Vietnam is trying to achieve a trade balance by 2020, Minister of Industry and Trade Vu Huy Hoang told the public via the Government web portal chinhphu.vn.
“It will require great efforts from both the Government and businesses to translate that goal in reality,” Hoang has said.
Last year, the Balance of Trade improved considerably, with the trade deficit dropping from 30 percent in 2007 to nearly 10percent, or around US$9.9 billion, Hoang said.
“The trade deficit cannot be reduced overnight as Vietnam mainly imports machinery, equipment and materials that account for up to 80 percent of the total import bill.”
Non-essential and consumer goods make up only 7 percent of all imports.
Since the domestic mechanical engineering industry is not strong enough and supporting industries have not developed, the trade deficit certainly remains an issue that cannot be solved any time soon.
The minister said it would be impossible to strike a balance between imports and exports by 2015 as Vietnam is still boosting investments to ratchet up its manufacturing capacity and has to continue import equipment, machinery and materials.
The competitiveness of Vietnamese products in the local market is still low.
Therefore, tariff reductions in line with the World Trade Organization (WTO) and free trade agreements (FTA) the country will sign in the future will cause import demand to surge, which may become a major barrier to a Balance of Trade improvement.
“A balance between imports and exports may be achieved in 2019-2020,” Hoang said. However, he expected the target could be attained sooner.
Vietnam’s export revenue amounted to $96.3 billion last year, up 33 percent from the previous year, with $54.5 billion coming from the foreign-invested sector.
The export figure for this year is projected to reach US$108 billion, and to achieve this, the ministry will take measures to shore up exports, he said.
The measures include helping the corporate sector cope with current woes, gain easier access to capital, boost trade promotions, and expand markets.
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