Though asserting that it is very difficult to curb the trade deficit at 16 percent of the export turnover, Director of the Import-Export Department under the Ministry of Industry and Trade (MOIT) still stressed that easing the trade deficit is a must.

Could you please tell us your comments about the import-export results in the first five months of the year?

The export growth in May 2011 was not as strong as the growth in previous months. In principle, May, June and July are always the months which witness significant export growths. In May 2011, Vietnam’s export turnover only reached 7.52 billion dollars, just increasing by 0.8 percent over April 2011.

In fact, right at the beginning of the second quarter of 2011, we were warned that the tightened monetary policies and the task of fighting against inflation would bring a side effect that they would cause difficulties to the production.

In such circumstances, enterprises are lacking capital to implement their production and export plans. Therefore, we have proposed to clarify the money supply in the national economy: how many percent would be allocated to production and export sectors, and how many percent to be reserved for non-production sectors. This will help export companies ease the difficulties in accessing capital.

What I need to say is that Vietnamese enterprises have taken full advantage of the free trade agreements to boost exports.

Regarding the import, the import growth rate in the last five months was 29.1 percent. Of this, the growth rate of the products which Vietnam needs to import was 34.6 percent, and the growth rate of consumer goods was 13.8 percent, much lower than that of the same period of the last year.

Are any problems that we need to settle in order to bring more benefits to the national economy?

There are many problems existing that we need to settle in a long term. The imports of necessary goods increased too sharply. The problem was that the prices of the goods on the world market increased significantly, while we cannot intervene in the prices. It is also very difficult for us to reduce the products of this group, because the products are all necessary for domestic production.

Therefore, we are worried about the world prices. If the goods prices keep rising, and the oil price stays firmly at over 100 dollars per barrel, it would be very difficult to curb the import turnover at less than nine billion dollars a month.

This will absolutely depend on the oil prices. The average oil price jumped from 650 dollars per ton in the first five months of 2010, to 960 dollars per ton, a sharp increase of 50 percent.

The import turnover increased by 9.4 billion dollars in the first five months of 2011 in comparison with the same period of 2010. Of this amount, the 7.5 billion dollar increase came from the price increase, while the export volume increase could bring the increase of 1.9 billion dollars only in import turnover.

The Government’s target of curbing the trade deficit to below 16 percent has been described as an “impossible mission”. Could you please tell us more about the newly released policies by MOIT?

It is really a very difficult task to curb the trade deficit at 16 percent of the export turnover, especially when there are too many unpredictable factors and there has been no sign showing the possible price decreases in the world market.

As you may know, MOIT has released the Notice No 197, stipulating that cosmetics, mobile phones and liquor products can only be imported through some seaports. The legal document has become valid since June 1, 2011. To date, we have not got any complaints from customs agencies about the difficulties in the implementation.

MOIT has also released Circular 20, stipulating the legal documents importers have to show to customs agencies when importing cars. As far as I know, the circular has raised controversial arguments.

Many people believe that this is a necessary measure to control the imports. Every year, Vietnam imports about 30,000 cars, so the new decision would have impacts on 30,000 consumers only, because cars are not a popular product, and they are not listed among the products Vietnam encourages to import.

Some people have warned that the new decision would kill many car import companies. Meanwhile, statistics show that 18,000 cars had been imported by May 15. There were 200 importers, including two foreign invested and 198 Vietnamese enterprises. These include 100 enterprises, which imported less than 50 cars. As such, in the first five months of the year, every importer imported about 10-20 cars.

Source: TBKTVN