Firms need to embrace transformation to sustain exports

With major import markets tending to impose more stringent requirements in terms of environmental and social responsibility, Vietnamese firms need to have strategies and plans to quickly switch to green manufacturing to sustain exports, heard a recent conference in Ho Chi Minh City.

Ho Thi Quyen, Deputy Director of the Investment and Trade Promotion Centre of HCM City (ITPC), told the conference titled “Current Foreign Trade Transactions: Changes in Business Strategies and Disputes Management” that Vietnam has integrated more deeply into with global markets, which creates new opportunities for enterprises to expand trade.

In the event, she said, trade has indeed grown sharply in recent years: imports and exports in the first half of 2024 were estimated at more than 190 billion USD after rising by 14.5% year-on-year, and there was a trade surplus of 11.6 billion USD.

But it has come with challenges and risks.

Chau Viet Bac, Deputy General Secretary of the Vietnam International Arbitration Centre (VIAC), said businesses, especially in foreign trade and logistics, are facing technical barriers related to the environment, green manufacturing and digital transformation since the world is paying attention to sustainable development.

Agile businesses could take advantage of the opportunities to thrive while those that adapt more slowly would face increasing challenges since markets are steadily making regulations more stringent, he said.

With sustainable development becoming an inevitable trend globally, Quyen highlighted the need for Vietnam to continue implementing mechanisms and policies for green transformation and development of a green and circular economy.

Speakers also referred to the legal risks businesses face in import and export activities.

Bac said disputes related to foreign trade and international purchase and sale of goods have always ranked first in the number of cases coming before the VIAC in recent years.

In many of them, Vietnamese enterprises were at a disadvantage because of mistakes right from the stage of negotiating to signing contracts, he said.

Contract management and risk management are extremely important in international trade, he said.

Bui Van Thanh, head of NewSun Law Firm, who has many years of experience in supporting domestic and foreign businesses with legal matters, said businesses need to clearly understand the nature and characteristics of foreign trade contracts and potential political and cultural risks.

They also need to verify the legal status, financial situation and compliance with local laws and regulations of the contracting parties, and the legal provisions of the host country to respond to risks, he said.

They need to be very careful about the terms and conditions in contracts.

Vu Quang Huy, general director of TEKCOM JSC, said exports of wooden products are looking up since demand recovered, but businesses are facing a challenge in meeting sustainability criteria set by markets such as the EU Deforestation Regulations, US’s trade defense measures against the wood industry, and net-zero emission goals.

They have also been scammed and routinely face risks related to payment, transportation, market fluctuations, regulatory changes, and others, he said.

He too spoke about the need for businesses to carefully evaluate partners, draft clear and detailed contracts, have safe payment methods and goods insurance, and monitor and update market information regularly.

Ton Nu Xuan Quyen, Chairwoman of BLUSAIGON JSC, said international trade is highly volatile, with a number of unpredictable factors stemming from geopolitical risks that push up costs.

Organised by ITPC and VIAC, the conference saw the participation of nearly 200 delegates from import-export companies and business associations in the city./.