How to encourage businesses to boost trade promotion

This year, the State has allocated VND80 billion to trade promotion programmes, a two-fold increase over last year’s figure. However, the funding for businesses to promote trade activities remains a major obstacle.

For example, the State approved VND1.1 billion to boost this year’s wood exports but the figure is modest and incommensurate with the yearly wood export turnover of USD3 billion on average.

According to economic experts, with the Government’s open-door policy, potential businesses are keen on seeking new markets on their own and this will become a popular trend in the years ahead.

Thai Hoang Hai, Deputy General Director of the Que Bang Shoes Production Commercial Joint Stock Company, complains about businesses’ unprofessional skills in trade promotion activities, citing that many businesses have signed contracts worth millions of USD but no one knows how effectively the contracts have implemented. In addition, trade promotion activities related to various products belonging to different sectors have failed to entice foreign partners.

Diep Thanh Kiet, vice chairman of the Vietnam Footwear Association says that if businesses want to stay long in Japan, they must attend at least five fairs in the market. Mr Kiet suggests that the State point out key markets and make promotion plans for each specific one. This will help prevent businesses from launching promotion campaigns inefficiently.

Many trade promotion programmes were carried out noisily but inefficiently. Businesses who access markets for the first time do not have enough time to find partners. Businesses need specific partners, however, programmes currently focus on seminars and conferences.

Le Van Tri, deputy general director of the Southern Rubber Joint Stock Company says that businesses should be active in their promotion activities and establish ties with overseas trade offices which are an effective channel that has not been fully tapped. If the State focuses on new markets it should consider facing trade barriers. It is a fact that it takes a lot of time and money for businesses to penetrate a new market, but when its products gain a firm foothold they are faced with technical barriers and anti-dumping lawsuits.

To make each trade promotion programme effective, the association should improve their role by controlling all export contracts and memoranda of understanding signed during fairs and treat them as a valuable tool to keep track of businesses.

A representative from the Ministry of Industry and Trade says that starting in 2010 the ministry will evaluate each association’s capacity to approve funding for their programmes. It hopes that this will make trade promotion activities more practical and effective.