ACADEMY OF POLICY AND DEVELOPMENT INTERNATIONAL SCHOOL OF ECONOMIC AND FINANCE GRADUATE INTERN REPORT Topic: “Solutions to enhance handicraft export activity to US market of Thuy Anh Co.” Teacher : Phạm Mỹ Hằng Phương Student : Hoàng Thị Mai Oanh Code : 5063106024 Class : 6.1 Hà Nội, June 6/2019 PREFACE To complete this graduation internship report, I have received enthusiastic guidance and help from teachers in the School of Policy and Development. First of all, I would like to thank the teachers who have devotedly taught me during my studies at the School of Policy and Development! I would like to express my deep gratitude to the teachers in the International Training Department, in particular, Ms. Pham My Hang Phuong has dedicated and supported me so I can finish this graduation thesis. At the same time, I would also like to express my sincere thanks to the members of Thuy Anh Co.
for helping me during the internship. Thanks to the internship and instructions of the teacher and the company's staff, I can do this final thesis. Although I tried to perfect my graduation thesis, due to limited knowledge and experience, I could not avoid errors. Therefore, I look forward to receiving comments from teachers.
Thank you! Hanoi, 20th March, 2019 Student Hoàng Thị Mai Oanh INTRODUCTION 1. Back ground In the process of industrialization and modernization of the country, Vietnam has determined that exports are a breakthrough in economic restructuring, contributing to the successful implementation of the commune economic objectives. Assembly Over the past years, exports of handicraft goods have brought great benefits not only in economic terms but also in culture and society, contributing to changing the appearance of rural Vietnam. Handicraft products are the crystallization of physical and spiritual labor, it is created by talented hands and creativity of craftsmen with national cultural values from products.
Handicraft goods are no longer merely goods but they become cultural products with high art. Some are considered symbols of national cultural traditions. Export of handicraft goods has both high economic efficiency and take advantage of available resources, create jobs and stable income for a large number of rural laborers and contribute to preserving and promoting cultural and social values, preserving traditional skills. Over the past years, Vietnam has achieved some encouraging results in producing and exporting handicraft goods, gradually building prestige and brand in the international market.
America is an important economic partner of Vietnam in recent years, especially after Vietnam joined the World Trade Organization (WTO) and negotiated the Strategic Economic Partnership Agreement across Thai Binh. Vietnam's export turnover to the US market has continuously increased in recent years. In particular, handicraft items are one of Vietnam's key products exported to the US market. Over the past few years, a number of businesses have focused on investment in manufacturing handicrafts for export and have achieved some remarkable successes.
In which, there is a significant contribution of Thuy Anh Co. America is considered by the company as a potential 1 market. However, the export turnover of handicraft products of the company to the US market is small, not really commensurate with the potential of exporting handicrafts of the company. Therefore, I chose the topic: "Solution to promote the export of handicraft items to the US market of Thuy Anh Co." as the research topic for my graduation thesis.
Research objective - Research Question: How are export situations and what are the solutions to US handicraft market of Thuy Anh Co., Ltd? - General Objectives: The topic of analyzing and evaluating the export of handicraft products and proposing solutions to boost the export of handicraft products of Thuy Anh Co. Research object - Company: Thuy Anh Co., Ltd - Action: Export 4. Research Scope - Time limited: 2015 - 2018 5. Research methods - Literature Review - Data Analysis - Descriptive qualitative research 6.
Research Structure External Introduction and Conclusion, the topic has been organized into 3 chapters Chapter 1: LITERATURE REVIEW Chapter 2: EXXPORT ACTIVITIES OF THUY ANH CO., LTD Chapter 3: EVALUATION AND RECOMMENDATIONS 2 CHAPTER 1: LITERATURE REVIEW 1.1 Overview of Export and Import 1.1 Some definitions Export definition According to master Troy Segal from Harvard College, the concept of export (updated Apr 14, 2019 on Investopedia) is defined as follows: “Export is a function of international trade whereby goods produced in one country are shipped to another country for future sale or trade. Exports are a crucial component of a country’s economy, as the sale of such goods adds to the producing nation's gross output”. According to the Commercial Law 2005, the concept of export is defined as follows: “Export of goods means that the goods are taken out of the territory of Vietnam or brought into a special area in the territory of Vietnam, it is considered a zone separate customs area in accordance with the law”. In this thesis, I understand export in international trade is a good or service produced in one country that is bought by someone in another country.
Export of goods often requires involvement of customs authorities. Exports, along with imports, are a key element in a country’s trade balance as the sale of exported goods increases a nation’s gross output. Many countries encourage exports as a way to increase employment, disposable income, and consumer spending. Furthermore, the more products a country exports, the greater the competitive advantage as it gains expertise in producing goods and services that foreign countries want to use.
Import definition According to master Troy Segal from Harvard College, the concept of export (updated Apr 30, 2019 on Investopedia) is defined as follows: “Import is 3 a good or service brought into one country from another. The word "import" derives from the word "port" since goods are often shipped via boat to foreign countries. Along with exports, imports form the backbone of international trade. If the value of a country's imports exceeds the value of its exports, the country has a negative balance of trade (BOT), also known as a trade deficit”.
According to the Commercial Law 2005, the concept of import is defined as follows: “Import of goods means that the goods are brought into the territory of Vietnam from foreign countries or from a special area located in the territory of Vietnam which is considered a separate customs area in accordance with the law.” In this thesis, I understand an import is a good brought into a jurisdiction, especially across a national border, from an external source. The party bringing in the good is called an importer. An import in the receiving country is an export from the sending country. Imports, along with exports, are a key element in a country’s balance of trade as the lower the value of imports, the more positive the balance of trade in Import.
Countries that have high import levels face a trade deficit, and they need to increase their reserves to pay for the imported goods. Furthermore, there are countries, mostly in the under-developed or the developing economies, which rely on imports of basic commodities, such as oil and industrial materials. Generally, countries tend to import goods or services that they cannot produce at the same low cost or with the same efficiency that other countries can. Importation and exportation are the defining financial transactions of international trade.
In international trade, the importation and exportation of goods are limited by import quotas and mandates from the customs authority. The importing and exporting jurisdictions may impose a tariff (tax) on the goods. 4 In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions. Definition of export promotion As Wikipedia, the concept of Trade promotion is defined as follows “Trade promotion is an umbrella term for economic policies, development interventions and private initiatives aimed at improving the trade performance of an economic area.
Such an economic area can include just one country, a region within a country, or a group of countries involved in an economic trade area. Specific industries may be targeted. Improvement is mainly sought by increasing exports both in absolute terms and relative to imports. When specific industries are targeted, trade promotion policies tend to target industries that have a comparative advantage over their foreign competitors.
Trade promotion can also include expanding the supply of key inputs in a country's strongest industries, via import expansion. If successful, such a tactic would lead to pro-trade biased growth”. As an economic policy with the ultimate goal of increasing domestic welfare, trade promotion comprises a large set of policy instruments. One notable tactic is the provision of trade intelligence to domestic enterprises in order to reduce transaction costs and provide them with a competitive advantage vis-à-vis foreign companies.
Many countries all over the world have set up special agencies, most of them in the public domain, to implement trade promotion policies and provide support services to domestic enterprises. Some international organizations provide assistance to so-called developing countries to help them promote their exports, most prominently the International Trade Centre in Geneva, which is a subsidiary of the World 5 Trade Organization and the United Nations with a mandate to providing trade- related technical assistance to those countries.2 Export forms Direct export Direct export methods in international trade can be done anytime, anywhere. Buyers and sellers directly meet (or via correspondence, telegrams .) to agree on goods, prices, transaction conditions, payment methods. without going through intermediaries.
Buyers and sellers are often based in different countries. The payment currency may be a foreign currency for either party, the goods are the object of the transaction, being moved across the border of a country. Advantages of direct export: - A direct discussion is easy to lead to unity, less misunderstanding. - Reduce intermediate costs.
- Conditions to penetrate the market, promptly receive customers' opinions, overcome shortcomings. - Proactive in the process of production and consumption of goods Limitations of direct export operations: - The surprise in the new market - The company is often forced to reduce prices while selling - The volume of goods that need to be traded, must be large to pay expenses such as papers, travel expenses, investigation fees to understand the market Entrusted export In trust export - a form of intermediary trading, the relationship between the seller and the buyer and the terms and conditions of the sale must be through a 6 third party. This third party is called a middleman. The popular intermediaries in the world market are agents and brokers.
The use of commercial intermediaries (agents and brokers) has the same benefits: - The intermediaries often have a clear understanding of the local market, law and culture situation, so they are able to promote trade and avoid risk to the trustee. - The intermediaries, in particular, agents often have stable facilities, so when hiring them, the mandate helps to invest directly abroad. - Thanks to intermediary services in the selection, sorting, packaging, mandators can reduce transportation costs. However, the use of intermediaries has disadvantages such as: Import-export trading company loses direct contact with the market; Companies also often have to meet agency or broker policies; Profit sharing.
Counter-trade Counter-trade is a method of exchanging goods, exporting activities in a way that closely integrates with imports, the seller is also the buyer, the amount of goods delivered is worth commensurate with the quantity received. The purpose of export is not to collect foreign currency, but to collect another commodity of equivalent value. Counter- trade has long appeared in the history of goods- currency relations, in which the earliest "barter". There are many types of counter-trade such as: barter, compensation, counter- purchase, offset, buy-backs.