Minister of Industry and Trade Nguyen Hong Dien chairs a meeting on promoting exports in the new normal

Effect of Russia-Ukraine tensions

Given the complicated developments of the Covid-19 pandemic in many countries around the world, escalating geopolitical tensions between Russia and Ukraine and fiercer competition in trade, the launch of stimulus packages has put great pressure on inflation. In addition, shortages of strategic materials (petroleum, gas, coal and semiconductors) have posed difficulties for production.

Due to the early grasp of the situation, Minister Dien directed Vietnamese trade offices abroad to advise the government on measures to overcome export difficulties, especially concerning Russia and other relevant markets.

The imposition of sanctions on Russia, mainly focusing on finance-banking, government bonds and energy and technology exports, will pose difficulties for trade and investment cooperation between Russia and Vietnam, greatly affecting bilateral trade.

Minister of Agriculture and Rural Development Le Minh Hoan said that although Russia and Ukraine are not key Vietnamese export markets, they are buyers of agricultural commodities. As Vietnam and Russia are both members of the Vietnam-Eurasian Economic Union Free Trade Agreement, conflicts and embargoes will slow down Vietnam’s exports to Russia in particular and other relevant markets in general, Hoan said, adding that payments will also be affected by stagnant financial transactions.

Minister Dien said tensions between Russia and Ukraine are affecting the world economic situation, including Vietnam. On a global scale, the difficulties caused by the pandemic and the conflicts between Russia and Ukraine have been disrupting supplies of some strategic commodities, such as petroleum, gas, food and foodstuff, as well as causing logistical difficulties. In addition, rising global inflation has been eroding consumers’ purchasing power.

Seafood is among Vietnam’s main exports to Russia

Monitoring export markets’ situation

Minister Dien asked that ministry units propose measures to overcome difficulties and provide support for export businesses. He said the European-American Market Department needs to work closely with Vietnamese trade offices abroad to keep up-to-date with information about politics and diplomacy, as well as changes in economic, trade and investment policies of other countries.

The units need to closely monitor price fluctuations of strategic commodities, promote effective exploitation of free trade agreements to which Vietnam is a signatory, diversify export-import markets and ensure smooth circulation of goods and services, while strengthening administrative reforms and devising measures to facilitate trade, Minister Dien said.

He suggested the Ministry of Agriculture and Rural Development closely coordinate assessments and forecasts with the Ministry of Industry and Trade in order to stabilize production and ensure sufficient supply of goods for the domestic market, and promote agro-fishery exports to traditional and new markets. He also suggested that ministries, departments and localities create favorable conditions for production, circulation and distribution of goods, and that the State Bank of Vietnam guide Vietnamese export businesses on changes in payment methods and risk prevention in contracting with partners.

Phuong Lan