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Pact oils the wheels in farm trade

Update: May, 04/2013 - 09:58

Ministry of Trade and Industry Asia-Pacific Department deputy head Dao Ngoc Chuong spoke to Tuoi Tre (Youth) newspaper about co-operation in the trade of agricultural products between Viet Nam and China.

What are the specific agreements between the Ministry of Trade and Industry and China's Ministry of Commerce?

We have agreed five measures to boost agricultural product trading between the two countries. Specifically, our Chinese partner will continue to create favourable conditions for Vietnamese enterprises and business associations to attend famous trade fairs in China. They will also actively support Viet Nam's establishment of five commercial representative offices in five provinces of the country. We have also proposed and agreed to periodically organise conferences reviewing the management of border trading and cracking down on illegal activities. Products traded through the border are mainly farm produce and fruits.

The MoU is a preparatory step for us to boost exports to China. Since 2001, our trade deficit with them has been increasing. Last year the trade gap between us was worth US$16.3 billion and more than 85 per cent of the imports from China are input materials. This balance needs to change, and the MoU will hopefully facilitate that.

Many Vietnamese companies complain that they face difficulties when exporting goods via border gates. What do you think about it?

Both Viet Nam and China are currently members of the World Trade Organisation. The price of goods must be regulated by market mechanisms, reflecting the situation of supply and demand. Vietnamese firms are often placed in a disadvantaged position compared with Chinese partners because they have not found long-term wholesalers. For example, in the harvest season farm produce is abundant but quickly becomes rotten, thus their prices are often forced to be lowered as they have a limited time in which to sell and no long-term partner in place.

However, under the MoU, China has committed to prioritising Viet Nam's legal agricultural exports.

Are there any other specific measures to ensure that Vietnamese companies can sell products at high prices?

We can help enterprises only by building a legal framework. If Vietnamese firms are to foster exports to China, they should have a strategy to access the market and seek big partners.

They should also more actively attend trade exhibitions in China, giving them access to big wholesalers, distributors and importers. This will give them opportunities to sign contracts and directly export to them, instead of only selling to small-sized partners along the border.

The demand of the Chinese market is considerably great but Vietnamese companies have not been good at choosing partners.

Besides increasing agricultural exports, what will the country do to reduce the trade deficit with China?

There are two basic solutions. Firstly, we are attracting investment in producing exports to replace imports. So far, the market share of domestically-produced commodities such as steel, iron, and building materials has been increasing, satisfying local demand. Before, we had to totally import crude oil and cement, but now, we can export them. We will reduce our dependence on imports and promote our activeness in production.

Secondly, we will encourage Chinese companies to invest in Vietnamese factories to process fresh and raw goods which are being exported to China. — VNS


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