What to expect from the Vietnamese Offices in foreign countries?

Lack of human resources as well as the funds for trade promotion activities in foreign countries creates many difficulties. Picture: ST.

Exchanging in promoting trade

According to the Ministry of Industry and Trade, the number of Vietnamese Trade Offices in foreign countries as well as the staffs are quite modest, with figures of 57 and 139 respectively. However, during the past years, especially in the two years of 2016-2017, the Trade Offices have done quite well with their assigned tasks, exploring actively the local market and information that support enterprises well.

The figures from the Ministry of Industry and Trade show that over the past two years, the Trade Offices have supported the implementation of more than 500 activities of trade promotion by contacting, meeting directly or exchanging by email. The Trade Department has assisted domestic and foreign enterprises to find information about the market, update the regulations on import and export, linking trade, searching for partners and good resources.

Deputy Minister of Ministry of Industry and Trade, Tran Quoc Khanh, said that the trade promotion activities of the Trade Offices have been reformed in the direction of focusing on trade promotion for a number of specific commodities where Vietnam has advantages, reducing the activities of general trade promotion. The trade Department in Italy, the Russian Federation, France, Japan, Australia, Laos, Thailand, the Philippines, Korea ... have cooperated actively with other regional departments in promoting Vietnamese goods access to the distribution chain in their country, scaling Vietnamese goods in the periodical week schedule in the distribution chain, as well as linking Vietnam enterprises with the main agricultural markets in the host country.

As economies become more integrated, tariff barriers are gradually removed, and non-tariff barriers are increasingly being set up in markets. In that context, it would be a mistake if we do not mention the role of the Trade Offices in the overcoming these barriers to bring Vietnamese goods to penetrate better the export markets. According to the Ministry of Industry and Trade, in the years 2016-2017, Vietnamese Trade Offices in foreign countries have cooperated actively with the Trade Defense Department in responding to trade remedies (anti-dumping subsidies) applied by the host country to Vietnam's export goods. Specifically, the Trade Department has provided information and coordinated the handling of 12 trade remedies cases in 2016, 13 cases in 2017, and dozens of anti-dumping cases from previous years.

"Bridge" effective for businesses

Some experts said that one of the significant roles of the Trade Offices in the period of deepening economic integration is to support Vietnamese enterprises to integrate deeper into the international market. According to the Ministry of Industry and Trade, in terms of business support, the regular activities of the Trade Offices focus on supplying information related to the import-export management policies of the host countries and Vietnam; assisting enterprises in market research, connecting partners, and signing contracts; supporting domestic enterprises to verify, find out information about partners in the local area; participating in the settlement of disputes; advising on legal issues to help domestic enterprises bring goods to the local market ... Deputy Minister of Industry and Trade Tran Quoc Khanh assessed: Trade systems can become an effective "bridge" between Vietnamese businessmen and foreigners living in a country. Vietnamese businessmen living abroad are involved in importing Vietnamese goods, including direct delivery to distribution channels or into the markets zones, and shops owned by Vietnamese people.

Le Tien Truong, General Director of Vietnam Textile and Garment Group (Vinatex), said: "In the period of integration and participating in the international economy, over the past 20 years, the textile industry is closely linked to the expansion of the market. In the 1990s, and the 2000s, traders in all countries around the world have supported textile enterprises a lot. The textile and garment industry started in the beginning with no contact with foreign partners and knowledge of the business culture of other countries, limited in foreign languages, so far there has been relatively senior staff contacting actively with customers of other countries.

"At the present time, it can be said that there are not many textile and garment enterprises that rely on the Trade Department , especially in the US market, the EU, South Korea ... Vietnam textile and garment enterprises can access the market actively. This result is thanks to the process over the past 10 years of support and cooperation from the Vietnam Trade Office in countries around the world, and has not happened all of a sudden. In addition, the Vietnam Trade Office in foreign countries also supports the textile and garment industry to promote the export of goods to major markets, although in the last 3 years the world total demand of the textiles and clothing has not increased, " Mr Truong said.

The structure of the Trade Department must be changed

It shows that the greater the economic integration, the importance of Trade Counselors, Commercial Counselors is confirmed. However, there are many difficulties in the activities of the Trade.

Ms Nguyen Thi Thuy, Vietnam Trade Counselor in Australia said: Australia is a potential import market, bringing both opportunities and challenges for Vietnamese enterprises. The market is relatively open, no import quota is applied and almost all tax imports are from 0-5%. However, the Australian Government has introduced a number of import regulations, particularly stringent food safety and phytosanitary regulations.

Over the past years, the activities of the Trade Offices in general and the Vietnam Trade Office in Australia in particular focused on information, research on local policies,and giving support to enterprises ... However, the floating problems at present are human resources and resources for trade negotiations do not meet the increasing demand for trade between countries. "Typically at the Vietnam Trade Office in Australia, there are now only two people, with a big workload. The specific fund for trade promotion activities is only USD 15,000 per year. This makes the Trade Office to have to make a lot of effort," Ms Thuy said.

According to Ms. Thuy, with the current mechanism, the Trade Department mainly solves the task of collecting information and studying the mechanism of market policy. There are many disadvantages in trade promotion and industrial investment. Therefore, it is necessary to change the organizational structure of the Trade Department in two ways to promote the operation of it, Ms. Thuy suggested. Firstly, it is possible to keep the current form of transaction. Trade Offices belong to a part of the diplomatic mission in foreign countries, only doing research policy. Under this option, Commercial Counselors will play a role similar to those of other Counselors such as the Political Counselor, Economic Counselor, Education Counselor ... However, besides operating only as a Trade Office, it can establish a Trade Promotion Office separate from the diplomatic mission and revenue activities. The Trade Promotion Offices use part of the state budget for minimum requirements to maintain office space. Expenditures from revenue activities will be used for trade promotion activities, supporting enterprises in a practical and effective way.

Secondly, current Trade Office practices can be kept, doing both policy research and trade promotion, but it should be allowed to charge for some specific services required by enterprises. With both of these options, the hiring of indigenous staff needs to be considered because local staff are well versed in the local language market, so they can operate easily, are market-savvy and customer-oriented. Meanwhile, Vietnamese officials also need time to be able to master the market and have a network of businesses. When they can master the market, the term expires.