Vietnam Narrows Trade Deficit with Thailand: A Positive Yet Cautious Trend

In the first half of 2024, a significant highlight in bilateral trade between Vietnam and Thailand is the reduction in Vietnam's trade deficit with Thailand compared to the same period in 2023. However, this decrease has not yet reached a sustainable level.

Trade Overview

According to the Vietnam Trade Office in Thailand, as of the end of May 2024, the total import-export turnover between Vietnam and Thailand reached $7.78 billion, a slight decrease of 1.67% compared to the $7.91 billion in the same period in 2023. Vietnam's trade deficit with Thailand in the first five months of 2024 was $1.32 billion, a notable reduction from $1.81 billion in the same period in 2023.

Export Performance

Vietnam's export value to Thailand in the first five months of 2024 reached $3.23 billion, an increase of 8.7% compared to the same period in 2023. Key export items included: phones and components, computers, electronic products and components, machinery, equipment, tools, spare parts, transportation vehicles and parts, crude oil, and chemical products.

Products with strong export growth included petroleum (up over 1107%), glass and glass products (up over 962.3%), coal (up 665.4%), chemical products (up 231.7%), ores and other minerals (up 206%), and plastic products (up 158.1%).

Import Performance

In contrast, imports from Thailand in the first five months of 2024 reached $4.55 billion, a decrease of 6.4% compared to the same period in 2023. Major import items included computers, electronic products and components, household electrical appliances and components, machinery, equipment, tools, spare parts, automobiles and parts, common metals, and raw plastic materials.

Compared to the first five months of 2023, Vietnam increased imports of animal feed and raw materials (up 100.4%), ores and other minerals (up 88.5%), liquefied gas (up 51.8%), pharmaceuticals (up 47.5%), and common metals (up 44.9%), while decreasing imports of petroleum (down 61.9%), fertilizers (down 43.4%), and complete automobiles (down 41.9%).

Sustainable Export Strategies

Vietnam Trade Counselor Lê Hữu Phúc commented that in 2024, Vietnam-Thailand trade relations will continue to be significantly impacted by the global economic situation, experiencing stagnation as many major markets face recession risks, leading to decreased purchasing power and stalling economic and production activities.

To achieve sustainable exports to the Thai market, Mr. Lê Hữu Phúc emphasized the need to expedite the implementation of signed agreements, especially those from the 4th session of the Joint Trade Committee (JTC).

• Focus on commitments to market access, gradually eliminating trade barriers related to technical standards and quarantine measures.

• Enhance exchanges at all levels to review and promptly address trade barriers and difficulties in import-export activities between the two countries, streamline processes, and create favorable conditions for business operations.

• Push for market access for more Vietnamese products, especially key export items such as food and beverages, consumer goods, and industrial products.

• Monitor and gather information, assess Thailand’s economic development policies, particularly in trade, energy industry, and investment sectors, to support preparations for the upcoming Joint Cabinet meeting between Vietnam and Thailand, scheduled for August 2024. Prepare content for the 5th session of the Joint Trade Committee (JTC), expected in Q3 2024.

Trade Promotion and Market Development

Intensify trade promotion activities and market development according to supply chain connection orientations, including supporting Vietnamese businesses in finding and building agents, introducing and accessing Thai supermarkets for Vietnamese products.

Strengthen local economic cooperation, especially between Northeastern Thailand, where a large number of Vietnamese expatriates live, and Central Vietnam provinces. Facilitate market access for local products under Thailand’s OTOP program and Vietnam’s OCOP program.

Seek opportunities to connect businesses from both sides in areas such as green economy development, digital economy, circular economy, and renewable energy.

Conclusion

While there is progress in reducing the trade deficit with Thailand, sustaining this improvement requires concerted efforts to implement agreements, address trade barriers, and promote market access. Continued trade promotion and cooperation in new economic areas will be crucial for enhancing Vietnam-Thailand trade relations.