Nafta trade deficit

Vietnam posted a trade surplus of US$1.29 billion during the four-month period, a positive result amid difficult global trade environment as a result of the Covid-19 pandemic.

Vietnam’s trade turnover in the January-April period rose by a 10-year high growth of 29.5% year-on-year to reach US$206.5 billion, the General Statistics Office (GSO) has said in a monthly report.

Production at Nha Be Garment for exports. Photo: Khac Kien

Upon breaking down, the country’s exports during the period surged by 28.3% year-on-year to US$103.9 billion, while imports were estimated at US$102.61 billion, up 30.8%.

As Vietnam reported an estimated trade deficit of US$1.5 billion in April, the overall trade surplus in the first four months of 2021 was narrowed to US$1.29 billion, but remained a positive note amid difficult global trade environment as a result of the Covid-19 pandemic.

According to the GSO, the foreign-invested sector made up 75.2% of the total exports with US$78.14 billion, representing an increase of 34.4% year-on-year, while the domestic-invested sector exported US$25.76 billion, or 24.8% of the total.

Among Vietnam’s key export staples, phones and parts earned the largest export turnover during the January-April period of US$18.4 billion, up 19.4% year-on-year and accounting for 17.7% of Vietnam’s total exports.

In addition, electronic products, computers and components have earned an estimated US$15.9 billion, up 30.8% year-on-year; followed by equipment and parts (US$12 billion and up 76.9%); garments (US$9.5 billion and up 9%).

Deputy Director of the Ministry of Industry and Trade’s Import and Export Department Tran Thanh Hai attributed Vietnam’s effective measures against the Covid-19 pandemic to its strong performance in trade.

“No disruption to business and production activities was key to help local traders fulfill their  their foreign peers’ orders,” said Hai.

Meanwhile, efforts from Vietnamese enterprises in adjusting to the new situation during the pandemic have also been decisive, he noted.

On the trade outlook for this year, Deputy Minister of Industry and Trade Do Thang Hai warned any resurgence of the Covid-19 pandemic would cause negative impacts on trade activities.

“Given the current context, safety measures to combat the pandemic continue to be the utmost priority,” said Hai.

Amid growing uncertainties surrounding the pandemic situation, Head of the Macroeconomic Policy Department under the Central Institute for Economic Management (CIEM) Nguyen Anh Duong called for enterprises to focus on markets having free trade agreements (FTAs) with Vietnam.

In the first four months of the year, the US, China, EU, ASEAN and South Korea remained Vietnam’s largest five export markets. Meanwhile, China continued to be Vietnam’s largest supplier, selling US$33.1 billion worth of goods to Vietnam, or an increase of 47.8% year-on-year. South Korea claimed the second place by exporting US$16.9 billion worth of goods to Vietnam, up 16.9% year-on-year, followed by ASEAN countries with US$14.1 billion, up 48.2%.

Vietnam posted a trade surplus of US$1.29 billion during the four-month period, a positive result amid difficult global trade environment as a result of the Covid-19 pandemic.

Vietnam’s trade turnover in the January-April period rose by a 10-year high growth of 29.5% year-on-year to reach US$206.5 billion, the General Statistics Office (GSO) has said in a monthly report.

Production at Nha Be Garment for exports. Photo: Khac Kien

Upon breaking down, the country’s exports during the period surged by 28.3% year-on-year to US$103.9 billion, while imports were estimated at US$102.61 billion, up 30.8%.

As Vietnam reported an estimated trade deficit of US$1.5 billion in April, the overall trade surplus in the first four months of 2021 was narrowed to US$1.29 billion, but remained a positive note amid difficult global trade environment as a result of the Covid-19 pandemic.

According to the GSO, the foreign-invested sector made up 75.2% of the total exports with US$78.14 billion, representing an increase of 34.4% year-on-year, while the domestic-invested sector exported US$25.76 billion, or 24.8% of the total.

Among Vietnam’s key export staples, phones and parts earned the largest export turnover during the January-April period of US$18.4 billion, up 19.4% year-on-year and accounting for 17.7% of Vietnam’s total exports.

In addition, electronic products, computers and components have earned an estimated US$15.9 billion, up 30.8% year-on-year; followed by equipment and parts (US$12 billion and up 76.9%); garments (US$9.5 billion and up 9%).

Deputy Director of the Ministry of Industry and Trade’s Import and Export Department Tran Thanh Hai attributed Vietnam’s effective measures against the Covid-19 pandemic to its strong performance in trade.

“No disruption to business and production activities was key to help local traders fulfill their  their foreign peers’ orders,” said Hai.

Meanwhile, efforts from Vietnamese enterprises in adjusting to the new situation during the pandemic have also been decisive, he noted.

On the trade outlook for this year, Deputy Minister of Industry and Trade Do Thang Hai warned any resurgence of the Covid-19 pandemic would cause negative impacts on trade activities.

“Given the current context, safety measures to combat the pandemic continue to be the utmost priority,” said Hai.

Amid growing uncertainties surrounding the pandemic situation, Head of the Macroeconomic Policy Department under the Central Institute for Economic Management (CIEM) Nguyen Anh Duong called for enterprises to focus on markets having free trade agreements (FTAs) with Vietnam.

In the first four months of the year, the US, China, EU, ASEAN and South Korea remained Vietnam’s largest five export markets. Meanwhile, China continued to be Vietnam’s largest supplier, selling US$33.1 billion worth of goods to Vietnam, or an increase of 47.8% year-on-year. South Korea claimed the second place by exporting US$16.9 billion worth of goods to Vietnam, up 16.9% year-on-year, followed by ASEAN countries with US$14.1 billion, up 48.2%.

Hanoi (VNA) – Vietnam posted a trade surplus of nearly 1.9 billion USD in the first four months of the year, according to the Ministry of Planning and Investment’s Foreign Investment Agency .

The foreign-invested sector enjoyed 14.4 billion USD in trade surplus while domestic firms reported a trade deficit of 12.5 billion USD.

In the first four months to April 20, foreign investors pumped 12.25 billion USD in Vietnam, equal to 99.3 percent of the amount recorded in the same period last year.

Of the amount, nearly 8.5 billion USD was poured into 451 new projects, up 24.7 percent in value and down 54.2 percent in project numbers year-on-year.

Meanwhile, more than 2.7 billion USD was added to 263 existing projects, down 10.6 percent and 21.5 percent, respectively.

The remaining investment capital, over 1 billion USD, was used for capital contribution and share purchases in a total 1,151 transactions.

Foreign investors landed investment in 17 sectors, with processing and manufacturing absorbing the largest amount of capital (5.2 billion USD), followed by power generation and distribution (5.1 billion USD), real estate (778 million USD), and whole sale and retail sale (464 million USD).

Among 67 countries and territories having investment in Vietnam in the period, Singapore took lead with 4.8 billion USD, Japan came second with more than 2.5 billion USD, and the RoK was the third largest investor with 1.5 billion USD.

Localities that attracted the most FDI were Long An (3.3 billion USD), Can Tho (over 1.3 billion USD), and Ho Chi Minh City (1.1 billion USD).

Minister of Planning and Investment Nguyen Chi Dung said that the ministry will work to complete mechanisms with a view to improving business climate for foreign investors, and set up preferential mechanisms to attract investment into the fields of high technologies and source technologies./.

VNA

India reviewing FTA

Speaking at a recent trade conference in Hanoi, Mr. Pranay Verma, Ambassador of India to Vietnam, emphasized the importance of Vietnam as a vital trade partner of India. Vietnam is considered like a gateway for India to access the larger ASEAN market. The Ambassador also expressed his wish to see India develop into an economy worth US$ 5,000 bn, thereby becoming the fourth largest economy in the world in the next five years. This development will be realized under a visionary scheme of the present Prime Minister of India, Mr. Narendra Modi, who wants to see a self-reliant India under a plan termed “AatmaNirbhar Bharat Abhiyaan”. The Ambassador also spoke about India reviewing the terms of the FTA with ASEAN, with an emphasis on more equality, while at the same time, leaving open the possibility for Vietnam-India trade to be prioritized under a bilateral cooperation framework.

In recent years, India has been reviewing and is reconsidering the continuation of FTA with ASEAN. The Indian Minister of Industry and Trade has even asked to renegotiate a number of articles under the agreement, but so far ASEAN has refused the suggestion. The total value of India’s trade with ASEAN countries reached about US$ 87 bn in the period 2019 to 2020, of which exports alone accounted for US$ 32 bn and imports amounted to US$ 55 bn. India’s trade deficit with ASEAN countries stands at US$ 23 bn. India is also currently under heavy deficit with many other partners, such as China. Therefore, adjusting and limiting the trade deficit will be a top priority in trade cooperation for the Indian government today. This shows that along with strengthening its economy, India is taking a tougher stance in global trade activities.

Currently, under India-ASEAN FTA terms, Vietnam must remove 80% of tariff lines within this year from the normal tariff reduction list, and 10% of tariff lines by 2024 in the sensitive list. By 2024, Vietnam will have to complete a schedule of commitments to reduce tariffs focused on commodity groups such as tea, coffee, rubber, vegetables, footwear, seafood, chemicals, metals, steel, minerals, machinery, equipment and construction materials. Products that Vietnam does not commit to include eggs, sugar, salt, petroleum, fertilizers, plastics, rubber, precious metals, steel, machinery, electrical equipment, automotive machinery, spare parts, and security items.

On the Indian side, so far India has eliminated 80% of the tariff lines, while 10% of the tariff lines have been partially cut. The goods that India commits to tariff elimination include live animals, meat, fish, milk, vegetables, grease, confectionery, fruit juices, chemicals, cosmetics, textiles, metals, steel, machinery, electrical equipment, and clocks. Under the commitment to cut taxes from India, many categories of Vietnamese goods will benefit such as garments, footwear, wood and wood products, seafood, coal, rubber, and steel. In 2018, India agreed to reduce taxes to 45% on coffee, black tea, and 50% on pepper. These are sensitive Indian products but are an export advantage for Vietnam. India’s exclusion list includes 489 tariff lines, accounting for 5% of the total trade value.

Mekong-India economic corridor

Currently, Vietnam is the 17th largest partner of India and 4th in Southeast Asia. According to data from the Ministry of Planning and Investment, India’s investments in Vietnam are estimated at US$ 1.9 bn. Regarding investments in India, Vietnam has six projects with total investment capital estimated at US$ 28.55 mn, mainly in the fields of pharmaceuticals, information technology, chemicals, and construction materials.

However, India wants to see stronger prospects of cooperation with Vietnam, and not just through trading and investing in projects. New Delhi also wants to have a closer connection and ties, such as by building the Mekong-India economic corridor, a multimodal economic corridor connecting India with the Mekong sub-regional countries. The Mekong-India Economic Corridor proposes to connect Ho Chi Minh City with Dawei in Myanmar via Bangkok in Thailand and Phnom Penh in Cambodia, and onto Chennai in India. This economic corridor will help increase trade between the CLMV countries, namely, Cambodia, Laos, Myanmar, and Vietnam, and with the rest of the world, as well as India. It will also substantially reduce travel distance between India and the Mekong sub-region.

The Mekong sub-region plays an important role in the foreign policy of India, as it shares a land boundary with one of the CLMV countries, namely, Myanmar in the Bay of Bengal. On the other hand, with China growing as an important economic power, the countries in the Mekong sub-region are gradually being attracted towards China, to further strengthen their economies. China’s growing influence in the region has prompted India to strengthen ties with countries under ASEAN by taking a number of measures to promote integration with the Southeast Asian region.

The India-Mekong economic corridor will certainly create opportunities for countries in the region for building a strong economic and industrial infrastructure and also for upgrading the existing infrastructure. The Mekong-India Economic Corridor will allow countries in the Mekong sub-region, including Vietnam, to integrate better and to have a globally competitive economy. In this respect, India chooses well to have Vietnam as an important trade partner.