Trade barriers, rising production costs and competition from China will make this year a challenging one for Vietnamese exporters to the US market, a senior official said on Friday.

Nguyen Duy Khien, head of the American Department under the Ministry of Industry and Trade, told a seminar held in HCM City that the Vietnamese economy had faced a “complicated situation” since the beginning of this year.

“The increase in the cost of raw materials has made domestic exporters less competitive, especially in the wood, textile and garment and processed cookingstuff sectors,” he said.

Businesses had also faced difficulties in accessing bank credit, and the resultant capital shortage had hampered expansion of production for exports.

Besides, severe competition from other countries, especially Chinese businesses, would continue to affect Vietnamese export activities this year, Khien said.

In sectors considered Viet Nam’s strengths like textiles and garments, footwear and furniture, China accounts for a major share in the US market.

Currently, China has surpassed Canada to become the biggest exporter to the US market. Last year, Chinese exports to the US reached US$364.04 billion, accounting for approximately 19.17 per cent of US’s import turnover.

Trade barriers

The US would continue to impose trade barriers to protect domestic production with legal instruments like the Farm Bill and the Lacey Act which had caused difficulties in the export of Vietnamese shrimp, tra and basa fish, Khien said.

He said the US had a complicated law system and many technical barriers as well as food safety and hygiene regulations, which are different in different states, so Vietnamese firms would find it difficult to navigate them.

Furthermore, most Vietnamese exporters were small businesses that found it very difficult to meet the technical standards set by the US market.

Khien suggested that exporters take several steps to improve economic relations between the two countries.

He said they should carry out market research on the demand as well as legal and technical barriers before trying to penetrate into the US market.

Currently, the overseas Vietnamese community in the US was about 1.3 million, and they should be used as a resource to enter the market as well as a consumer base for Vietnamese products.

Businesses should also pay attention to building and upgrading their websites frequently. Websites play an important role in international trade, especially with US partners. US businesses had the habit of looking for information on the Internet before contacting suppliers, Khien said.

He said the Government needed to provide more policy support to local businesses so that they could improve production and increase their competitiveness. The Government should help organise more trade promotion programmes to popularise Vietnamese trademarks and brands, he added.

Source: VNS