HCM City benefits from trade pact

HCM City benefits from trade pact

HCM City's bilateral trade with Australia and New Zealand has increased significantly, after more than two years of implementation of the ASEAN Australia New Zealand Free Trade Agreement, according to the Department of Industry and Trade.

Many Vietnamese exports to the two countries recorded high growth after the two countries reduced import taxes to zero per cent in 2010 under the trade agreement, according to the department.

Total import-export value between HCM City and Australia reached US$840.2 million last year, a surge of 59 per cent compared with $529 million in 2009.

In particular, exports of cashew nuts reached $22.7 million, an increase of 25.9 per cent; textiles and garments, $22.4 million, a jump of 19.2 per cent; and footwear, $19.9 million, an increase of 36.1 per cent.

Seafood reached $18.9 million, an 18.7 per cent increase; and wood and products made of wood, $16.7 million, a 37.7 per cent increase.

Meanwhile, total import-export value between the city and New Zealand reached $182.8 million, more than double of $87.6 million in 2009.

In particular, exports of cashew nuts to New Zealand reached $25.49 million, a rise of 245 per cent; footwear, $3.8 million, an increase of11.1 per cent; garments and textiles, $3.2 million, an increase of 40.8 per cent; plastics, $2.03 million, a jump of 509.6 per cent; wood and products made of wood, $1.97 million, 62.5 per cent.

Speaking at the workshop about the impact of the agreement, Huynh Khanh Hiep, deputy director of the Department of Industry and Trade, said despite the global economic turbulence, Australia and New Zealand had remained the two most important partners of trade and investment for Viet Nam in general and HCM City in particular.

Many Vietnamese exports have become more popular with Australian and New Zealand consumers.

Challenges

However, challenges remain for Vietnamese exporters. Many companies, especially small- and medium-d ones, lack information about Australia and New Zealand markets.

They are facing difficulties in promoting trade and seeking experiences in working with overseas businesses, according to Hiep.

The competition with Chinese and Indian exports to these two markets has increased.

In addition, fruits and vegetables and other farm produce from Viet Nam face strict entry standards from other foreign countries.

Due to the strict requirements of export markets like Australia and New Zealand, Vietnamese exporters must improve the quality of products, including design and technology as well as transportation, which increases production costs.

Hiep recommended that Vietnamese export firms be patient and try to create trust with Australian and New Zealand businesses.

He said that exporters should always keep in mind that the quality of products must be a top priority in order to maintain a good business relationship with overseas businesses.

He also recommended that Vietnamese businesses learn the business customs of Australian and New Zealand companies and information about their markets, importers and distributors.

Export enterprises should also contact the Asia-Pacific Market Department, the Ministry of Industry and Trade's Import and Export Department, Viet Nam offices for Commercial Affairs in Australia and New Zealand for help and support in approaching these export markets.

They should also contact local trade promotion agencies and associations for help and support.

Australia and New Zealand are now among the leading export markets of Viet Nam.

Last year, bilateral trade between Viet Nam and Australia reached $4.64 billion, and between Viet Nam and New Zealand more than $535 million, according to statistics from the General Department of Customs.

The trade agreement is a comprehensive economic agreement that opens up and creates new opportunities for the 600 million people of ASEAN, Australia and New Zealand. This area has a combined economic output of $2.65 trillion. The agreement was signed on February 27, 2009 in Thailand and became effective on January 1, 2010.

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