Help and create opportunities for businesses to expand into new markets

Assoc.Prof.Dr. Nguyen Van Nam, Chairman of the Council of the Institute for Brand Strategy and Competition.

With the current world economic situation, in your opinion, how will the import and export activities of Vietnamese enterprises be affected?

Currently, many Vietnamese import and export enterprises are facing difficulties in the global economic downturn and high inflation, which reduces the import demand of Vietnam's main markets.

This caused many businesses to fall into a shortage or no orders in late 2022 and early 2023. As a result, many businesses had to suspend production, allow workers rotational leave, and even temporarily closed due to the inability to maintain operations.

However, under the analysis of the economic situation and inflation of many countries, these difficulties may only last until the end of the first quarter of 2023, after the economic situation may improve and inflation declines, which helps economic activities and trade to be vibrant again.

How do you comment on the support and benefits from FTAs, especially the new generation FTA for the export activities of Vietnamese enterprises?

FTAs help businesses export more smoothly, the current difficulties are entirely due to the objective context from the world economic situation. Accordingly, Vietnamese businesses have made great efforts to take advantage of opportunities and incentives in terms of tariffs, rules of origin, etc. to increase export volume and value, and at the same time strengthen linkages, joint ventures, and get involved in the supply chain and attract investment. Thanks to that, Vietnam still maintains its trade surplus despite the challenging context.

In addition, in order to overcome the limitations of declining demand in traditional markets, Vietnamese enterprises have taken advantage of the FTAs to expand and promote trade in goods with many new markets, export products and services. In addition, when they are eligible to join and develop trade with countries that have signed FTAs, Vietnamese enterprises will also have more favorable conditions and opportunities to cooperate with partners from markets that do not have or are about to have an FTA.

To increase export opportunities thanks to FTAs, what should businesses and management agencies do, sir?

Enterprises are currently facing many difficulties; many businesses are moderately operating to retain workers with the hope of restoring orders and export activities in early 2023. Therefore, the time is right.

In this situation, businesses need support from regulators more than ever. These are tax incentives, finance, and credit capital to trade promotion programs.

FTAs bring many advantages, but it is necessary to have trade promotion programs for new incentives and supports to come into reality and for businesses to find partners and customers. With up to 98% of small and medium-sized enterprises, the self-implementation of trade promotion programs is still very difficult; and there are not enough conditions and funds to do so. Therefore, the management agencies with a key role are the Ministry of Industry and Trade, the foreign trade counselors who need to preside over, organize into working groups, send to survey the market, conduct fairs, exchange, trade connection by market group or product group.

In addition, the support programs need to focus on small and medium enterprises, enterprises exporting key products so that the support is effective and close to reality.

Besides, the work of information and dissemination about the FTA, the preferential mechanism and the direction to take advantage of the FTA is also very important because there are still many businesses, or newly established enterprises that do not understand the mechanism of the FTA. In my opinion, these support activities should be carried out with high responsibility, avoiding formality for the common goal of business development and increasing national export turnover.

For businesses, as many directives from the Government have stated, it is necessary to promote market diversification, so businesses need to learn about information and export conditions to new markets. Currently, some markets in Eastern Europe, Africa and the Americas are still quite new, so businesses can take advantage to create relationships and promote exports.

In recent years, Vietnamese enterprises have tended to expand and promote in the ASEAN market. This is a very good opportunity because this market has many incentives and convenience in transporting goods. In addition, some countries such as India, Australia are also being noticed, but these are difficult markets or have complex religious cultures, so businesses need to pay attention to improving the quality of products in line with market needs.

Of course, with the work on market expansion, businesses must be very proactive because support from the authorities is only a part. Enterprises need to research, learn and survey the market, look for partners and cooperate clearly, based on a strict legal basis to not only ensure that the product is suitable for tastes but also to avoid possible risks.

Thank you!