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FOREIGN TRADE UNIVERSITYDEPARTMENT OF INTERNATIONAL TRADEINTERNATIONAL TRADE POLICIESTOPIC: International Trade Policies of Vietnam on agriculture section during Covid-19, on both exports and imports.Instructor: Mrs. Nguyen Thu Hang Class ID: TMAE301(1+2/2021)CLC.Group members: Phạm Đức Trung 191115...

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FOREIGN TRADE UNIVERSITY DEPARTMENT OF INTERNATIONAL TRADE

INTERNATIONAL TRADE POLICIES TOPIC: International Trade Policies of Vietnam on agriculture section during Covid-19, on both exports and imports. Instructor: Mrs. Nguyen Thu Hang Class ID: TMAE301(1+2.2/2021)CLC.1 Group members: Phạm Đức Trung Nguyễn Duy Minh Hiển Tô Bình Phạm Nhật Huy

1911150567 1911150502 1911150709 1911150533

Hà Nội – 03/2021

TABLE OF CONTENTS I.

INTRODUCTION:.......................................................................................................... 3

II. ABSTRACT:......................................................................................................................5 1. Brief overview of the agricultural commodity market in Vietnam in the preemergence period of COVID-19:.........................................................................................5 2.

The impact of the epidemic on international trade in general:................................ 5

3. The impact of the epidemic on the international trade of agricultural commodities in Vietnam, on both importing and exporting section:...............................6 III.

THE POLICIES ON EXPORTING AGRICULTURAL GOODS IN 2020:.............9

1.

Overview of the export situation in Vietnam in 2020:................................................9

2.

New important export promoting policies in the epidemic era:..............................12

3.

The impact and effectiveness of exporting policies:..........................................13

IV.

THE POLICIES ON IMPORTING AGRICULTURAL GOODS IN 2020:...........13

1.

Overview of the export situation in Vietnam in 2020:..............................................13

a.

Importing policies for agriculture products to serve medic purposes:............13

b.

Importing policies for agriculture products for food use:................................14

2.

New important import promoting policies in the epidemic era:.............................14

a.

Vietnam promotes agricultural imports from the United States:....................15

b.

Vietnam promotes agricultural imports from China:.......................................16

V.

The impact and effectiveness of the policies:................................................................18 1.

The impact and effectiveness of exporting policies:..................................................18

2.

The impact and effectiveness of importing policies:.................................................18

3.

Interaction of import and export policies with each other:.....................................18

VI.

CONCLUSION:...........................................................................................................20

1.

Summary:.....................................................................................................................20

2.

Existing difficulties:.....................................................................................................21

3.

Feasible approaches:............................................................................................22

REFERENCES........................................................................................................................23

2

I.

INTRODUCTION: The new COVID-19 pandemic has impacted all of humankind at an

unimaginable scale. However, depending on our position as people and as members of society, the pandemic's influence and effects are felt differently. Although some people strive to adjust to working online and homeschooling their children, others are expected to be infected in order to keep society functioning. Our various social identities and the social classes to which we belong determine our social inclusion and, as a result, our susceptibility to epidemics.

For the world, the food industry is one of the sectors most heavily affected, in the negative direction. The pandemic has had an effect on the entire food system, exposing its vulnerability. Farmers and agricultural workers have been unable to enter markets, including to buy inputs and sell their produce, due to border closures, trade barriers, and confinement measures, disrupting domestic and foreign food supply chains and limiting access to healthy, safe, and diverse diets. The pandemic has wiped out jobs and put millions of people's livelihoods in jeopardy. Millions of women and men's food security and nutrition are jeopardized as breadwinners lose employment, fall ill, and die, with those in low-income countries, especially the most vulnerable communities, such as small-scale farmers and indigenous peoples, being the hardest hit.

Although feeding the planet, millions of agricultural workers – both salaried and self-employed – face high levels of working poverty, malnutrition, and poor health, as well as a lack of safety and labor rights, as well as other acts of harm. Many of them are compelled to continue working, often in hazardous conditions, due to low and unstable wages and a lack of social support, thus exposing themselves and their families to additional risks. Furthermore, when faced with a loss of income, they can turn to negative coping strategies such as asset distress sales, payday loans, or child labor. Providing better wages and insurance to all agri3

food staff – from primary producers to those involved in food manufacturing, transportation, and retail, including street food

vendors – would be vital to saving lives and preserving public health, livelihoods, and food security.

With all these above obstacles, it is obvious that government must take action to support the agricultural industry. As a group of students in the Economics department of the Foreign Trade University, we recognize the difficulties the global economy faces during the pandemic, as well as the challenges that international trade must confront, especially when it comes to agricultural trade. Therefore, we are making this report with the aim of learning about the trade policies that the Vietnamese government has applied to the agricultural sector during this difficult time, on both the import and export section. Not only that, this report will analyze the positive impact those policies have on, then give recommendations aligned with the future direction of the government.

The research will be built on the foundation of government information sources alongside the domestic and foreign economic magazines. After collecting all the necessary information, we will make the following objective assessments: The policies on exporting agricultural goods in 2020, The policies on importing agricultural goods in 2020, in which we will study the policies by their direction, the highlighted policies, then, The impact and effectiveness of the policies to study about the effects of the policies and interaction between import and export section. Finally, to the Conclusion, we will indicate the existing difficulties as well as offer solutions towards overcoming the obstacles brought by the epidemic.

Despite our best efforts at research and analysis on the subject, we are only able to address the issues on a very basic level due to time constraints and limited 4

knowledge. With limited information, there will be several flaws; the writers hope to receive Ms. Nguyen Thu Hang's feedback in order to improve the following reports.

Our sincere appreciation.

5

II.

ABSTRACT:

1. Brief overview of the agricultural commodity market in Vietnam in the pre-emergence period of COVID-19:

According to the report delivered at the conference held by the Ministry of Agriculture and Rural Development in Hanoi on December 23. Despite difficulties and challenges such as the impacts of trade wars between major countries and African swine fever, Vietnam earned 41,3 billion USD from agricultural exports in 2019 which is an increase of 3.2 percent from 2018. The achievements are due to the sector’s prompt control of diseases in cattle and poultry production. On the other hand, total import value of agri-forestry-fishery products declined by 1.6 percent to 30.9 billion USD in 2019, resulting in a trade surplus of 10.4 billion USD. Vietnam agricultural commodity market in Vietnam in the pre-emergence period of COVID-19 was a huge potential market with an increasingly growing pace.

2. The impact of the epidemic on international trade in general:

Import and export trends for some of the world’s major trading economies further illustrate how trade patterns changed during 2020. In the first half of 2020, all major economies experienced significant downturns in both imports and exports of goods, with even heavier declines in the trade of services. Although improvements have been seen from lows earlier in the year, the value of trade remained lower for nearly all major economies in the third quarter of 2020 than in the same quarter of the previous year. Growth of around 3 per cent in Chinese goods exports was the exception to this trend. In the fourth quarter of 2020, while trade in goods ameliorated substantially across many major economies, trade in services, in contrast, remained below averages. Notably, exports of services from China, and to a lesser extent India, appear to have fared relatively better than other major economies throughout 2020. 6

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3. The impact of the epidemic on the international trade of agricultural commodities in Vietnam, on both importing and exporting section:

According to World Bank (WB) senior advisor Hardwick Tchale, COVID-19 has broken many agricultural supply chains, rising food prices, including rice prices. In some countries such as the sharp increase in food prices such as Argentina by 39%, Myanmar by 30% ... this is a great disadvantage for these countries but it is an opportunity for exporting countries food, agricultural products like Vietnam.

8

Despite a difficult year in the context of the COVID-19 pandemic, complicated developments of animal diseases, climate change, in 2020, the agriculture and rural

development sector has achieved an impressive export turnover of USD 41.25 billion, an increase of 1.6% over 2019.

On the afternoon of December 24, reporting to Prime Minister Nguyen Xuan Phuc at the Conference on reviewing work in 2020, implementing the plan for 2021, Minister of Agriculture and Rural Development Nguyen Xuan Cuong emphasized:

“In the difficult situation, agriculture continues to assert itself as the pillar of the economy. In terms of cultivation, the crop structure has changed more effectively. Promoting intensive farming and the application of science and technology, especially for key crops. Focusing on improving the plant variety structure, controlling and increasing the rate of using new and high quality varieties”.

The rice output in 2020 will reach 42.7 million tons, fully meeting the needs of domestic consumption, processing and use as animal feed and export. The proportion of high-quality rice accounts for over 85% of export rice, raising the average export rice price from USD 440/ton in 2019 to USD 496/ton in 2020.

“Vegetables and beans increase both in acreage and output. The area of about 1.16 million hectares (ha); production reached 18.2 million tons, an increase of 458,000 tons compared to 2019. The area of fruit trees reached 1.1 million hectares, an increase of 40,000 hectares compared to 2019 "- Minister Nguyen Xuan Cuong said.

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In terms of husbandry, there has been a clear change in production organization, farming on farms, family farms, focusing on chains, biosafety. Meat output of all kinds reached about 5.37 million tons, an increase of 3.5% compared to 2019; fresh milk reached over 1.1 million tons, an increase of 12.9%; 14.15 billion eggs, an increase of 6.6%.

The seafood industry develops sustainably in both farming and capture production and is being restructured. Total fisheries output reached over 8.4 million tons, an increase of 3.6% compared to 2019; of which over 3.84 million tons of catch, increased by 3.2%, over 4.56 million tons of farming, increased by 3.9%.

Regarding forestry, forest development continues to be concerned and directed by the Ministry and localities to promote planting, tending, zoning for regeneration of forests and improving the quality of planted forests. The country has prepared nearly 850 million seedlings of all kinds for afforestation; newly concentrated planted forest area reached 220,000 ha, reaching the set plan. The policy of payment for forest environment services is effective and plays an important role in forest protection and development. In 2020, revenue from forest environmental services would reach VND 2,457.8 billion.

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III.

THE POLICIES ON EXPORTING AGRICULTURAL GOODS IN 2020:

1. Overview of the export situation in Vietnam in 2020:

In 2020, in the context of the world economy being heavily affected by the Covid-19 pandemic, the global economy fell into the worst recession since the Great Depression 1929 - 1933, causing a serious crisis. in terms of employment, unemployment, social security and its impact on the global economic, political and social order, exports of regional countries all decreased compared to the previous year, but Vietnam's exports still reached. With positive growth, export turnover is estimated at nearly 282.5 billion USD, up to 6.5% compared to 2019. The agricultural sector achieved export turnover 37.4 billion USD, 2.9% higher in comparison at the same time of last year.

The export growth rate of Vietnam in 12 months of 2020

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DETAIL: In the first 11 months of 2020, the export value of the agricultural products group decreased by 0.5%; animal husbandry decreased by 18.5%; Fishery decreased by 0.9%; Particularly, the group of forest products increased by 15% over the same period in 2019. According to the Department of Agro-Processing and Market Development, the export turnover of agricultural, forestry and fishery products in November 2020 is estimated at $ 3.72 billion. Accumulated total export value of 11 months of 2020 reaches 37.4 billion USD, up 2.3% as compared to the same period in 2019. The total value of agricultural, forestry and fishery imports in the first 11 months of 2020 is nearly 28.06 billion USD. decreased by 0.2% over the same period in 2019. The trade surplus of the whole agriculture, forestry and fishery sector continued to rise, reaching over 9.3 billion USD in 11 months. This was not only due to export growth, but also reduction in imports. The result of focusing in exporting wood and forest products has the most credit in the situation of exporting of Vietnam in 2020.

Rice products are the next candidate for the growth of agriculture. In November 2020, 388 thousand tons of rice were exported, bringing in $ 207 million, bringing the total volume and value of rice exports in 11 months to 5.74 million tons and $ 2.85 billion, down 2.2%. in volume, but up 10.4% in value over the same period in 2019. Currently, the Philippines ranks first in Vietnam's rice export market with 32.9% market share; down 4.3% in volume but up 8.4% in value. Export increased strongly in the following markets: Indonesia increased by 3.1 times; China, up 79.2%. The average export rice price reached 493.3 USD / ton, up 12.7% over the same period in 2019. Regarding the types of exports, white rice export value accounted for 40.3% of the total turnover; jasmine rice and fragrant rice accounted for 37.7%; sticky rice accounts for 17.6%; japonica rice and Japanese seed made up 4.2%. The largest white rice export markets of Vietnam are the Philippines (54.5%), Malaysia (13.4%) and Cuba (8.8%). With jasmine rice and 12

fragrant rice, the largest export markets are the Philippines (26.4%), Ghana (21.2%) and Côte d'Ivoire (14.8%). With sticky rice, major export markets are China (accounting for 72.4%), Indonesia (accounting for 8.0%) and the

Philippines (accounting for 7.0%). With japonica rice and Japanese seed rice, Vietnam's largest export markets are Kiribati (17.5%), Solomon Islands (15.7%) and China (6.9%). By the end of the year, the country's rice exports reached 6.2 million tons, down 1.9% in volume compared to the previous year, but due to the increase in the average export unit price, the value increased by 11.2%, reaching 3, 12 billion USD. In particular, the amount of rice exported to the Chinese market increased sharply by 70%, with 811 thousand tons; and exported to the leading market in the Philippines with 2.2 million tons; a slight increase of 4% over the same period last year.

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Production and export value of rice in the first 5 months of 2020

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2. New important export promoting policies in the epidemic era:

An important reason for the growth of Vietnam’s agricultural export in 2020 is the effects of EVFTA (EU – VIETNAM trade and investment agreements). The agreement removed tariffs, simplified import and export procedures and created opportunities for Vietnam's agricultural market to have a chance to penetrate deeper into the EU. After 1 month of operation from July, in August, rice exporting enterprises benefited greatly because the tax rate of this item was about 0%. As a result, rice export prices have increased from 80 to 200 USD / ton compared to the time before EVFTA took effect. Estimated, in August 2020, the export turnover of agricultural, forestry and fishery products to the EU market reached 350 USD, up 17% compared to the previous month. Besides Vietnam's agricultural products, many other products such as textiles, footwear, seafood, and wood products ... are also having great expectations for an increase in exports to the EU when EVFTA comes into effect, in the context of export. In general, we are facing many difficulties.

Agriculture export turnover chart 2020 (from vneconomy.com)

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3. The impact and effectiveness of exporting policies:

The achievements in Vietnam's agricultural export development in 2020 have been achieved by the resilience of the Vietnamese government as well as appropriate sectoral development policies. In addition, the EVFTA agreement has contributed a great part to the mission of exporting Vietnamese agricultural goods in 2020 when making the EU market the third country in export turnover, after China and the US.

IV.

THE POLICIES ON IMPORTING AGRICULTURAL GOODS IN 2020:

1. Overview of the export situation in Vietnam in 2020:

Based on Official Document 2756/TCHQ-GSQL 2020, the policy importation of agricultural products through borders can be made according to the following regulations.

a. Importing policies for agriculture products to serve medic purposes: The import of medicinal herbs shall comply with the Government's Decree No. 54/2017 / ND-CP dated May 8, 2017, detailing a number of articles on Pharmacy Law. Accordingly, when importing, in addition to the customs dossier as regulated, the enterprise must submit other specialized documents as prescribed in Clause 3, Article 92 of this Decree (in case medicinal herbs have not been registered for circulation at In Vietnam, the enterprise must present the import license issued by the Ministry of Health to obtain goods clearance).

The list of goods being medicin...