Opportunity to promote trade between Vietnam – Eurasian Economic Coalition

Source: Lafooco

Vietnam and the Eurasian Economic Coalition (EAEU) have many potential and opportunities to promote trade in the coming years.

This is an expert’s comments at the seminar introducing the Eurasian Economic Co-operation market and the opportunity to promote exports through the Free Trade Agreement between Vietnam and the Eurasian Economic Alliance (Vietnam-EAEU FTA) organized by the Ministry of Industry and Trade in Ho Chi Minh City on August 25.

Good signal

The Eurasian Economic Alliance has five member states – Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia – with a combined GDP of 3.2% of global GDP.

Deputy Minister of Industry and Trade Hoang Quoc Vuong said that the Vietnam-EAEU FTA officially came into force in October 2016, opening up great opportunities for enterprises in both investment, trade, import and export. ; Among them, Vietnamese enterprises have the opportunity to access the market of 183 million people, the total GDP reached nearly $ 2.2 trillion.

By contrast, EAEU member companies will have access to the market of more than 90 million people in Vietnam and the potential for expanding cooperation with ASEAN.

Statistics of the General Department of Customs show that after nearly one year of implementation of Vietnam-EAEU FTA, two-way trade between Vietnam and EAEU has seen positive growth.

Specifically, in 2016, the import-export turnover between Vietnam and EAEU Alliance reached 3.04 billion USD, up 23% over 2015, of which, exports of Vietnam reached 1.77 billion USD, an increase of 10 %, The Union’s exports to Vietnam reached $ 1.27 billion, an increase of 45%.

In the first six months of 2017, trade between Vietnam and the EAEU coalition continues to grow, reaching $ 1.7 billion and up 21% over the same period in 2016.

At present, there are about 900 Vietnamese enterprises exporting to EAEU; Of which about 200 enterprises have large turnover, accounting for 90% of total exports, mainly focus on seafood, coffee, rubber, tea, rice, cashew nuts, pepper, textiles and footwear. Wood, confectionery …

Vietnam is the first country to sign a free trade agreement with the Eurasian Economic Union, said Kharinov, the head of the Russian Federal Trade Agency in Vietnam. As a result, the two sides have much incentive to promote bilateral trade, in which the Vietnam-Russia trade exchange has seen the most significant growth.

Specifically, since the beginning of 2017, the export of cereals, food, coal, steel, paper products, chemical industry of Russia to Vietnam increased rapidly. In contrast, many of Vietnam’s strengths, such as mobile phones, electronic products, clothing, footwear and agricultural products, also gained good growth.

Actively explore the market

In the context of increasingly fierce competition, Vietnam and the EAEU Alliance shaking hands through the Vietnam-EAEU FTA opened up opportunities for businesses from both sides. However, there are still many challenges for effectively optimizing the commitments that have been made.

Nguyen Ngoc Hoa, deputy director of Ho Chi Minh City’s Department of Industry and Trade, said that although bilateral trade volume of Vietnam with the whole EAEU block has been upbeat but not commensurate with the potentials of the two sides. Vietnam and the EAEU have many complementary advantages, but bilateral trade is just over $ 3 billion a year.

In addition, trade relations between Vietnam and EAEU member countries have not grown equally. Typically, businesses in Ho Chi Minh City have been promoting trade with Russia, while other members of the EAEU such as Belarus, Armenia have not been exploited.
In fact, Vietnam-EAEU trade growth is mainly driven by an increase in imports and exports between Vietnam and Russia. Vietnam-Russia bilateral turnover has grown rapidly and accounted for over 90% of the total trade value between Vietnam and the EAEU.

Meanwhile, Vietnam’s bilateral trade in 2016 with Kyrgyzstan only moderately, bilateral exchanges with Belarus, Armenia even lower than in 2015.

Nguyen Khanh Ngoc, deputy director of the European-American Market Department, Ministry of Industry and Trade said that in the EAEU coalition, Russia is a member of the traditional trade relations with Vietnam. Is also the largest market. Therefore, when Vietnam-EAEU FTA effect, businesses of the two countries quickly seize the opportunity and promote import-export activities.

On the other hand, according to the Vietnam-EAEU FTA, Vietnam must ship its shipments directly into the EAEU without being subdivided in third countries. Meanwhile, many Vietnamese firms have not yet grasped their specific needs. Countries such as Kyrgyzstan, Belarus and Armenia should choose to export to the Russian market.

To optimize the advantages that Vietnam-EAEU FTA brings to Vietnam, Nguyen Khanh Ngoc said that Vietnamese businesses should actively explore market information, grasp the needs of member states in League. At the same time, it is necessary to rapidly improve product quality, meeting the requirements of partners to take advantage of comparative advantage before EAEU sign free trade agreement with other countries.

In the same vein, Hoang Quoc Vuong said that in order to promote trade exchange, especially to increase the export value of Vietnam, enterprises have no other way to adjust the strategy accordingly, in That is, focus on implementing solutions to improve the quality and variety of commodity products.

Thus, Vietnamese goods can compete with foreign products right at home and expand the international consumption market.

Source: Vinacas 29AUG17