VN aims to narrow trade deficit with Thailand
VN aims to narrow trade deficit with Thailand
Improving the quality of domestically-produced goods is critical for Viet Nam to compete with imported products and narrow the trade deficit with Thailand, according to the Ministry of Industry and Trade (MoIT).
Statistics from the ministry’s Department of Asia and Africa Markets showed that Viet Nam ran a trade deficit of US$3.5 billion with Thailand in the first eight months of this year, a rise of 15.6 per cent over the same period in 2016. Two-way trade totaled $9.64 billion in the period.
Viet Nam mainly imported electric household appliances, fruit, automobiles, petrol and oil, plastics and car components from Thailand.
Given the increasing trade deficit with Thailand in recent years, from $3.25 billion in 2009 to $5.16 billion in 2016, the MoIT was seeking measures to improve exports to Thailand and gradually move towards a trade balance with this country.
Le Hoang Oanh, Director of the Asia and Africa Markets Department, said that Viet Nam was working to cut tariffs following commitments to the ASEAN Trade in Goods Agreement, according to which, many imported products from Thailand would enjoy preferential tariffs. Currently, Viet Nam has removed nearly 90 per cent of tariff lines, and would increase this to 98 per cent by 2018.
Oanh said Vietnamese consumers now preferred made-in-Thailand products because of their higher quality and lower prices compared to Chinese products.
In addition, big Thai retailers, such as Central Group and TCC Group were expanding in Viet Nam following acquisition deals to create favourable conditions for the sale of made-in-Thailand products. Thailand also regularly organised trade promotion activities in Viet Nam with dozens of trade fairs held in big cities every year.
According to Bui Huy Son, Director of the Trade Promotion Agency, running a trade deficit with a market in the integration progress is a normal thing. “It’s more important to boost exports to Thailand and develop trade in a sustainable way,” Son said. “Viet Nam should not focus on preventing imports but instead, improving the competitiveness of domestically-produced goods,”
Son said that trade promotion activities in Thailand should also be accelerated.
According to Oanh, Viet Nam should boost cooperation with Thai retailers to put more products on shelves.
In addition, Viet Nam should tighten management on imported products from Thailand to ensure food hygiene and other required standards are met.
Minister of Industry and Trade Tran Tuan Anh asked relevant departments to identify the reasons why Viet Nam was running a large trade deficit with Thailand, while Thai products had not penetrated widely in other ASEAN countries like they had done in Viet Nam.
Disagreeing with the establishment of technical barriers to narrow the trade deficit, Tuan Anh said that this was not a tool to prevent imports but to improve the quality of domestic products.
“Enhancing product quality is vital in rapid integration,” Tuan Anh said.
