FTA to boost Vietnam-Russia trade
Trade between Vietnam and Russia is expected to soar in the coming years thanks to tax incentives in the free trade agreement between Vietnam and the Eurasian Economic Union (EAEU), which took effect on October 5.
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Alexey Popov, Russian consul general in Ho Chi Minh City, said Russian exports to Vietnam rose 15% year-on-year in 2015 and have grown 1.5 times in the year to date.
Given steady growth in bilateral trade and cooperation between Vietnam and Russia through the FTA, it is forecast that two-way trade between the two countries would rise from the current US$4 billion to US$10 billion or even higher in the next five years, he told a meeting with reporters in HCMC recently.
EAEU members can boost exports of meat, farm and dairy products, wheat, flour, fertilizer, steel pipes, rolled steel, tires and autos to Vietnam. Meanwhile, the nation can step up exports of fish, rice, fruit, apparel, leather and footwear products, and home appliances to EAEU states.
After the FTA came into force, shipments of textile and garment products from Vietnam to the union are projected to jump 50% owing to tax incentives, said Ivan Gumnikov of the Russian Trade Mission in Vietnam, citing data of the Vietnam Textile and Apparel Association (VITAS).
Gumnikov said the trade agreement will also bring to zero the tax on autos. However, to enjoy the zero tax, Russian firms should set up joint ventures with Vietnamese firms.
Russian auto manufacturers KAMAZ and UAZ are boosting establishment of such joint ventures, he said.
Aside from tax incentives, the trade pact makes customs procedures simpler and more convenient for exporters and importers, said the Russian consul general.
He said Russia and Vietnam are discussing ways to use their respective ruble and dong currencies to settle payments for trade between Russia and Vietnam. The FTA will also help strengthen tourism cooperation between the two countries.
In January-August, 266,000 Russians visited Vietnam, up 25% year-on-year. The number of Vietnamese visitors to Russia climbed to 60,000 in the period, and the figure could reach 100,000 this year.
Data of the Import-Export Department under the Ministry of Industry and Trade showed 938 Vietnamese firms are selling seafood, coffee, rubber, tea, rice, cashew nut, pepper, apparel, footwear, wood, and confectionery to EAEU states.
The trade ministry plans to hold a conference in HCMC this month to help local enterprises cope with issues relating to policies, transport, payment, taxes, technical barriers and competition when shipping products to the union.
According to the HCMC Department of Industry and Trade, 41 firms in the city are attending an exhibition in Russia to promote their products until October 14.
