09:48 | 23/09/2016 Trade
(VEN) - The Free Trade Agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU including Belarus, Kazakhstan, Armenia and Kyrgyzstan) is scheduled to take effect this coming October. The largest market in the EAEU, Russia will open up great potential for increased trade exchange after the EAEU-Vietnam FTA becomes effective. In this light, Vietnam is accelerating the pace of trade promotion activities.
Growth momentum continues
According to the General Department of Customs, Vietnamese exports have recently faced numerous difficulties, with a number of export markets and export items declining. However, exports to Russia have maintained the growth momentum and many items robustly increasing in terms of revenue. The growth in the first seven months of this year reached about 20 percent against the same period last year.
Most export categories continued to increase in revenue during these months. Specifically, telephones and telephone accessories reached US$427.5 million, a 33 percent increase from a year ago, accounting for 47 percent of total exports to Russia. Following them were other traditional exports such as coffee reaching US$71 million, a 16.6 percent increase, accounting for 7.8 percent of total exports to this market; and footwear US$53.6 million, 36.7 percent and 5.9 percent, respectively.
The EAEU-Vietnam FTA is expected to take effect this coming October, offering great opportunities for Vietnamese exports to the EAEU including Russia. Almost 90 percent of the existing import tariff lines will be cut or reduced, of which 59.3 percent will be removed right after the FTA becomes effective.
According to the agreement, the two parties have committed to open their market involving 9,927 tariff lines. For this reason, a number of Vietnamese advantageous exports such as textiles and garments, agriculture, forestry and seafood, and leather and footwear will receive high preferences and opportunities to growth as a result of tax exemptions and reductions. For example, the current import tariff on seafood sales to Russia stands at about 35 percent. However, after the EAEU-Vietnam FTA takes effect, the market for 95 percent of items will be totally open during a maximum 10 years. In particular, 71 percent of the existing tariff lines will be entirely removed after the agreement takes effect, helping Vietnamese seafood sharpen the competitive edge.
Increasing trade promotion activities
A wide array of trade promotion measures took place in an aim to increase Vietnamese exports to Russia. Specifically, the first Vietnamese High-quality Products Fair was held in Moscow in November 2015 making it possible for Vietnamese companies to exhibit more than 100 tonnes of goods to Russia.
According to the organizing board, Lam Dong Province’s tea businesses had exported 350 tonnes of tea to Russia by the middle of this August. After selling 80 percent of their wood furniture at the fair, Binh Duong’s wood companies have shipped a large number of wood furniture containers to this market. Furthermore, after establishing offices in Russia, these companies have drawn-up plans to build factories here to make the most of abundant wood material resources.
The Vietnamese High-quality Products Fair will be launched again this year, plus a Hanoi Goods Week to be kicked off this September in Moscow, a Ho Chi Minh City Goods Week this coming October in Moscow, and an ASEAN Goods Week in November 2016 at the Hanoi-Moscow Complex, providing opportunities for Vietnamese businesses to seek partnerships.