09:35 | 28/06/2019 Trade
(VEN) - The Free Trade Agreement between Vietnam and the Eurasia Economic Union including Russia (Vietnam-EAEU FTA) took effect in 2016 opening up ample opportunities for Vietnamese seafood exports to Russia. However, Vietnamese enterprises have not yet capitalized on these opportunities.
Under the agreement, 95 percent of the EAEU’s tariffs on Vietnamese seafood exports are to be zeroed out over 10 years, with 75 percent terminated immediately after the agreement became effective.
Vietnamese shrimp exports to Russia have not yet taken advantage of the opportunity. In fact, shrimp export revenues to this market have been dropping continuously - from US$20.3 million in 2016 to US$18.2 million in 2017 and US$15.2 million in 2018. A hopeful shift may be under way, with first quarter exports reaching US$1.9 million, more than double the revenues in the commensurate period of 2018.
Two reasons appear to account for the shrimp export revenue decline over the past three years. According to the Vietnam Association of Seafood Producers and Exporters (VASEP), for years now Vietnamese shrimp exporters have focused on attractive and traditional markets like the US and the EU, rather than Russia. Moreover, the price of Vietnamese shrimp is a bit higher than that of competitors from India, China and Ecuador.
Vietnam was second to China in supply of white-flesh fish to the Russian market, with100 percent of Russia’s Tra and Basa frozen fish fillet imports from Vietnam.
However, according to the VASEP, Russia’s Tra and Basa fish imports have been progressively dropping since 2011, reaching US$4.88 million in the first quarter of this year, a 12.6 percent decline from a year ago.
China currently has an advantage in tilapia exports to Russia, and the three kinds of white-flesh fish - Tra, Basa and Tilapia - are competing vigorously in Russia. However, Vietnamese Tra fish exporters do not really want to increase their exports to this market since Russian importers prefer Chinese tilapia.
The Vietnam-EAEU FTA offers advantages for Vietnamese shrimp exports to Russia when compared with competitors from countries that have not concluded a similar FTA with the EAEU. In consideration of this, the VASEP suggested that Vietnamese shrimp exporters develop domestic material resources to meet the principles of origin, while at the same time sharpening their competitive edge to meet Russian quality standards.
According to experts, in order to increase exports to Russia in particular and Northern Europe at large, Vietnamese
enterprises need to carefully survey the market, understand their partners and keep in touch with them for long-term