Vietnam News Today (Dec. 21): Vietnam Rises to Become Seventh Largest Trading Partner to the US

Illustrative image. Photo: vneconomy.vn

Vietnam rises to become seventh largest trading partner to the US

Vietnam is on track this year to jump ahead of the UK and break into the United States’ top seven trading partners, according to information compiled by Bloomberg.

The news publication pointed out that this would be the first time the UK hasn’t been among the group since 2004.

The UK’s share of trade with the US declined by 2.6% during the first 10 months of the year, while Vietnam’s rose to 2.7%, according to details given by the Census Bureau data.

In terms of full-year numbers going back almost 20 years, the top seven US partners in terms of goods trading have consistently been Canada, Mexico, China, Japan, Germany, the Republic of Korea, and the UK, though positions within the group have shifted around.

Most notably, the country didn’t appear in the top-15 list until 2019, with a rapid climb seeing it end last year at 10th position. If Vietnam’s lead over the UK holds for the final two months of the year, then it will be the first time that a majority of the top seven are Asian economies.

According to economic experts, the nation’s new position highlights that the Vietnamese economy has secured a stronger foothold within the global supply chain.

Party leader attends national military-political conference 2022

Party General Secretary Nguyen Phu Trong, who is also Secretary of the Central Military Commission, on December 20 attended the national military-political conference in 2022 which reviewed the military and defence work in the year and sketched out orientations for implementing tasks in 2023.

The conference was chaired by Deputy Secretary of the Central Military Commission and Minister of Defense General Phan Van Giang.

The Party chief congratulated and applauded the Central Military Commission, the Defence Ministry and officers and soldiers of the whole army for achievements they made in 2022. He attributed the achievements to the leadership of the Party, the centralised and unified management of the State, and the close and effective coordination of ministries, sectors and localities.

He underlined the need to be proactive and sensitive, improve the research and forecast capacity, perform well the strategic consultation related to military and national defence, and take appropriate and effective measures to handle situations, especially those to early prevent risks of war and conflicts, and to address border and island issues.

The leader ordered the whole army to be aware of and strictly implement the policy on national defence, improve the effectiveness and efficiency of State management of national defence at all levels, and strengthen the whole-people defence, according to VNA.

Party General Secretary Nguyen Phu Trong (R) shakes hands with officers from the Ministry of National Defence. Photo: VNA

He asked for closer coordination between the military and ministries, sectors and localities to effectively implement strategies, plans, military and defence legal systems; and uphold the core role of army corps and economic - defence corps in socio-economic development in strategic areas along the land border line, sea and island areas, thus contributing to building a strong national defence posture and firmly defending national sovereignty over territory, borders, sea and islands.

The army must strictly maintain combat readiness; firmly manage and protect the airspace, sea, border, inland, and cyberspace; effectively respond to non-traditional security challenges and high-tech war; and improve the quality of training, drills, and scientific research, he said.

Regarding the implementation of Resolution No. 05-NQ/TW of the Politburo on the organisation of the Vietnam People's Army in the 2021-2030 period, General Secretary Trong said the process must be tight, resolute, and persistent with an appropriate roadmap because this is an important issue related to the ideological and policy work.

He also underlined the necessity to promote the application of achievements of the 4th Industrial Revolution and develop a modern defence industry towards becoming a spearhead of the national industry.

The Party chief also requested greater attention to Party building in the military, strongly innovating the leadership method, strictly implementing the Party's principles on organisation and operation, and strengthening the Party’s absolute and direct leadership in all aspects over the army.

EVFTA presents opportunities and challenges for exporters in 2023

Issues relating to labour, tariffs, and green export development remain challenges that export businesses must face when implementing the EU-Vietnam Free Trade Agreement (EVFTA).

During the past 11 months of the year, the export turnover to the EU market reached a total of US$43.5 billion, representing a rise of 21% over the same period from last year.

Many Vietnamese export items have therefore enjoyed impressive growth, such as iron and steel surging by 739%, cameras, camcorders and components climbing by 260%, and machinery and equipment up by 82.3%.

The nation was able to achieve these impressive results after the two-year enforcement of the EVFTA.

The opportunity to develop export growth in general and to the EU market in particular is not lacking for Vietnamese enterprises, although most observers recognize that challenges relating to the local economy mainly stem from the global economic influence. Indeed, the majority of Vietnamese partner markets face plenty of big difficulties.

The Covid-19 pandemic, the ongoing conflict in Ukraine, escalating energy prices, high inflation, as well as the tightening of monetary policy by central banks globally, are all factors causing many major economies to suffer, including the EU and the United States, with this impacting overall export growth.

Tran Quoc Manh, chairman of the Board of Directors of Saigon Trade Production Development Joint Stock Company (Sadaco), touched upon major barriers from the EVFTA that Vietnamese small and medium enterprises face.

Along with the main industries of textiles and garments, forest products, furniture, and footwear, it is imperative for items to meet conditions such as a voluntary partnership agreement licenses, forest and forestry governance, environmental - social - governance (ESG) standards, and CO2 emissions.

Recently, EU member states announced that they would implement the Carbon Border Adjustment Mechanism (CBAM) which levies a carbon tax on all goods exported to this market based on the intensity of greenhouse gas emissions in the production process in the host country in 2023.

In practice, this means that exporters must devise a solution to switch to net zero to ensure exports are able to continue in line with the terms of the trade deal, VOV reported.

According to Nguyen Thi Thu Trang, director of the Center for WTO and Integration under the Vietnam Chamber of Commerce and Industry (VCCI), along with meeting the EU's import conditions, local businesses must carefully learn about tariff-related issues moving forward.

Photo: VOV

For many years the EU has been maintaining the Generalized System of Preferences (GSP) for developing and least-developed countries, including Vietnam.

According to details set out in EU regulations on GSP when there is a free trade agreement (FTA), the nation will continue to enjoy the GSP mechanism in parallel with the EVFTA for a period of two years from the date of entry into force of the EVFTA, that is, until December 31.

However, from January 1, 2023, the GSP preferential tariff regime will automatically end, meaning that businesses will apply the preferential tariff regime under the EVFTA.

Therefore, exporters must fully understand all issues pertaining to preferential tariffs to take advantage of EVFTA's opportunities such as grasping regulations on origin, as well as monitoring the committed roadmap of products.

Furthermore, the problem of labour standards of the EU market in the EVFTA agreement also poses a challenge for businesses seeking to adapt.

Workers are at risk of losing their jobs due to low skill levels, although this is also an opportunity for local businesses to change themselves in order to have the opportunity to develop and enjoy the terms of the EVFTA.

The opportunity for Vietnamese workers will be to transfer training schemes and models.

As a means of implementing the EVFTA more effectively moving forward, the State must support and accompany businesses, thereby making the best use of demand from the bloc. This comes amid EU countries cutting production for some heavy industrial products and chemicals, fertilizer, steel, and food, thereby presenting an opportunity to boost the export of these items.

The Government should implement policies to support businesses more in terms of trade information regarding the EU market through developing a market information system, organizing trade promotion programmes, and strengthening market analysis, forecasting and research, as well as promulgating incentive policies for businesses.

This will help to support businesses directly and effectively participating in the supply chain, whilst it is necessary to strengthen the warning of regulations on barriers and problems which may arise in export activities, Trang added.

Christmas décor, gift market vibrant in Hanoi

Christmas decor accessories are plenty for sales on streets around Hanoi downtown as days are away from the festive festival.

In the evening, shops light up with a variety of décor items such as Christmas tree, tinsel, reindeer, flashing lights, laurel wreath, bauble, snow rope, candy canes, Santa's clothes.

Christmas decor accessories for sale at a shop. Photo: VNA

Fresh pine trees imported from Denmark, the Netherlands and China are also available. One that is more than 6m in height costs up to nearly 150 million VND (6,500 USD), exclusive of transport and decoration costs, cited VNA.

The price of a pine branch imported from China is between 170,000 VND and 200,000 VND while that from the Netherlands is about 250,000 – 300,000 VND. A bunch of 5-6 fresh pine branches from Denmark and the Netherlands is priced at a range of 1.8-2.2 million VND.

Christmas gifts and accessories are also sold well on e-commerce sites such as Lazada, Sendo, Shopee or social media pages Facebook, Zalo, with prices about 20% cheaper than those on traditional market.

ASEAN Music Festival 2022 opened in Hoi An City, Quang Nam province

The ASEAN Music Festival – 2022 was opened in Hoi An city, the central province of Quang Nam, on December 19 with the participation of 14 troupes from ASEAN countries.

The event, to last to December 24, is among the activities within the framework of the closing of the National Tourism Year - Quang Nam 2002 and those marking the 55th founding anniversary of ASEAN this year.

ASEAN Music Festival 2022 opened in Hoi An City, Quang Nam province: Opening night art show. Photo: Culture Newspaper

Performances by more than 200 artists are conveying a message of “United, Creative - Shining Together”.

Speaking at the opening ceremony, Vice Chairman of the provincial People’s Committee Tran Van Tan said that the event creates opportunities for the ASEAN countries to promote cultural exchange and mutual understanding, which contributes to building an ASEAN community of peace, co-operation, friendship, and development.

He said that the festival also helps promote the province’s tourism.

Quang Nam is home to two world cultural heritages - Hoi An Ancient town and My Son sanctuary, and a World Biosphere Reserve of Cu Lao Cham - Hoi An, cited VNA.

The province is also well-known for Bai Choi singing - an intangible cultural heritage.

It is a gateway connecting with countries in the Mekong Sub-region and ASEAN and part of the East-West economic corridor axis.

With the advantage of roads, waterways, and air routes linking it with other countries in the region, Quang Nam has become a tourist hub of Vietnam.

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