08:35 | 24/08/2016 Trade
(VEN) - The free trade agreement (FTA) signed between Vietnam and the Eurasian Economic Union (EEU) consisting of Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia is expected to offer a zero-percent tax rate to many kinds of Vietnamese exports to EEU countries in the next several months after it takes effect. Trade promotion is more than ever necessary to make Vietnamese goods firmly positioned in these markets.
Vinamilk attracted great attention of Russian consumers at the 2015 Vietnamese Goods Week in Moscow
Intensifying trade promotion
Together with the Trans-Pacific Partnership and the EU-Vietnam FTA, the FTA between Vietnam and the EEU is expected to bring great opportunities for Vietnamese goods. The EEU is a large regional market with high purchasing power but not high demanding in product quality. This region is especially interested in key Vietnamese exports such as textiles, garments, leather, footwear, agricultural, forest products and seafood.
This FTA was signed in late 2015 and has been ratified by the parliaments of Russia, Belarus, Kazakhstan, and Kyrgyzstan. It is waiting for the ratification by Armenia to take effect. As soon as the FTA takes effect, high taxes currently applied to a variety of goods, ranging to 40 percent, will decrease to zero percent.
Russia is the largest and most potential market in the EEU. Vietnam and Russia have enjoyed long-standing diplomatic relations. Most Russian consumers like Vietnamese goods. For these reasons, priority should be given to investment promotion measures aimed at boosting exports to Russia.
In order to promote high-quality Vietnamese goods in Russia and facilitate Vietnamese businesses’ access to the Russian market, the Vietnamese Embassy in Russia, the Ho Chi Minh City People’s Committee, and the Hanoi-Moscow Trade Center Investment Joint Stock Company (Incentra) recently organized a meeting to announce a plan to send a business delegation from Ho Chi Minh City to participate in a week-long event that will be held in Moscow this October to promote the city’s products in Russia. Participants included representatives of 150 businesses and leaders of Ho Chi Minh City’s Department of Industry and Trade, Department of Planning and Investment, Trade and Investment Promotion Center, and Incentra.
Ho Chi Minh City Department of Industry and Trade Deputy Director Nguyen Phuong Dong said this week-long event would offer an opportunity to promote Vietnamese investment in Russia and exports to this market. This is an important event to support businesses in the context of the FTA effectiveness, when a zero-percent tax rate would be applied to some Vietnamese exports to the EEU within the first 60 days.
A Russian business delegation will also visit Ho Chi Minh City this October to seek investment opportunities. The city’s Department of Industry and Trade will arrange for businesses of the two countries to meet and discuss their access to each other’s markets.
Business support solutions
Last year, a week-long fair was held for the first time in Moscow to sell high-quality Vietnamese goods, bringing very good results. The fair helped 163 businesses export 120 tonnes of goods to Russia. More than 10 large-scale workshops and seminars were organized offering Russian businesses and consumers a chance to meet Vietnamese companies and learn about their quality products. Through this fair, many Vietnamese businesses have found partners to distribute their products in Russia. Some of them have opened their branches in Russia to do long-term business in this market. These businesses have exported continuously to Russia since 2015.
The Thien Thuong Trading Co., Ltd. is an example. Its interior and outdoor furniture products attracted great attention from Russian visitors to the fair. The company sold out all products it brought to the fair and continued to export tens of containers after the fair. In the near future, when the FTA between Vietnam and the EEU takes effect and the Russian ruble exchange rate increases thanks to macroeconomic recovery, there will be more favorable conditions for the company to do business in Russia and carve a niche in this potential market.
Businesses that take part in the 2016 Ho Chi Minh City Goods Fair in Moscow will receive maximum support from its organizing board. Specifically, Incentra will provide support equivalent to 100 percent of pavilion rentals, 50 percent of hotel accommodation charges, and all expenses related to advertising and pavilion design. The organizing board has also requested Vietnam Airlines to offer discount tickets for two persons from each participating company and reduce the cost of transporting goods to Russia. The Vietnamese Embassy in Russia will assist businesses in preparing invitation letters and picking up people and goods at the airport.
Two fairs will be organized at the Hanoi-Moscow Multifunctional Complex this year, including the Hanoi Goods Week in Moscow that will take place from September 9-16, and the Ho Chi Minh City Goods Week in Moscow from October 6-14.