The export outlook for 2024 anticipates positive signals. Photo: N.T

Utilizing opportunities from the FTAs

The 6% export growth target is forecasted to face many difficulties and challenges, as the export turnover in 2023 did not meet the set target.

According to the assessment of the MoIT, in 2023, despite the gradual reduction in the decline in exports in the second half of the year, the export situation has not fundamentally recovered compared to the same period last year, estimated at US$354.5 billion, a 4.6% decrease compared to the same period last year, not achieving the 6% growth target.

In 2024, external pressures on export activities are expected to come from three channels: the international trade channel, as many major economies, partners of Vietnam, are growing slowly, leading to a challenging overall demand recovery and affecting export results; the international investment channel, as the global interest rate remains generally high, making it difficult to attract capital for investment, putting pressure on retaining the already invested capital in Vietnam as well as attracting new investments; the financial and monetary channel, with the pressure of the devaluation of the domestic currency against the USD, while somewhat favorable for exports, will increase the cost of importing raw materials for production and increase the scale of foreign debt repayments.

However, according to the MoIT, along with effectively exploiting the existing FTAs, concluding negotiations, and implementing the FTAs with new markets such as Israel and the UAE will provide additional opportunities to boost trade, investment, and especially exports of Vietnam in 2024. Good and consolidated political relations with major partners such as China, the US, and the EU lay the groundwork for expanding economic, trade, and investment cooperation.

Many industries have set directions and export targets for 2024.

Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), stated that the overall textile and garment industry continued its recovery trend, with a gradual reduction in the value of exports in the second half of 2023, looking forward to a recovery in 2024, with a forecast of a "warm-up" market. The set goal and expectation for the total export turnover of the industry in 2024 are US$44 billion, an increase of 9.2% compared to 2023.

Do Xuan Lap, Chairman of the Vietnam Timber and Forest Product Association, forecasted that in 2024, the timber industry would still be in a situation with many uncertainties. Therefore, overall, the wood industry is predicted to grow slowly, but not significantly, about 10 - 12% compared to the last quarters of 2023. The most focal solution in 2024 is to create the image of sustainable development for the wood industry in Vietnam, based on the fundamental factor of using certified wood and reducing emission products.

Diversifying markets

The Import-Export Department (MoIT) stated that entering 2024, the global and domestic economic context had many more positive factors for import and export activities. The US Federal reserve system (FED) has given messages to stop raising interest rates and is considering reducing interest rates in 2024. The issue of high inventories in the US is gradually being resolved.

From a market perspective, according to the Europe-Americas Market Department, the existing FTAs with European and American market partners continue to have a positive impact, maintaining Vietnam's advantages in trade and investment activities. The global and regional market demand is gradually recovering as inflation has begun to trend down since the end of 2023.

Additionally, the continued efforts of developed countries to diversify supply sources, diversify supply chains, and diversify investments have helped Vietnam become an important production and export center in the global value chain. Countries in the Europe-Americas region are intensifying the development of green and digital economies, circular economies, opening up many new cooperation opportunities as well as providing a lot of credit and technology support to Vietnam. These are favorable conditions for import and export activities between Vietnam and the Europe-Americas region to recover positively.

However, according to the Import-Export Department, import and export activities in 2024 will still face many risks and uncertainties. The trend of trade protectionism will be increasing; many countries will have measures to bring investment back home, erect trade barriers to protect and promote their domestic production. Developed markets such as the EU that are focusing on sustainable development have already and are introducing many new regulations, such as carbon adjustment mechanisms, regulations against deforestation in Europe, impacting some key export items in Vietnam.

Therefore, to achieve the goal of recovering exports, aiming for about a 6% increase compared to 2023, it is necessary to focus on many solutions from the perspective of both management agencies and the business community. According to the Import-Export Department, in 2024, efforts will be concentrated on supporting businesses in utilizing commitments in the existing FTAs to boost exports, through promoting the rules of origin and issuing Certificates of Origin, opportunities, and ways to take advantage of opportunities from the Agreements. Enhancing market information supply activities on digital platforms for localities, industry associations, and businesses.

At the same time, building and deploying focused trade promotion activities, large-scale, regionally linked for products, industries with strengths in target markets; continuing to promote a quick and strong shift to mainstream trade. Simultaneously intensifying negotiations, signing new trade agreements, commitments, new trade links; supporting businesses in overcoming new trade barriers in target import markets.