US Market: Still Potential for Vietnamese Goods

 

Apparel and textile: These are largest exports of Vietnam to the US, with estimated revenue of US$5.4 billion in 2006. After Vietnam joined the WTO, garment and textile exports no longer faced the quota mechanism, but hopes of accelerating garment and textile export to the US was dampened by the US special mechanism on supervising Vietnamese apparels. According to statistics released by the US Department of Customs, the US spent US$950 million importing apparel from Vietnam in the first quarter 2007, up 21 per cent on year. However, this figure remains under 3 per cent of total US import expenditure on this commodity; hence, the imposition of antidumping tax is impractical.

 

Footwear: In 2006, Vietnam earned US$930-950 million from footwear export to the US, representing a 30-32 per cent on year rise but accounting for only 2 per cent of US expenditure on this commodity. This figure makes Vietnam the fifth largest exporter of footwear to the US. This commodity’s advantage is that it faces few changes or technical barriers. Therefore, after three years under the BTA, this commodity group has the most stable growth rate of 40-50 per cent annually, mainly sports shoes and women’s shoes. However, major footwear exporters to the US market are foreign-owned companies.

 

Aquatic products: This is the third largest forex earner of Vietnam in the US, with US$750 million revenue a year. However, this commodity group faces many difficulties in penetrating the US market. Antidumping cases on tra/basa catfish and shrimp are closing export opportunities against Vietnamese enterprises.

 

Wooden furniture: The export revenue of wooden products to the US jumped from US$13 million in 2001 to US$684 million in 2005, bringing Vietnam to the seventh position in woodworks export to the US. Two reasons for the sharp rise are the increasing supply of Vietnamese woodwork products (especially thanks to foreign-invested projects), and the imposition of antidumping tax on Chinese bedroom wooden products. However, the growth rate of wood export value from Vietnam to the US has slowed down. The weak point of wholly Vietnamese enterprises is the inability to meet big orders from the US. Thus, to compete and increase export revenue, Vietnamese woodwork companies should expand production or join hands to receive big orders, produce diversified categories of products, and use as many skilled workers as possible.

 

Coffee, cashew nut, pepper: Vietnam is a world-leading exporter of these commodities to the US, with total revenues of US$359 million. To stabilise the market and increase export revenue from these goods, Vietnamese enterprises need to improve quality and diversify product categories in accordance with US rules on farm products.

 

Vietnamese exporters have made efforts to take full advantage of favourable opportunities generated by BTA implementation and WTO accession. The export potential and competitiveness of Vietnamese goods on the international market have been brought to a new high. To boost exports to the US, Vietnamese companies should focus on developing other high potential products like petrochemicals, electronic parts and devices, household furniture, auto parts, electric components, computer software and building materials.