Vietnam's exports to ASEAN fall in Jan-Oct in worrying sign

By VnExpress   November 14, 2016 | 08:55 pm GMT+7
Vietnam's exports to ASEAN fall in Jan-Oct in worrying sign
A man loads steel at a port of Hoa Phat steel mill in Hai Duong Province, Vietnam June 14, 2016. Photo by Reuters/Kham

The formation of the $2.2 trillion ASEAN Economic Community seemed to be no help at all.

Vietnam saw a 7 percent decline in exports to other members of the Association of Southeast Asian Nations, also known as ASEAN, in the first 10 months, Thanh Nien newspaper has reported, citing customs statistics.

This trend was different from strong performances seen in other markets: shipments to the U.S. soared by 15 percent, the E.U. 4 percent, China 23.9 percent, and South Korea 29.1 percent.

Exports from Vietnam to its neighboring countries in the Southeast Asian region, a market of 600 million people, are mostly crude oil, rice and steel, but even these key products are struggling.

Vietnam, despite being recognized as one of the world’s largest rice exporters, has become less competitive in Southeast Asia because it has failed to improve the quality of the grain and to build a national brand name, said Pham Thai Binh, a rice exporter in the Mekong Delta city of Can Tho.

The country is traditionally more focused on quantity rather than quality, a strategy that has backfired, especially for rice exports, said Bui Huy Son, director of the Trade Promotion Department under the Ministry of Trade and Industry.

Vietnamese rice exporters are facing intense competition from Thailand and Myanmar, he added.

Local steel makers have also taken a hit as Chinese products have flooded regional markets. In response to anti-dumping measures by the U.S. and the E.U., Chinese steel exporters are shifting to ASEAN countries.

Steel exports from China to ASEAN have rivaled those from Vietnam, said Do Duy Thai, chief executive officer of a local steel company.

Besides, while ASEAN nations have removed or cut tariffs, major non-tariff barriers remain, said Le Thu Huong, an executive of rubber company Casumina.

She suggested that such technical trade barriers have contributed to the drop in Vietnam’s exports to ASEAN neighbors.

The ASEAN Economic Community was formally opened at the end of last year after a decade of preparation. But it may take at least several more years before the ambitious project can fulfill the goal of creating a unified regional market with free flows of goods, capital and labor.

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