Q1 data shows that Vietnam’s merchandise trade surplus in the first quarter with the US increased by US $ 13.5 billion, compared to US $ 7.5 billion in the first quarter of last year.
According to the World Bank’s (WB) affirmation in its recently released semi-annual report on Vietnam’s economy, Vietnam appears to benefit from immediate trade diversion after a trade dispute between China – US escalation. Increased tariffs, and the corresponding increase in input and final product costs, are expected to reduce international trade and global GDP.
According to US trade data for the period since the first round of tariff imposition from mid-2018, Vietnam is among the countries benefiting from trade disputes, at least in the short term. Q1 data shows that Vietnam’s merchandise trade surplus in the first quarter with the US increased by US $ 13.5 billion, compared to US $ 7.5 billion in the first quarter of last year, of which turnover increased mainly in goods subject to increased tariffs.
At the same time, as a highly open economy with a trade-to-GDP ratio of nearly 200%, Vietnam is also at risk due to increased uncertainty that could disrupt global supply chains. .
US-China trade tensions, which began to escalate in mid-2018, have a significant impact on the global economy. Increased tariffs, and the corresponding increase in input and final product costs, are expected to reduce international trade and global GDP.
But at the national level, there are still losers and losers, as shown by U.S. trade data for the period since their first round of tariff imposition in mid-2018, followed by Tariff raises retaliate.
According to the above data, Vietnam is considered to be one of the countries benefiting from the trade dispute, at least in the short term with the estimated benefit of about 2.2% of Vietnam’s GDP in 2018. The US is among the most important export markets of Vietnam. On average from January 2005 to March 2019, the value of Vietnam’s exports to the US increased by about 35%, with a contribution of about 20% of Vietnam’s total export revenue.
The main export items of Vietnam to the US market are mainly consumer goods, such as leather shoes, apparel, phones, furniture, tourism, seafood, and the proportion of those items is still increasing. up in imports into the US.
The trade war adds another dimension, but because Vietnam’s exports to the US now include alternative products imported from other Asian countries (meaning there is not much overlap between goods). made in Vietnam and goods made in the US). By the end of Q1-2019, Vietnam ranked 7th among the countries exporting to the US.
Thanks to sustained high and continuous export growth, Vietnam achieved a significant trade surplus with the US, amounting to US $ 39.5 billion in 2018 and about US $ 13.5 billion in the first quarter of 2019.
Preventing the risk of trade frauds in transit through effective management of rules of origin, the World Bank (WB) makes a number of recommendations for Vietnam as follows: Ensure full application Sufficient trade rules of origin are important obligations in many bilateral and multilateral free trade agreements, including CP-TPP and EVFTA.
Equally important is the mitigation of risks associated with transit transiting in order to take advantage of opportunities to access preferential markets or avoid high import protection. Fraud in transit transfers can pose an economic risk because of possible countermeasures under WTO rules. In order to effectively manage rules of origin, here are some policies to be considered.
Simplify and enhance transparency of regulations on certification of origin (CO). Simplified rules of origin certification can promote voluntary compliance. Commitments in free trade agreements (FTAs), in particular Chapter 3 of the CP-TPP Agreement are the basis for strengthening the current regulations on rules of origin and procedures.
Strengthening the national single window mechanism. Application of information technology in customs clearance procedures can improve transparency, particularly through a national one-stop-shop mechanism with specialized control agencies, including certification bodies. .
Awareness organization and appropriate training for export units. Applying international practices, specifically related to the requirement of enterprises to self-certify origin on the one hand, in order to enable them to enjoy the Joint Preferential System (GSP), but increase the risk of In the case of wrong specifications, it may be due to incompetent enterprises or due to fraudulent commitments. Raising awareness of businesses is a way to ensure national interests.
Strengthen coordination with the customs authorities of key trading partners (USA, China, etc.). Such international cooperation will help to establish an early warning system to monitor compliance with certificates of origin (CO). Exchanging intelligence, especially targeting at risk areas such as iron and steel, textiles, and footwear will help mitigate the risk of investigation. Applying technology, like blockchain technology, to traceability is a long-term measure. Traceability can be applied to all supply chains and logistics systems and is essential to transparency of rules of origin and production for clean exports.
* Source: BizLive