Directive No. 47/2004/CT-TTg on measures to enhance the competitiveness of export industrial products

 DIRECTIVE

On measures to enhance the competitiveness of

export industrial products

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Implementing the five-year plan from 2001 to 2005, the country's export activities in general and those of industrial products in particular have achieved remarkable results. Export turnover has consistently maintained a higher growth rate each year compared to the previous year; the value of exported goods has increased very rapidly; exports have increasingly contributed positively to annual GDP growth, with a notable contribution from industrial production exports over recent years.

To successfully achieve the goals set forth in the Resolution of the Ninth National Party Congress, there remain many challenges facing the country's export activities in general and the export of industrial goods in particular. In terms of exporting industrial goods, some weaknesses have been revealed such as a low proportion of processed and manufactured products compared to many countries in the region; low added value and competitive capacity for many products; limited variety of product types, with a focus on goods restricted by quotas... In the context of deeper international economic integration and fiercer competition in the global market, the ability to compete has become one of the decisive factors for the success or failure of enterprises when venturing into foreign markets. Meanwhile, Vietnam's competitive advantages in industrial goods based on cheap labor and abundant natural resources are rapidly declining. Therefore, the urgent requirement is to quickly and actively seek out and propose new, appropriate solutions and policies to enhance the competitive capacity of exported goods, particularly high-potential industrial products for export.

To enhance the competitiveness of high-potential industrial export products, the Prime Minister requests that ministries, sectors, provincial People's Committees under the central government (hereinafter referred to as provinces), industrial production and import-export enterprises, and related agencies thoroughly understand and implement the following tasks:

1. Implement comprehensive measures to comprehensively enhance the competitive capacity of industrial export products across all aspects including production capacity, product structure, price, quality, distribution methods...

a) Ministry of Industry:

- Continue to direct the acceleration of the restructuring of industrial product structures. Fully exploit the production and export capacity of products with competitive advantages such as ready-made garments, shoes and sandals, while prioritizing the development of products with significant export potential and high added value such as machinery manufacturing (motorcycles, bicycles, power units, agricultural machinery, shipbuilding and repair...), electrical equipment, electronic devices - computers, information technology software, plastic products, wooden products, processed food... to form new leading export products. Restructure the export structure of industrial goods towards increasing processed and manufactured products, focusing on those with high technological and knowledge content. Strive to increase the proportion of industrial export goods that have been processed and manufactured in total export turnover from the current 50% to 70-75% by 2010. At the same time, pay attention to exploiting goods that use local raw materials and employ a large number of workers such as processing of agricultural, forestry, and aquatic products, handicrafts...

- Directly guide state-owned corporations, companies, and business associations to accelerate the implementation of programs to reduce production costs, increase labor productivity, lower product prices, and strive for Vietnamese industrial products to have cost parity or be lower than similar products in the region.

- Take the lead and coordinate with relevant ministries and sectors to identify industrial products with high export potential during each period, based on which direct state-owned corporations, companies, and industry business associations to develop production, business, and export strategies suitable for the trend of world and regional economic development and integration from now until 2010.

- Based on the developed export strategy, direct state-owned corporations and business associations to develop targeted export programs and projects, clearly defining competitive export products, target markets, and competitive methods. Targeted export programs and projects, once approved by competent authorities and put into operation, will be supported by the state through preferential policies on investment, finance, credit, land...

- Vigorously apply scientific and technological progress and management systems such as quality management systems (ISO 9000), environmental management systems (ISO 14000)... in production and business to improve product quality, establish reputation, brand, and product labels. Conduct assessments of the technological level of industries, especially those with high export potential, and propose measures to raise the overall technological level of the industry.

- Vigorously implement reforms in state-owned enterprises; reorganize loss-making and ineffective enterprises; innovate management methods to enhance the competitive capacity of industrial enterprises.

b) Ministry of Planning and Investment:

- Take the lead and review existing mechanisms and policies, combining them with proposals for new mechanisms and policies to encourage investment, production, and export of goods, with a focus on industrial goods, and report to the Government in the first quarter of 2005.

- Take the lead and coordinate with the Ministry of Finance, the State Bank of Vietnam, and the Development Support Fund to allocate state credit plans for production and export programs and projects; ensure that domestic enterprises producing and supplying raw materials for export also enjoy the same benefits as export production enterprises.

- To take the lead and coordinate with the Ministry of Industry and relevant ministries and sectors to enhance the attraction of foreign direct investment in the industrial sector, prioritizing investment in high-export-potential manufacturing industries, modern technology applications, wholesale and retail distribution sectors, thereby gradually integrating domestic enterprises into production-marketing-distribution stages of global multinational corporations.

c) Ministry of Finance:

- To take the lead in researching and building mechanisms for export insurance and the proposal for establishing an Export-Import Bank dedicated to providing credit and guarantees for export-import activities, including high-export-potential industrial products, to be submitted to the Prime Minister in the first quarter of 2005.

- To research and propose to the Government mechanisms for forming sources of capital to support development and application of advanced technology and techniques in industrial production, sources of capital to support training of highly qualified human resources to meet the requirements of production development and science and technology.

- To take the lead and coordinate with the Ministries of Posts and Telecommunications, Transport and localities responsible for directing the review of various fees, studying and accelerating the reduction of telecommunication tariffs, port fees, wharfage charges, etc., aiming to reduce production and business costs, increase product competitiveness, so that by the end of 2004, they will be at the level of countries in the region.

- To study and propose adjustments to import tax reductions, abolish price differential collection systems, and minimum pricing for raw materials for production that are not yet produced domestically or cannot meet domestic demand. Continue and further improve customs procedures, simplify tax payment and refund processes, and customs inspection procedures. Strengthen and regulate post-inspection work after tax and customs operations; increase the number of exported goods exempt from inspection to shorten the time and cost of customs procedures to match those of countries in the region.

d) The State Bank of Vietnam:

- To direct commercial banks to continue improving mortgage lending procedures, creating favorable conditions for businesses, especially those producing export-oriented industrial products, to access capital for investment, production, technological innovation, and human resource training; particularly to promote medium- and long-term loans for export-oriented projects and programs.

- To coordinate with the Ministry of Finance to complete and diversify banking financial services to meet the needs of businesses.

đ) The Ministry of Posts and Telecommunications:

- To develop a plan to enhance competitiveness and promote exports of electronic, information technology, and telecommunications products, to be submitted to the Prime Minister in the first quarter of 2005.

- To take the lead in directing the application of information technology in production and business activities, particularly in import-export operations.

e) The Ministry of Science and Technology:

- To strengthen and effectively utilize the National Science and Technology Development Fund to support enterprises and research units in applying scientific and technological progress in production, especially in export-oriented production and production of raw materials and components for industrial goods.

- To intensify and improve the effectiveness of standardization work, including the establishment of national quality standards for imported raw materials, semi-finished and finished products, and export goods, harmonizing standards with international systems and practices.

- To organize guidance, management, and simplification of trademark, brand registration procedures, industrial property rights, and product quality standards. Guide enterprises to implement brand registration and comply with intellectual property protection laws in export markets.

g) The Ministry of Education and Training: to take the lead and coordinate with relevant ministries and sectors to research, build, and implement programs to support enterprise training and retraining of highly disciplined and specialized personnel to meet the requirements of international economic integration, especially the need for personnel in high-export-potential industrial sectors.

h) The Ministry of Labor, Invalids, and Social Affairs: to strengthen labor inspection, supervision, and legal education to help workers and Vietnamese enterprises meet international customer labor standards.

i) People's Committees of provinces and centrally governed cities:

- Based on approved socio-economic development plans, to build and publicize land use plans, urban development plans, industrial park development plans, raw material regions, including considering the development of high-tech zones to attract investment in high-tech industries. Pay special attention to allocating land for small and medium-sized industrial clusters, supporting the relocation of production facilities causing pollution within city centers or those required to relocate. Publicly announce compensation and land clearance policies before implementing investment projects.

- To coordinate with the Ministry of Industry, relevant ministries and sectors, and enterprises to organize research and review, based on selecting competitive industrial products with high export potential, to adjust and supplement local socio-economic development strategies and land use plans; establish appropriate mechanisms and policies to encourage and create favorable conditions for business production and operation activities in the locality.

- To strengthen internal regional connections and between economic regions on the principle of mutual support and complementarity to avoid overlapping, duplication, or unhealthy competition among localities, between local enterprises and central enterprises and other economic sectors.

k) The Support Development Fund shall be responsible for proposing favorable conditions for enterprises to develop production and business of export goods based on government export credit support according to the policy of encouraging export goods.

2. Focus on developing supporting industries to enhance the ability to supply raw materials, semi-finished products, and auxiliary materials domestically for the production of exported industrial goods and promote complementary inter-industry relationships among industries, increasing autonomy in raw material inputs to minimize external impacts, reduce production costs, and increase added value for exported products:

a) Ministry of Industry:

- Take the lead and coordinate with relevant ministries, sectors, and localities to build a proposal for developing supporting industries, including proposals for preferential mechanisms and policies to support the development of supporting industries to submit to the Government for decision-making in the second quarter of 2005. The proposal will focus on developing industries producing raw and auxiliary materials for the textile and garment industry, leather and shoe industry; manufacturing spare parts and components for the mechanical manufacturing and electrical-electronic equipment industry, etc., and must be consistent with the development plans of each industry and locality.

- Direct state-owned corporations, companies, and business associations to study and build proposals for establishing production and trading centers for raw and auxiliary materials serving the production of exported goods, focusing initially on key export industries such as textiles and garments, leather and shoes, processed agricultural, forestry, and marine products, located in major production and business centers like Ho Chi Minh City, Hanoi, Binh Duong, Dong Nai, etc.

- Coordinate with the Ministry of Agriculture and Rural Development to build, complete, and implement planning for developing raw material regions serving industrial production on the principle of harmonizing the interests of farmers, businesses, and the State.

b) Ministries of Planning and Investment, Finance, Trade, and specialized ministries: Study and build and perfect mechanisms and policies regarding the import of raw materials for production and export, ensuring the principle of creating favorable conditions for importing raw materials that cannot be produced domestically or whose production does not meet quantity and quality requirements (such as tax exemptions, simplifying procedures, etc.), and limiting the importation of products that can be produced domestically and meet national and international standards. Ministries should research and issue lists of raw materials allowed for importation and those eligible for preferential imports to serve production during each period.

3. Strengthen and improve the effectiveness of market work and trade promotion services for exporting industrial goods:

a) Ministry of Trade:

- Take the lead and coordinate with the Ministry of Industry and related ministries and sectors to continue researching and perfecting mechanisms and policies to support and create favorable conditions for enterprises to increase export turnover. By February 2005, complete the timely update and publication of a list of industrial products eligible for export awards and preferential export credit, prioritizing more products with high export turnover growth rates, high manufacturing content, and high added value.

- Strengthen and rapidly develop domestic distribution enterprises to link production with circulation, establish systems of general agents and distributors to serve enterprises producing goods for regional and global markets; at the same time, support enterprises in establishing connections with reputable foreign distribution groups to sell their products.

- Enhance the effectiveness of international trade activities, take measures to expand and diversify export markets, and promote the application and development of e-commerce. Special attention should be paid to ensuring market work and trade promotion activities align with the development strategies and plans of each industry and the entire industrial sector, especially key trade promotion programs and large projects for export development. Strengthen and improve the effectiveness of participation in overseas trade fairs and exhibitions. Annually, every six months, organize evaluations of the effectiveness and lessons learned from trade promotion activities for industrial products. Promote economic integration internationally, including promoting bilateral and multilateral negotiations to create legal frameworks and open markets for Vietnam's export goods. Implement the project to research and compile statistics on international trade barriers against Vietnam's exported industrial products and research and build technical barriers of Vietnam against imported goods, to be submitted to the Government in the first quarter of 2005. Pay special attention to solutions to overcome foreign barriers, particularly for key exported industrial products, and develop response plans and promptly address any trade disputes arising with Vietnam's exported goods.

- Improve market information work, enhancing forecasting capabilities regarding demand, prices, as well as legal regulations and barriers in export markets. Expand market information channels down to enterprises to fulfill the role of providing information, consulting, and supporting enterprises (through the establishment of Market Consulting Centers, building market information websites, through mass media, publishing publications, etc.).

- Continue to research and expand networks of trade promotion centers for industrial products in major and potential markets. Consolidate and enhance the role and effectiveness of the system of overseas commercial representative offices (trade missions) of Vietnam.

- Continue to research and expand the network of trade promotion centers for industrial products in major markets and markets with great potential. Consolidate and enhance the role and effectiveness of the operations of the system of overseas representative trade offices (trade missions) of Vietnam abroad.

- Coordinate with relevant ministries and sectors to strengthen market management work, combat commercial fraud, illegal production and sale of counterfeit goods; strictly handle according to the provisions of the law all violations and commercial fraud to protect the legitimate and rightful interests of enterprises.

b) Ministry of Industry:

- Coordinate with the Ministry of Trade and related ministries and sectors, direct state-owned corporations, companies, and businesses producing and exporting industrial products to develop export market strategies, clearly identifying target markets for each product type at different stages, characteristics, and market entry barriers; focus on training and developing a professional team capable of market work and trade promotion; actively seek, collect, analyze, and process market information, including legal systems, business customs, market features, prices...

- Direct enterprises to proactively study, build, and participate in key trade promotion projects, brand-building projects for products; promote trade through activities such as participating in trade fairs, building websites, promotional forms, introducing enterprises and products, establishing representative offices and product introduction centers abroad, initially focusing on key markets like the United States, EU, Japan, ASEAN, Russia... the state budget will allocate a portion to support the establishment of these centers.

- Coordinate with related ministries and sectors to encourage and create conditions for enterprises to establish and join domestic industry associations; build mechanisms to support domestic business associations in joining international associations or negotiation forms to ensure the rights of Vietnamese exporters in the global market.

c) Ministry of Foreign Affairs:

- Direct diplomatic agencies abroad to proactively provide timely information about markets, laws, and business customs in various countries to domestic enterprises, business associations, localities; support enterprises in establishing economic and trade relations and implementing trade promotion, investment activities, and other cooperation activities with foreign countries.

- Coordinate with the Ministries of Planning and Investment, Trade, Industry, and other specialized management ministries, the Vietnam Chamber of Commerce and Industry in organizing trade promotion and investment delegations abroad; coordinate with the Ministry of Public Security to facilitate enterprises in entry-exit procedures to promote trade and investment promotion work.

d) Vietnam Chamber of Commerce and Industry: coordinate with the Ministry of Trade and the Ministry of Foreign Affairs to enhance and improve the effectiveness of trade promotion work, market information provision; protect the legitimate and rightful interests of Vietnamese enterprises; promote harmonious labor relations in enterprises; improve and ensure the accuracy, transparency in issuing certificates of origin (C/O) for exported goods.

4. Other measures:

- Enhance the quality and effectiveness of import-export statistics work. The Ministry of Finance directs the General Department of Customs to conduct detailed statistics on turnover and markets for industrial export products and imported raw materials, industrial products with annual turnover of one million US dollars or more. These trade statistics data are provided to the Ministries of Planning and Investment, Trade, Industry, and the General Statistics Office on a monthly, quarterly, and annual basis to serve statistical purposes, product and market orientation, and the formulation of import-export mechanisms and policies.

- The State Bank of Vietnam takes the lead, coordinating with the Ministry of Finance and related ministries and sectors to monitor and manage exchange rates under a flexible floating mechanism, contributing to promoting exports and controlling imports; study and promulgate regulations to facilitate enterprises in implementing financial risk insurance such as forward transactions, swaps, and currency options, interest rate options.

- Ministries, sectors, and localities need to regularly organize meetings and exchanges of opinions with enterprises and business associations; compile enterprise recommendations and difficulties to resolve within their authority or report to the Prime Minister for decision.

The Prime Minister requests ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, provincial People's Council Chairmen, enterprise managers, and heads of related units and agencies to fully implement the tasks outlined in this Directive.