Search for new markets, aligning production and increasing quality control are three key pillars on which Vietnam will battle increasing protectionism, while ensuring economic growth and prosperity for the country. These three building blocks were mentioned by Vietnam’s Prime Minister (PM) Nguyen Xuan Phuoc at a conference at the end of April, in Hanoi.
In the first quarter of 2018, Vietnam’s total import-export turnover reached more than $107 billion USD, an increase of 17.7% compared to the same period in 2017. Exports in this period were slightly higher, at $54.3 billion, compared to $53 billion of imports, leaving Vietnam with a $1.3 billion trade surplus. Despite these positive results, Vietnam is still facing certain challenges, including the rise of protectionism in certain countries. As Vietnam’s economy is highly dependent on exports, protectionism could directly hamper its economic progress.
PM’s three-step plan
- Search for new markets
It can be argued that Vietnam is already doing a good job when it comes to creating trade ties with a myriad of countries. Vietnam has signed multilateral and bilateral FTAs with more than 50 countries (map of Vietnam’s FTA in 2016).
- Aligning production in accordance with market demands
According to the PM, Vietnam will have to align production in order to avoid oversupply.
“Before you produce a product, you need to know who you’re selling it to. We need to produce what other markets need, not what they already have”.
- Quality control
Vietnam will need to tighten quality control on all manufactured products that are destined for foreign markets. With the rising quality standards in foreign countries, Vietnam will have to pay great attention on product quality, especially when it comes to agricultural items.
Will this plan be another step that will ensure Vietnam becoming the fastest growing economy among the world’s 32 largest by 2050?