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|The first five months saw falling export activity due to woes in the US, EU, and elsewhere, photo Le Toan|
An advisor from law firm McLarty Associates in Washington DC told VIR that at least 10 major US groups should have visited Vietnam in search of investment and trade opportunities in early 2020, with a total value of export contracts worth millions of US dollars. However, due to COVID-19 visits have been delayed, with many now expected to take place in the second half of this year.
The US firms are seeking Vietnamese trade partners in a wide range of sectors such as agriculture, fisheries, garments and textiles, footwear, and electronics.
With visits cancelled or postponed, Vietnam has lost opportunities to boost exports to the US, which is now facing wide unrest across all states, on top of the global coronavirus crisis.
Elsewhere, Japanese-invested FCC Vietnam Co., Ltd. at Hanoi’s Thang Long Industrial Park, producing automotive and motorcycle clutches, resumed its full operation two weeks ago thanks in part to its US partners continuing to resume its imports from the group.
However, the US partners are gradually recovering production and not fully importing all spare parts it needs as normal. Only when COVID-19 and growing protests are under control in the US will FCC and many other exporters in Vietnam be able to boost exports to the across the pond as previously.
In the first five months, the US spent $24.6 billion importing goods from Vietnam, up 8.2 per cent on-year. In the same period last year, Vietnam’s exports to the US increased 28 per cent on-year.
“The pandemic is still strongly raging worldwide, especially in nations that are Vietnam’s big trade partners, affecting the country’s export and import activities,” said Cao Quoc Hung, Deputy Minister of Industry and Trade. “So, it will still be difficult for Vietnam to boost exports in the time to come.”
Under the Ministry of Planning and Investment’s fresh survey involving nearly 130,000 local and foreign enterprises in Vietnam, 57.7 per cent of respondents reported that their exports have been strongly slashed, and 47.2 per cent of respondents with export activities said that they have been unable to export their products.
“It can be affirmed that Vietnam’s trade activities have been strongly hurt by COVID-19 since the second quarter of 2020, especially involving the EU, the US, Japan, and Southeast Asia,” Hung said.
In the first five months of 2020, Vietnam suffered from an on-year slash in exports to its key export markets, such as the EU ($12.9 billion, down 12 per cent), the ASEAN ($9.4 billion, down 13.1), and South Korea ($7.7 billion, down 0.5 per cent). However, Vietnam’s exports increased on-year in Japan ($8.1 billion, up 2.2 per cent) and China (16.3 billion, up 20.1 per cent on-year thanks to this nation’s early opening of border gates with Vietnam).
The Ministry of Industry and Trade (MoIT) last week reported that Vietnam’s export turnover in May has improved on-month, hitting $18.5 billion, up 5.2 per cent on-month, but down 15.5 per cent on-year, with export turnover – including crude oil exports – of foreign-invested enterprises being $11.9 billion, up 7.6 per cent on-month, and down 22.3 per cent on-year. Meanwhile, export turnover of locally-invested businesses reached $6.6 per cent, up 1.1 per cent on-month, and 0.5 per cent on-year.
PetroVietnam reported that its total export turnover rose from $96.1 million in April and $110.5 million in May. The five-month figure was $752.2 million, up 53.5 per cent on-year.
The group’s five-month crude oil exports hit nearly 2,000 tonnes, up 28.5 per cent on-year.
In May, Vietnam’s export turnover of computers, electronics, and their spare parts was $3.2 billion, up 5.4 per cent on-month, and 9 per cent on-year. Exports of machinery and tools hit $1.75 billion, up 16.2 per cent on-month.
Meanwhile, export turnover of mobile phones and their spare parts, mostly from Samsung Vietnam, decreased 30 per cent on-year; garments and textiles were down 34.3 per cent on-year; footwear down 18.5 per cent on-year, and wood products down 17.4 per cent on-year.
In order to boost exports, Vietnamese leaders and ministers have been working with counterparts in partnering nations to soon resume imports of Vietnamese goods. For example, Japan last week decided to resume flights between it and Vietnam, facilitating trade and investment ties in the time to come.
Earlier, Prime Minister Nguyen Xuan Phuc held a telephone call with Japanese counterpart Shinzo Abe, with one focus laid on expanding both nations’ trade and investment ties, also backed by some bilateral agreements including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Two-way trade hit $40 billion last year and $16.2 billion in the first five months, including $6.7 billion earned by Vietnam from exporting to Japan.
Vietnam’s total export-import turnover touched $37.9 billion in May, up 5 per cent on-month, but down 15.7 per cent on-year, and $196.84 billion in the first five months, down 2.8 per cent on-year, according to the MoIT.