Vietnam Incurs Big Trade Deficits with ASEAN Countries

Vietnam, a new WTO member, has faced trade deficits with ASEAN countries, including Singapore, Malaysia and Thailand, said foreign Commerce Offices.

 

Singapore’s exports to Vietnam in 2006 and in the first seven months of 2007 tripled against contrary direction.

 

In 2006, Singapore exported Vietnam-sourced goods worth nearly US$8.7 billion but spent only US$2.6 billion on imports from Vietnam.

 

Malaysia’s exports to Vietnam in recent three years were always valued at over US$1.2 billion while Vietnam only exported goods to the foreign country worth US$1 billion last year.

 

Thailand’s export value to Vietnam hit US$1.33 billion in 2004, up 44.59 per cent on-year while the country’s spending on goods from Vietnam stood at only $308.59 million, up 23.7 per cent on-year.

 

Regional countries have taken advantages of incentive tax rates of 0-5 per cent in pursuant to ASEAN free trade area tariff reduction framework (EPT/AFTA), which is attributed to the massive penetration of ASEAN goods in Vietnam’s market.

 

The two-way trade between Vietnam and ASEAN bloc rose from $3.49 billion in 1995 to $18.9 billion in 2006, according to the GSO. However, Vietnam’s trade deficit with these countries climbed to $6.18 billion in 2006 from $2.26 billion in 2002. Vietnam often imports goods from ASEAN via Singapore due to low capacity of Vietnamese ships.

 

ASEAN now accounts for nearly 35 per cent of Vietnam’s total import turnover and 16 per cent of the total export market share. (Vietnam Economic Times)