Vietnam-Russia trade sees promising opportunities
(VOV) - Preferential tax policies would lower the cost of capital and thus stimulate foreign investment in Vietnam and Russia, says Prof.Dr Vladimir Mazyrin, Director of the Far East Institute’s Vietnam-ASEAN Research Centre under Russia’s Science Academy.
On the threshold of the Party Secretary General Nguyen Phu Trong’s forthcoming visit to Russia, a Moscow-based Radio the Voice of Vietnam (VOV) has interviewed Vladimir Mazyrin, Director of the Far East Institute’s Vietnam-ASEAN Research Centre under Russia’s Science Academy on trade and economic ties between the two nations.
Reporter: Vietnam-Russia relations have developed well in the spirit of strategic partnership. As an economist who conducts in-depth studies on Vietnam, What is your assessment of trade ties between the two nations?
Prof. V.Mazyrin: Vietnam and Russia see bright prospects for cooperative opportunities. The negotiation process of Free Trade Agreement between the Customs Union and Vietnam has taken place in a positive way and is likely to be signed by early next year.
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| Vladimir Mazyrin, Director of the Far East Institute’s Vietnam-ASEAN Research Centre under Russia’s Science Academy |
When the FTA takes effect, it will help increase the trade turnover among members of the Eurasian Economic Union which will make its debut by early 2015 to replace the current Customs Union. Russia is now the biggest economy in the alliance. Accordingly, Vietnam will also have the biggest trade turnover with Russia under the cooperative framework of the Eurasian Economic Union.
In recent times, both sides have agreed to increase the provision of food from Vietnam to Russia for key items such as frozen seafood products. Russia will create the best conditions for Vietnamese food providers, which will play an important part in economic cooperation between the two nations.
Reporter: Could you elaborate on advantages and disadvantages in bilateral economic cooperation after the FTA between the Customs Union and Vietnam takes effect?
Prof. V. Mazyrin: In my opinion, tariffs for Vietnamese exports to the Eurasian Economic Union market might be higher than the rate of 0.5%. Consequently, Vietnam’s exports to the market will grow strongly and the country will enjoy trade surplus with Russia in the coming time.
There remain limitations in the export of Russia to Vietnam. Import tax rates for Russian goods are not high. However, Russia’s export structure focuses on providing materials which cannot create competitive advantages in your country. Russian businesses might lose in the tough competition race in Vietnam. This is also the reason why Russia’s exports to Vietnam are slower than imports from Vietnam.
Reporter: What measures should both nations taken to increase trade turnover and investment cooperation?
Prof. V.Mazyrin: This is an important issue subject to much debate as both sides have differing viewpoints. Being an expert, my colleagues and I have also submitted proposals to Russian relevant agencies for approval.
The most important thing is to speed up cooperation in the atomic field, especially the Ninh Thuan 1 Nuclear Power Plant project. At present, Russia has lost some industrial sectors namely garment and textile and light industries which have developed significantly in Vietnam.
Therefore, there should be solutions to introduce these industries back to Russia through specific forms of cooperation with Vietnam.
In recent years, Vietnam has pumped more investment in Russia that has reflected the recovery and revitalisation of its industrial sector. The country will enjoy benefits when investing in the oil and gas exploitation in Russia and other fields.
We also proposed some cooperative ways between the two nations. For example, Russia might invite Vietnam to get involved in an exclusive economic zone (EEZs) in the Far East while the central province of Khanh Hoa is one of the localities having favourable conditions for building similar EEZs.
In addition, both countries should build small scale EEZs, offering tax preferences to lure more foreign investors.
Russia is keen to boost cooperation in Khanh Hoa due to many reasons. First, Nha Trang is the most attractive destination for Russian visitors. Second, the two nations boast huge potential for broader cooperation in logistics and military areas.
Reporter: Thank you very much.