VietNamNet Bridge – The European Chamber of Commerce (Eurocham) released a publication on trade issues and recommendations on November 27, in which they stressed the need for the Vietnamese government to boost exports in order to abolish the trade deficit and stimulate economic recovery.

“Inflation is no longer an issue for Vietnam ... what the government should do next year is to focus on exports to bring the trade deficit under control,” said Alain Cany, Eurocham Chairman at a press conference on the same day.

Under the Eurocham evaluation, inflation has experienced a significant decline in recent months thanks to the successful fiscal and monetary policies adopted by the government during the second quarter of the year. Although the trade deficit has been reduced and foreign currency reserves are healthy, a number of threats still remain on the horizon; not least of which is the global economic downturn, which will surely have a negative impact on Vietnam’s exports, foreign direct investment commitments and the monetary flow into the country.

Portfolio investment inflows and FDI next year are likely to be halved in comparison with the 60 billion USD attained during 2008, said the Chairman.

“If Vietnam wants to reduce its trade deficit, it needs to boost its exports. The government should pay attention to providing better support to exporters, especially the medium-sized companies in providing some specific financial support,” the Eurocham chairman said.

He also encouraged Vietnam’s exporters to improve their efficiency in order to make their goods cheaper than those provided by their international rivals.

“This gives an opportunity to Vietnam to grasp market share from some of the more expensive countries that produce the same commodities,” he said, adding that the Eurocham is not supporting the European Union’s decision on anti-dumping taxation imposed on Vietnamese leather-capped shoes “as we believe it is not right.”

In the book, Eurocham suggests that the government accelerate structural changes and liberalisation within the economy, assure the open trade and regulatory environment necessary for foreign investors and traders to enhance operations in Vietnam.

It also urged Vietnam to fully comply with WTO commitments, move ahead with the equitisation process, boost infrastructure investment and speed up legal and administrative reforms. By fulfilling these recommendations, “Vietnam can weather the present storm and continue to develop as one of Southeast Asia’s leading economies,” Cany said.

“Trade issues and recommendations” was published with assistance from the Asia-Invest Programme, which was launched in 1997 as an EU initiative to promote business cooperation between EU member states and Asia.

The booklet provides the Vietnamese government with recommendations in 13 areas, namely banking, supply of construction materials, branded consumer products, distribution, electrical efficiency and safety, fuel distribution, power, human resources, pharmaceuticals, tax, telecommunications, transport and logistics, and wine and spirits.