Exports recovered strongly thanks to internal strength

	Exports reach US$37 billion in the second half of March
	Reviewing regulations on specialized management and inspection for imports and exports

Textile and garments is one of the export items that recorded a strong growth rate in the first quarter. Photo: N.Thanh

Commodity exports are expected to prosper in the coming quarters, especially thanks to the support from the implementation of Free Trade Agreements (FTAs).

Impressions of processed industrial goods

According to the latest assessment of the Ministry of Industry and Trade, in March 2022, the export turnover of goods recorded a strong recovery, estimated at US$34.06 billion, up 45.5% compared to the previous month and up 14.8% compared to the same period last year.

In the first quarter, in the group of processed industrial products, phones and components have the largest export value, reaching US$14.23 billion, accounting for 16% of total export turnover, down 0.9% over the same period last year; computers, electronic products and components reached US$13.05 billion, up 9.2%; machinery, equipment, tools, and spare parts reached US$9.9 billion, up 8.8%; textiles and garments reached US$8.84 billion, up 22.5%; footwear reached US$5.29 billion, up 10.1%; wood and wood products reached US$4.04 billion, up 5.6%; and iron and steel of all kinds reached iron and steel of all kinds reached US$2.16 billion, up 7.1%.

In which, a number of items increased sharply compared to the first quarter of 2021 such as fertilizers of all kinds increased by 183% (due to high fertilizer prices and sudden increase in demand); chemicals increased by 67%; precious stones and metals increased by 55.7%; rattan, bamboo, sedge, and carpet increased by 34.4%; plastic products increased by 30.2%; and animal feed and raw materials increased by 29.7%.

From the beginning of the year to the end of March 2022, export turnover of goods was estimated at US$88.6 billion, up 12.9% over the same period last year, of which the domestic business sector increased significantly (up 22%) compared to the FDI sector (up 10%).

"This result demonstrated the efforts of domestic enterprises in restoring production and business, and resuming the supply amid the pandemic," said Deputy Minister of Industry and Trade Do Thang Hai.

An in-depth analysis of export products also showed positive signals. In the first quarter of 2022, the export turnover of processed industrial products continued to make an important contribution to the overall growth rate of export activities with a turnover of US$76.18 billion, up 11.6% compared to the first quarter of 2021 and accounting for 86% of the total export turnover. In general, the export turnover of most of the products in the group grew higher than in the first quarter of 2021, in which textiles and garments were the items with a strong export growth rate of 22.5%, earning US$5.29 billion.

Than Duc Viet, General Director of Garment 10 Corporation, said that after the Lunar New Year is the off-season time of the garment industry. Before the Covid-19 pandemic, this was usually leisure time, but this year is a busy year. Currently, the market situation is better than in 2020 and 2021. All traditional products of May 10 were fully booked until the end of June 2022. Even some products such as veston, after about 15 consecutive months from 2020 to 2021 with few orders, only 30% of production capacity, this year, orders have been placed until the end of September 2022. The production capacity of this enterprise was completely restored, and even orders increased beyond their production capacity.

The Ministry of Industry and Trade forecast that in the future, exports would continue to prosper. That is because the world economy recovers and Vietnam's FTAs are fully implemented with more preferential tariffs and commitments on facilitating and reducing barriers. Besides, the wave of investment shift to restructure the supply chain of foreign corporations with large production scale and wide customer networks will be a new driving force for import-export activities.

“Additionally, the economic recovery package with supporting policies including taxes and fees will help the business community, especially those industries heavily affected by the pandemic, quickly recover production and business activities," said Hai.

Motivation from the FTAs

Regarding the reasons for helping the export of goods from the beginning of the year to now, especially the group of processed industrial products, achieved positive results, trade expert Pham Tat Thang said that one of the important factors was that Vietnam has taken advantage of the benefits brought from the FTAs. In addition to the FTAs such as the Vietnam-EU FTA (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Vietnam-UK FTA (UKVFTA), in 2022, the Regional Comprehensive Economic Partnership (RCEP) will come into effect. Taking advantage of the benefits and incentives of the FTAs is a matter of interest to the central and local level as well as enterprises, creating good momentum for exports.

Talking more about this issue, Viet said that May 10 was focusing on taking advantage of two main FTAs, the CPTPP and the EVFTA. In these two FTAs, it is easier to take advantage of the EVFTA because the proportion of Vietnam's garment exports to Europe is low compared to its potential. With the EVFTA, it is certain that the growth of exports to the European market will be high in this year and the following years.

Notably, May 10 has expanded its production capacity in Thai Binh, Thanh Hoa, and Quang Binh. This year, this enterprise aims to recruit 3,000-5,000 employees for three big projects in the three localities above not only for export orders but also for orders that increase in market share in the FTAs such as the EVFTA or the CPTPP.

“The main export markets of May 10 have been the US, Europe, and Japan. May 10 always balances the three markets mentioned above. For example, the US market accounts for about 40-45%; Europe about 30-35%; Japan about 10-15%; and the rest are other markets. However, in 2020 and 2021, the US market has risen to 65%. In 2022, after the pandemic is controlled and the European market recovers, the structure of May 10's export markets will be balanced again. It is expected that the European market will regain the old rate of about 30-35% of the total export revenue of Garment 10," said Viet.

For the whole year of 2022, Deputy Minister of Industry and Trade Tran Quoc Khanh said that the FTAs, especially the new generation FTAs, have passed the initial implementation stage, businesses have gradually adapted to the commitments of the FTA along with the import tax schedule of the partners to continue to be eliminated or reduced. This creates more competitive advantages for Vietnamese goods to penetrate markets, promote advantages with preferential tariffs, and enhance export growth.

Nguyen Cam Trang, Deputy Director of the Import-Export Department (Ministry of Industry and Trade), said: "The Government, ministries, and sectors have made efforts to sign the FTAs, opening up opportunities in terms of tariffs for businesses when exporting. The necessary condition is the efforts of enterprises in self-innovating and improving their competitiveness to make products that meet the requirements of import markets, thereby taking advantage of incentives from the FTAs.”

In the next quarters, the Ministry of Industry and Trade will focus on supporting businesses in market information and export promotion, taking advantage of commitments in the signed FTAs, and finding new markets through global value chains; closely monitoring changes in the international situation, proactively assess the impacts of such events on Vietnam’s production, import, and export to promptly make appropriate adjustments and responses, and strengthen communication information and support for associations and businesses.

"Besides, the ministry will review and assess domestic demand for strategic commodities such as fertilizer, petrol, and coal to have appropriate management measures for export and import activities, taking advantage of price opportunities for export and ensuring sufficient supply for domestic consumption and production needs, especially in case the prices of raw materials are too high,” said Hai.