Worried about the invasion of Thai goods

Minister of Industry and Trade Tran Tuan Anh recently chaired a meeting with leaders of several relevant units in the Ministry to find the cause of the trade deficit with Thailand.

With 98% of tax lines on Thai goods to be reduced to zero from 2018, the fact that large retail corporations of this country have taken over a large proportion of the distribution chain and even the Vietnamese people's preference for Thai goods, the doors for goods from this country have almost been opened. So, what doors are left for Vietnamese goods?

According to the report of the Asia - Africa Market Department, in the first 8 months of 2017, the total import-export turnover between the two countries reached about 9.64 billion USD, of which, export turnover to Thailand reached about 3.07 billion USD, import turnover from Thailand reached 6.57 billion USD, Vietnam had a trade deficit with Thailand of 3.5 billion USD, an increase of 15.6% compared to the same period in 2016.

The five largest import groups are household electrical appliances and components (646 million USD), fruits and vegetables (618 million USD), complete automobiles (432 million USD), petroleum of all kinds (406 million USD), raw plastics (403 million USD), and auto parts and components (340 million USD).

Thai retail giants have acquired many supermarket chains in Vietnam and continue to expand.

Many products have been produced domestically, but businesses still import them from Thailand, such as electrical and electronic household goods and components, vegetables, computers, plastic products, iron and steel, household products such as detergents, cosmetics, kitchen utensils, interior products, etc.

For fruits and vegetables, in 2016, Vietnam imported 410 million USD (accounting for 44.3% of Vietnam's total fruit and vegetable import turnover from the world, 10 times higher than Vietnam's fruit and vegetable export turnover to Thailand in 2016).

Vietnam imports many kinds of fruits and vegetables from Thailand, such as: beans, mushrooms, durian, strawberries, rambutan, grapefruit, longan, mangosteen, jackfruit, tamarind, plum, apricot, mango, avocado, guava, dates, grapefruit, oranges, coconut, cashew nuts... while Thailand has only licensed dragon fruit, lychee and longan from Vietnam. In the first 8 months of 2017, fruit and vegetable imports from Thailand reached 618 million USD.

Implementing the tax reduction roadmap as committed in ATIGA, Vietnam has eliminated import tax on approximately 90% of total tax lines on Thai goods, and will eliminate tax on 98% of tax lines by 2018.

Along with that, Thailand has established a solid distribution channel and is continuing to expand in Vietnam with the presence of the country's leading retail corporations Central Group, TCC Group - names that have acquired Metro, Big C... and continue to have expansion plans. The channels to bring Thai goods into Vietnam have almost been completely cleared, even in terms of consumer psychology, because Vietnamese people are quite fond of Thai goods.

The Ministry of Industry and Trade believes that due to its financial potential, the Thai Government has allocated a large budget for the large-scale and effective implementation of trade promotion activities in the Vietnamese market.

The bigger problem is that Vietnam itself still has a large import demand for Thai goods as inputs for production (accounting for up to 50% of total import turnover), including: machinery, equipment, spare parts; petroleum of all kinds; raw plastics; chemicals; textile and footwear materials; fabrics of all kinds; paper of all kinds; textile fibers and yarns of all kinds; animal feed and raw materials...

Investment expansion activities of Thai enterprises in Vietnam also lead to an increase in trade deficit.

Faced with this situation, Minister of Industry and Trade Tran Tuan Anh requested that units must comprehensively investigate the reasons why Vietnam has a trade deficit with Thailand, while goods from other countries in the region such as Malaysia and Indonesia are also subject to similar policies.

Comparing "it cannot be like football, where every time we see Thailand we lose", Mr. Tran Tuan Anh said that we need to improve our competitiveness, otherwise in the coming period we will miss opportunities like the period since joining ASEAN until now.

According to People's Police