FTA Vietnam – EAEU: Improving trade relation and economic development
With the presence of the Free trade agreement (FTA) between Vietnam and Eurasian Economic Union, trade relation between two parties has significantly improved.
According to Commercial Counsellor of the Vietnam Embassy in Russia, Duong Hoang Minh, the implementation of the FTA Vietnam – EAEU has been effective and brought positive results for both sides. As such, the bilateral trade between Vietnam and EAEU for the first 8 months has reached 2.79 billion USD, up 23.5% compared to the same period of last year. In which, Vietnam export is 1.97 billion USD, up 29.5%; while EAEU export is 825 million USD, up 11.3%.
Processing shrimp for export.
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Enterprises from both sides have pushed forward with trade promotion, searching for new market and partners from both countries. However, the implementation of FTA Vietnam – EAEU still remains difficulties, such as information provision with regard to preferential policies, especially for small and medium enterprises. Meanwhile, removing existing import tariffs is one of the important conditions for enterprises to be able to take advantages from the FTA. Besides, it is necessary to increase coordination at various working level, organizing conferences and workshops on the implementation of FTA, information exchanges between two sides. Remarkably, goods export from Vietnam to Russia, the biggest market in EAEU, still faces difficulties.
Firstly, Vietnam export is mainly materials, basic goods, with low added value, leading the low export value. With regard to seafood, one of the advantage of Vietnam export, the number of Vietnamese’s exporters to Russia and EAEU are limited, with only 20 enterprises. This is also a reason for the low trade value between two sides.
Secondly, the depreciation of the Ruble and economic sanctions from the West to Russia have led to difficulties in payment for Vietnamese enterprises, which often pay with USD and EUR.
Thirdly, the large distance between two markets, long transportation has decreased the competitiveness of Vietnamese goods compared to the same export goods of India, China or Thailand. Besides, Mr. Duong Hoang Minh said, Vietnamese enterprises lack knowledge of the Russian market. As such, it is necessary to increase promotion and awareness of the Russian and EAEU markets to Vietnamese enterprises and customers, which is important to build confidence for enterprises. Bearing this in mind, they will be more active in looking for partners in Russian and EAEU markets.
With regard to solutions to improve the bilateral trade, as well as increase opportunity for Vietnamese enterprises accessing Russian market, Mr. Duong Hoang Minh said, Vietnamese enterprises should focus on staffs capable of speaking Russian to be able to access the Russian market, where customers rarely use English. Besides, developing a strong brand and producing high added value products are feasible solutions for Vietnamese enterprises.
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