What is your assessment of the trade situation in 2006?

Viet Nam achieved a high growth rate in 2006, with a record US$39.6 billion export turnover - US$2 billion more than the year’s target and an increase of 22.1 per cent year-on-year.

The trade deficit was less than the previous year. There were many high-revenue sectors such as the garment sector, which was worth US$5.9 billion; textiles, US$5.4 billion; and shoes, US$3.4 billion. These sectors should continue to prosper this year.

In addition to traditional markets in Asia, Europe and America, we have also conducted trading activities in Africa and Latin America.

Export turnover has increased in all regions of the world - especially export markets with a high rate of consumption, such as Europe, 27 per cent and America, 33.4 per cent. The Asian market though showed a smaller increase compared to the nation’s export growth rate, but still showed a 19 per cent increase.

Foreign investment has reached record levels and will serve as a catalyst for export and import activities in coming years. Some new sectors have shown a high growth rate such as ship-building.

In the future, Viet Nam will be among the most powerful ship building countries in Asia as we have many advantages, such as a large labour force and natural harbours for building ships all year round. In addition, we have received support from experienced ship building countries like Britain and Norway.

Viet Nam has for the first time reached total export earnings of VND40 billion (US$2.5 billion) in 2006. What is behind this achievement?

Firstly, in terms of policy, the State has improved administrative procedures to facilitate businesses conducting export and import activities.

Secondly, Foreign Direct Investment (FDI) businesses have contributed a large part to the achievement by investing in producers and exporters.

Thirdly, the Government has helped businesses to enlarge their markets through promotional programmes. The most important thing, however, is that businesses have themselves striven to find new markets and boosted export activities.

What are the roles of foreign investors in boosting foreign trade?

We have created a good environment for them and have considered them Vietnamese enterprises.

Last year, the FDI sector accounted for 57.7 per cent of the total export revenue of the country, which is 23 per cent up on 2005. In addition to their large contribution to exports, they have helped create jobs and enriched the State through tax payments.

The revenue from import and export taxes, which makes up a large part of the State budget, will decrease after Viet Nam enters the World Trade Organisation (WTO). How can we deal with this situation?

The Government has promised to cut the average tax rate by 23 per cent over five to seven years. In the first five years of being a WTO’ member we will have an expected tax loss of VND1,000 billion (US$62.5 million). Therefore, we need to increase trading turnover to make up for this.

While trading turnover was US$69 billion in 2005, it was US$84 billion in 2006. In future, we need to have an increase of more than 20 per cent each year. Moreover, we will increase the State’s income from domestic sources such as income tax and business contributions.

What do you think about the trade situation now that Viet Nam has joined the WTO and been given the status of Permanent Normal Trade Relation (PNTR) with the US?

After Viet Nam joined the WTO and received PNTR status with the US, many giants have invested in the country. The scale of investment has increased from a maximum investment of US$100 million to $300 million, $400 million or even $1 billion thanks to those events.

That investment will continue to increase in the future.

This is the first year Viet Nam has benefited from WTO membership. As a result, export products will have more opportunities to reach new markets with lower taxes. This will serve to increase export turnover

Source: Vietnam News