Vietnamese Exporters Confronting Trade Barriers

Vietnam’s exports are expected to jump high in 2010 as global economies have more signs of steady recovery. However, Vietnamese exporters have to overcome numerous challenges, including trade barriers in importing markets, especially anti-dumping and anti-subsidy cases in the EU market. Vietnamese firms should conduct thorough market researches to understand regulations and get early warnings of trade barriers in importing markets, according to experts.

Currently, the EU is the largest export market for Vietnam after the United States. Many key exports like apparels, textiles, footwear, handicrafts and seafood are under growing pressures of technical barriers in the EU market. For example, since earlier this year, the EU has imposed a 10 percent anti-dumping tax on Vietnamese leather-capped shoes, slashing the country’s footwear exports to the market.

 

However, at a workshop on trade barriers with Vietnamese business associations and companies” held by the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the European Chamber of Commerce in Vietnam (EuroCham), Mr Hans Farnhammer, the EU delegation to Vietnam’s First Secretary, said: The technical standards set by the EU are growing in both quantity and depth, yet the amount of Vietnamese goods exported to the market has continued to increase over the years. According to statistics, in 2003, Vietnam exported EUR2.3 billion worth of products to the EU and its export turnover rose to EUR$7.7 billion in 2009 and EUR1.4 billion in the first two months of 2010.

 

“It is too difficult for Vietnamese exporters to strictly comply with the regulations set by the European Union, therefore the prospect of getting access to the EU market and being competitive are very positive in the coming time,” said Mr Hans Farnhammer.

 

Mr Phan The Rue, former Deputy Minister of Trade and former chief negotiator at Vietnam - Japan Economic Partnership Agreement (VJEPA), said trade barriers, coming in more forms and in number, are being applied by importing countries. Requirements on product quality or antibiotic residue in agricultural products and seafood may lead Vietnamese products to antidumping suits. Thus, Vietnamese companies may face hundreds of legal actions each year.

 

Mr Rue said Vietnamese exporters needed to get legal advice before entering foreign markets, he said. The risk of policy change is hard to anticipate; thus, exporters should essentially establish market research departments to give early alerts on the impacts of such changes.

 

Sharing this view, Professor Claudio Dordi, a trade assistance consultant from the Multilateral Trade Assistance Project III (MUTRAP III), said: Vietnamese companies need to study commercial standards at their export markets when they have intention to make inroads into those markets.

 

According to Mr Nguyen Tuan Quynh from the Ho Chi Minh City Young Business Association, the main reason for commercial lawsuits is insufficient understanding of trade barriers. “Most Vietnamese companies have small scales and their legal awareness is limited. When they enter the world market, they encounter many problems arising from trade laws in countries Vietnam signed agreements with. Besides, Vietnamese enterprises and business association do not have chance to take part in international trade agreement negotiations or policymaking; they thus usually encounter barriers and are quite puzzled in dealing with,” Quynh said.

 

According to experts, Vietnamese business associations need to uphold their roles of informing policymakers and enterprises of policies and market developments in importing countries to help enhance the competitiveness of Vietnamese commodities on the international market.