Russia, Vietnam record significant trade growth

08:29 | 18/05/2018 Cooperation

(VEN) - Trade and investment relations between Vietnam and the Eurasian Economic Union (EAEU) comprising Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan have achieved positive results since their free trade agreement entered into force some 18 months ago. Vietnam currently ranks first on the list of Russia’s largest trading partners in Southeast Asia.

russia vietnam record significant trade growth

Vietnam Trade Promotion Agency Director Vu Ba Phu said trade turnover between Russia and Vietnam reached US$5.2 billion in 2017, recording the highest level since 1991, an increase of 29 percent compared to 2016. In the first two months of this year, two-way trade turnover reached US$657.7 million, a year-on-year increase of 43.5 percent.

Mobile phones, garments and textiles, computers and components, machinery and equipment, and agricultural products are Vietnam’s exports to Russia, while imports include fertilizers, wheat, machinery and equipment, spare parts, seafood, metals that are not steel, and other petroleum products.

The free trade agreement between Vietnam and the EAEU is considered an effective legal framework to promote trade and investment. Under the trade deal, nearly 90 percent of tariff lines have been cut or reduced, with 60 percent being removed immediately after it took effect in October 2016.

With its strengths, the Vietnamese market is considered Russia’s important partner in its export strategy.

In terms of investment, Russia has poured more than US$1 billion into Vietnam, ranking 23rd among the 119 nations and territories investing in the country.

Russia is also Vietnam’s second biggest foreign investment destination, worth nearly US$3 billion via projects funded by the Vietnam National Oil and Gas Group (PetroVietnam), TH True Milk Group and the Hanoi-Moscow Trade Center. Russian Ambassador to Vietnam Konstantin V. Vnukov said Russia is ready to create favorable conditions for the lives and working environment of the Vietnamese people.

According to Vu Ba Phu, Vietnam is ready to receive investment capital from Russia, especially in the fields that are Russia’s strengths, such as energy, oil and gas, petrochemicals and auto manufacturing. Vietnam also hopes Russia will create favorable conditions for Vietnamese businesses to seek investment opportunities in Russia in the areas of agriculture, food processing, information technology, consumer goods production, real estate business and mining.

Last December, Minister of Industry and Trade Tran Tuan Anh and Russian Ambassador to Vietnam Vnukov signed a revised protocol, which facilitates auto production in Vietnam. Accordingly, Russian vehicle makers, including KAMAZ, GAZ and UAZ, will set up joint ventures in Vietnam to manufacture and assemble trucks and cars with 10 seats and above, crossover utility vehicles and several kinds of special-purpose vehicles.

Under the revised protocol, Vietnam will allow the venture to import duty-free 2,550 complete built-up units and 13,500 sets of automobile parts from 2018 to 2022 as a way of exploring the capacity and tastes of the market. The revised protocol will provide more favorable conditions for Russian automakers to explore and enter the Vietnamese market, as well as create diverse options for Vietnamese consumers.

Russia and Vietnam have set an ambitious target of bilateral trade reaching US$10 billion by 2020. To achieve the target, the sides need to implement successfully projects such as auto production in Vietnam.

Nguyen Huong