EEUV-FTA brings hopes for sectors

11:00 | 27/07/2015 Trade

(VEN) - Businesses have great expectations for increasing exports to Russia, especially after the Eurasian Economic Union-Vietnam Free Trade Agreement (EEUV-FTA) signed on May 29 takes effect.

EEUV-FTA brings hopes for sectors

Garments and textiles are expected to especially benefit. Vietnam National Textile and Garment Group (Vinatex) General Director Le Tien Truong said that Russia annually imports around US$11 billion in garments and textiles. Vietnamese garment and textile exports to Russia currently reach about US$320 million a year, equal to more than two percent of the market volume. After the EEUV-FTA takes effect, export turnover of Vietnamese garments and textiles is expected to reach more than US$1 billion.

However a long time will be required before the EEUV-FTA opens up opportunities for Vietnamese businesses. Le Tien Truong said, “Vietnam’s starting point in the Eurasian Economic Union is similar to Vietnam’s position in the relationship with the US when lacking the US-Vietnam Bilateral Trade Agreement that took effect in 2001. Vietnamese goods have taken around 10 years to dominate the US market. Therefore, expectations for high immediate export turnover are unlikely. However, the EEUV-FTA will have a certain impact on simplifying customs procedures and reducing import tariffs.”

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the EEUV-FTA signed on May 29 with the explicit tariff reduction commitments on seafood will open up more opportunities for Vietnamese goods to enter the Russian market. In fact, Russia has paid attention to Vietnamese seafood and increased imports since the beginning of the year.

Vietnam Timber and Forest Products Association (Vietfores) Deputy Chairman and General Secretary Nguyen Ton Quyen said that the government and the Ministry of Industry and Trade have devised policies to increase furniture exports to Russia. However, this has faced difficulties in terms of raw materials, labor, customs and tax procedures.

“The EEUV-FTA will offer opportunities for Vietnamese businesses to overcome difficulties and promote furniture exports to Russia. The association has made recommendations to the government to accelerate the realization of the EEUV-FTA in order to facilitate businesses,” Nguyen Ton Quyen said.

Total trade turnover between Russia and Vietnam during the 2005-2009 period reached around US$1.1 billion a year. This figure increased to nearly US$3.5 billion a year during the 2010-2014 period. Thanks to the signing of the EEUV-FTA, bilateral trade turnover is expected to reach US$10 billion by 2020.

Phuong Lan & Nguyen Huong