Electronics and machinery products are made of different components and parts, requiring full transparency regarding products origin in customs documents shown to the US authorities to avoid heavy punishment, according to Nestor Sherbey, expert at Global Alliance for Trade Facilitation (GTFA).
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In case of being included in the US blacklist, Vietnamese exporters would face difficulties tapping in other markets, he added.
Lee Hye Min, consultant at law firm Kim&Chang, said the US – China trade war would lead to US and Chinese goods flooding Vietnamese market, while local products exported to the US would be subject to close supervision of their origin.
Earlier this month, the US Commerce Department decided to impose import duties of over 400% on US-bound corrosion-resistant steel products and cold-rolled steel that were actually produced in South Korea and Taiwan before being shipped to Vietnam for minor processing.
Regarding the EU – Vietnam Free Trade Agreement (EVFTA), experts at the conference urged local enterprises, especially small and medium ones, to be prepared to face major challenges.
For example, in the textile industry, most of the production process must be in Vietnam. Vietnamese companies also have to import input materials from its free trade partners or the EU to gain the bloc's approval for its product origin.
In the long term, experts urged Vietnam to take advantage of current trade deals to reform, focusing on making products in Vietnam, and not just assembling.
Vu Thanh Tu Anh, director of the Fulbright Economics Teaching Program, said Vietnam’s current economic restructuring efforts are focused on reforms in the banking sector, public investment, and state sector.
However, from the US – China trade war perspective, the way forward is how to ensure Vietnam’s economy does not depend on external factors, but based on its internal strength, Anh stressed.
Moreover, Anh said the restructuring process must take into consideration recommendations from the local business community, which is the ultimate driving force for growth.
For its part, the government should draft regulations supporting the development of local enterprises, especially small and medium ones and innovation startups with high potential for growth.
