacture export goods for Vietnam is 1.7 times higher than the average in neighboring countries.
Most of Vietnam’s neighbors only need US$500 to make a container, while Vietnam needs up to $700 for the same product, he said.
Vietnam is now an export processing country as the domestic industries have a great reliance on imported raw materials and machinery for their export production.
“This will lead Vietnam to the context that the increase of export could also widen the trade gap,” Dr. Le Quoc Phuong from the Ministry of Plans and Investment, said.
Associate professor Nguyen Van Nam, a former member of the prime minister’s research board, suggested the government encourage domestic industries to manufacture the 20 major groups of imported products to reduce imports and narrow the trade gap.
Former Deputy Prime Minister Vu Khoan also suggested the government restructure the economy to improve the trade deficit.
