Posts Tagged ‘Vietnam’

JOC Insights by Mario Moreno: Furniture Imports Expand

February 5, 2013

U.S. imports of furniture jumped 13.4% Y-o-Y in October 2012, marking its 16th straight monthly advance and totaling $3.8 billion in constant dollars. Through October, imports were up by 12.2%, in line with a rebounding housing market.

China is by far the largest source of U.S. furniture (HS code 94) imports, accounting for a 51.5% share in 2011 according to ITC estimates. A great number of U.S. furniture makers had to shut down operations over the years as they saw production and jobs being transferred to China to take advantage of lower wages and costs. In fact, back in October 2003, a concerted coalition of furniture makers and unions petitioned the International Trade Commission for money repairs, arguing China was dumping furniture into the U.S. market (Drayse, 2008). A duty on Chinese furniture was later imposed; however, furniture shipments from China to the U.S. continued rising.

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This outsourcing trend bolstered China’s share of U.S. furniture imports significantly from 29.3 % in 2001 to 52.8 % in 2010. Nevertheless, China’s share declined in 2011 and in 2012 year to date according to U.S. International Trade Commission figures, while the share of Mexico and Vietnam rose in those same years. Mexico’s share of U.S. furniture imports increased from 14.9% in 2010 to 15.8% in 2011 to 17.6% in 2012 through October.

In 2012, through October, imports from China in constant dollars were up by 9.8 %, but imports from Mexico, Vietnam and India were up by double-digit growth rates. In terms of volume I see a similar pattern, with containerized shipments from China nearly flat this year while shipments from Vietnam and India were up by double-digit growth rates.

More of Moreno’s trade and economic analysis can be by subscribing to JOC Insights or by following him on Twitter @MarioMoreno_JoC.

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Shrimp Tales

January 8, 2013

Q1 - Q3_2012_U.S._Shrimp_Imports

Over 80% of shrimp consumed in the United  States is imported, a drastic change from just 20 years ago!

Gulf shrimpers seek relief from foreign, subsidized shrimp imports by seeking the implementation of duties to offset the unfair trade advantage. Petitions were filed with the federal government by the Coalition of Gulf Shrimp Industries December 28th, 2012, which seek duties imposed to shrimp from:

  • China
  • Ecuador
  • India
  • Indonesia
  • Malaysia
  • Thailand
  • Vietnam

The petitions document numerous programs benefiting shrimp producers in these seven countries; Thai government purchasing domestic shrimp and processing it at artificially low prices, the Indian government helping to reduce shrimper processors’ ocean freight costs with added subsidies specifically for exports to U.S. markets and the Malaysian government investing millions of dollars to build shrimp farms and processing facilities to target various export markets.

Based on PIERS data, approximately 204,360 MTONs of shrimp were imported from these seven countries during the first three quarters of 2012; with the top share among Thailand (32.48%), Ecuador (18.81%) and Indonesia (14.13%). The coalition maintains that the countries covered by the petitions exported $4.3 billion worth of shrimp to the U.S. in 2011, accounting for 85% of imports.

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ASEAN Leaders Begin RCEP Negotiations

December 6, 2012

ASEAN RCEP Nations

The leaders of the Association of Southeast Asian Nations (ASEAN) have succeeded in persuading their top trading partners to start negotiations on the Regional Comprehensive Economic Partnership (RCEP) to create the world’s largest trading bloc. Consisting of a 10-member regional group and their six major trading partners, this trading bloc will potentially transform the region into an integrated market of more than three billion people with a combined GDP of $15 trillion, roughly equal to that of the United States. ASEAN includes Thailand, Laos, Cambodia, Vietnam, Indonesia, Malaysia, Singapore, Philippines, Myanmar, and Brunei, RCEP adds the nations of India, Japan, South Korea, China, New Zealand and Australia.

This partnership of 16 countries comprises about half of the world’s population in the part of the world that is experiencing the greatest economic growth; 30% of global GDP. RCEP would “rewrap” five current free trade agreements (FTAs) with ASEAN’s six major trading partners, China, Japan, India, South Korea, Australia and New Zealand into an integrated regional economic pact. The hope is this will allow deeper economic cooperation than the existing FTA agreements and ultimately lower trade barriers and custom duties across the region by the end of 2015. It is predicted that the repositioning of the financial heart of Asia will turn towards Singapore, and for businesses to branch out from there to other RCEP investments as per the needs of each business.

Based on iPIERS data, U.S. exports to ASEAN countries has continued to increase during 2009 – 2011; a total of 5,749,798 TEUs in 2011, 2,580,235 of those TEUs being exported to China.

US Exports to ASEAN Countires

U.S. imports from ASEAN countries grew by 15%  from 2009 to 2010, but remained flat in 2011. A total of 11,956,944 TEUs were imported into the U.S. in 2011, with 8,494,239 imported from China.

US Imports from ASEAN Countires

World economic recovery efforts continue to be a challenge with the volatile global financial and economic situation. East Asian economies, which rely on trade with developed nations, have been jeopardized by the European and American economies as regional economic integration has become a better choice of ASEAN and its dialogue partners. In an effort to not exclude Trans-Pacific Partnership (TPP), the U.S. – ASEAN Expanded Economic Engagement initiative was launched. It is aimed at expanding trade and investment ties with the U.S. and smoothing a path for the Trans-Pacific Partnership, which excludes China.

Will competition arise from the two agreements, causing a split among the ASEAN members? Join the conversation on FacebookTwitter or LinkedIn!

Decrease in China’s Toy Market Share

November 29, 2012

China may be considered the workshop of the world; with the combination of a large manufacturing base, relatively low labor costs and numerous support policies have made China an extremely attractive option for international business. With 1.3 billion people, cheap labor in China seemed unlimited at a time.

US Toy Imports Q3 2012

Despite its rapid growth in recent decades, many of the advantages that have fueled the expansion of Chinese manufacturing are beginning to deteriorate. Labor and raw material costs in China have seen a steady increase and many commodity-type goods can no longer be competitively sourced from China, such as toys. With Chinese wages rising at about 17% per year and the value of the Yuan continuing to increase, the gap between U.S. and Chinese wages is narrowing rapidly; increasing costs even before inventory and shipping costs are considered.

In a recent article in The Journal of Commerce, PIERS data showed China’s toy imports to the U.S. declined from an 82.4% market share in 2011, to 81.2% in 2012, while the next largest importer, Hong Kong experienced similar decline with its market share slipping to 6.5% from 6.9% a year earlier.

Meanwhile it seems China and Hong Kong’s decline in market share has been spread across a number of much smaller toy exporters.  The next largest source of toy imports after China and Hong Kong is Vietnam, which increased its market share position by .2% from 1.3% to 1.5%, which translates to 765 TEUs. Similarly, Germany increased their market share by .4% to 1.1% and showed the most significant increase in terms of import volume with an increase of 1,315 TEUs over the same period last year.

PIERS/JOC, Economist, Mario Moreno, offers a possible explanation for the recent shift in production, “Labor supply in labor-intensive industries is very tight, which has prompted many owners to move their (Chinese) factories inland, but even then they are still struggling to find enough workers for their export production activities. Many owners have relocated their shops to Vietnam in order to lessen their labor supply problems in China.”

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