Prior to the collapse of the Soviet Union, most of Vietnam's trade was with the former Soviet Union and Eastern European countries. Since 1991, the country's
|Trade (expressed in millions of US$): Vietnam|
|SOURCE: United Nations. Monthly Bulletin of Statistics (September 2000).|
trade has diversified significantly. It has also expanded dramatically, reflecting an internationalization of the Vietnamese economy. In 1999, exports plus imports divided by GDP reached the level of 84.5 percent, a useful indicator for the level of internationalization of an economy.
Though Vietnam has consistently had trade deficits , the amount has narrowed with the boom in Vietnamese exports. For example, in 1989 exports were only 73.7 percent of imports. In 1999, exports had risen to be 98.9 percent of imports. With the passage of the bilateral trade law with the United States in October 2001, and the granting of most-favored nation status to Vietnam, there is potential for Vietnam soon to become a net exporter with a positive trade balance.
In terms of value (stated in US$), Vietnam's leading exports from January to September 2000 were: crude oil (2,471.8 million); textiles and garments (1,355.4 million); marine products (1,017.7 million); rice (531.5 million); computers and computer parts (460 million); coffee (384.1 million); handicrafts (185.4 million); fruits and vegetables (149.4 million); pepper (137 million); and diverse other products (2,603.5 million). Leading imports for the same period were: machinery, equipment, and other small parts (1,793.6 million); petroleum products (1,472.4 million); textiles and leather materials (941.3 million); iron and steel (577.1 million); electronic parts (520.3 million); motorcycles and parts (478.3 million); fertilizers of all kinds (373 million); plastic products (359.8 million); fabrics (234.4 million); chemical products (225.1 million); and miscellaneous other imports (4,004.8 million).
In terms of trading partners, based on data for the same period Vietnam's leading export markets were: Japan (18 percent), China (9.7 percent), Australia (8 percent), Singapore (6.5 percent), the United States (5.3 percent), Taiwan (5.2 percent), Germany (5.0 percent), the Philippines (4.0 percent), the United Kingdom (3.4 percent), and the Netherlands (2.8 percent). These data clearly indicate how successful Vietnam has been in diversifying its export markets, which tends to minimize risk. In terms of imports, Vietnam purchased the most from the following countries: Singapore (18.8 percent), Japan (14.5 percent), Taiwan (12.4 percent), South Korea (11.6 percent), China (8.2 percent), Thailand (4.9 percent), Hong Kong (4.8 percent), the United States (2.6 percent), Malaysia (2.5 percent), and Indonesia (2.3 percent). Thus, in terms of trade deficit, Vietnam has the most important trade imbalances with Singapore, South Korea, Taiwan, Thailand, and Hong Kong. In terms of favorable trade balances, Vietnam is doing well with the United States, Germany, and the Philippines. Trade with Japan and China appears fairly balanced.
Despite Vietnam's trade expansion and its membership in ASEAN, the ASEAN Free Trade Area (AFTFA), and APEC, its trade regime remains restrictive by international standards. This policy is obviously a legacy of the system of central planning. With the final conclusion of the bilateral trade law with the United States in October, 2001, Vietnam is obliged to relax various economic restrictions and obstacles which should pave the way for Vietnam's entry to the World Trade Organization.
Related to Vietnam's balance of payments , the country was extremely fortunate to have Russia agree to forgive 85 percent of its US$11 billion debt, accumulated during the Soviet period. It is only necessary for Vietnam to pay Russia US$1.7 billion over the next 23 years with only 10 percent in hard currency , and the rest being commodities or other products. In 1999, Vietnam's total external debt was US$11.142 billion, according to the World Bank. Its debt service payments as a percent of its export earnings was a manageable 13.7 percent.