Russia considers FTA with Vietnam a breakthrough in ASEAN

Trade between Vietnam and Russia is forecast to surge after Russia joins the World Trade Organization (WTO) this December and the Free Trade Agreement (FTA) between Vietnam and the customs alliance of Russia, Belarus, and Kazakhstan is signed next year.

Dang Hoang Hai, Vice Head of the Europe Department under the Ministry of Industry and Trade granted an interview to Dau Tu (Vietnam Investment Review) newspaper on this issue.

What is you assessment of changes in Vietnam-Russia trade ties following Russia’s accession to the WTO this December?

In recent years, bilateral trade between Vietnam and Russia has kept rising despite the impact of the global economic crisis. The total value of exports and imports between the two countries hit US$2.45 billion in 2010, of which Vietnam’s exports to Russia reached US$1.11 billion, a 60.7 percent increase from the same period of the previous year. In the first nine months of 2011, Vietnam saw a year-on-year increase of more than 63 percent in its exports to Russia.

Russia’s accession to the WTO would facilitate two-way trade between Vietnam and Russia, because they share many similarities in terms of legal corridor and regulations on goods quality control. It would be much easier for Vietnamese goods to penetrate the Russian market once the two countries sign their FTA, with both tariff and non-tariff barriers removed between them.

Vietnam agreed to start FTA negotiations with the customs alliance of Russia, Belarus, and Kazakhstan in mid-2012. How far has the preparation process gone?

Russia’s entry to the WTO would provide fresh impetus for Vietnam and Russia in negotiations over the FTA because those involved in Russia’s WTO negotiations remain in the fray.

The joint research group between Vietnam and the customs alliance has finished two thirds of a report on research into the FTA’s effects and will complete the final part of this report in March 2012. With their strong determination, Russia and Vietnam will likely start FTA negotiations in 2012. Russia is keen on signing FTAs with a number of ASEAN member countries, including Vietnam, which is considered a breakthrough in ASEAN and a gateway to the ASEAN market. For Vietnam, it will not only promote its trade ties with Russia but also expand its commercial relations with other countries in the former Soviet Union.

Vietnam mainly exports farm produce, electric devices, wood products, and essentials to Russia while importing from this country steel, iron, fertilizers, machinery, and metal ores.

What polices will be introduced by the Ministry of Industry and Trade to help Vietnamese businesses learn about the Russian market?

We will continue holding workshops and export fairs. In addition, our ministry and the Vietnam Chamber of Commerce and Industry are supporting the provision of online information about the Russian market.