Trade deal seeks to boost VN-Russia ties

Viet Nam's main exports to Russia include telephones, computers, electronics parts, garment and textiles, footwear, seafood, coffee, cashew, rice, vegetables, and fruits, while it imports petroleum products and iron and steel.— Photo baocongthuong

HCM CITY (Biz Hub) — The free trade agreement between Viet Nam and the Customs Union of Russia, Belarus and Kazakhstan would boost trade ties especially with Russia, a seminar heard in HCM City last Friday.

Negotiations for the FTA are on and expected to conclude by the end of this year, according to Tran Ngoc Quan, deputy director of the Ministry of Industry and Trade's European Market Department.

When it is in place, at least 80 per cent of Vietnamese goods exported to that market, especially consumer goods, will enjoy tax exemption.

With a population of 140 million, Russia is a potentially lucrative market for Vietnamese products, and the two sides also enjoy close relations.

Viet Nam's trade with that country has risen considerably in recent years to nearly US$2.75 billion last year, but remained well below potential, accounting for a mere 1 per cent and 0.25 per cent respectively of Viet Nam's and Russia's total trade.

Besides, Russian businesses have invested more than $2 billion in Viet Nam while in the reverse direction, the amount is nearly $2.4 billion.

With the complementary features of the two economies coupled with efforts made by them, trade and investment relations are expected to grow strongly in the coming years, according to Quan.

Tran Bac Ha, chairman of the Bank for Investment and Development of Viet Nam, said drastic competition, high transport costs, and payment issues were among difficulties Vietnamese firms face when exporting to Russia.

He said local firms hoping to enter the market had to study it carefully to come up with appropriate strategies.

They would also need to focus more on improving their competitiveness, he added.

According to the Ministry of Industry and Trade, Russian firms are interested in several sectors in Viet Nam like oil and gas, mining, transportation, telecommunication satellites, auto, and seafood.

Vietnamese firms eye setting up centres in Russia to distribute consumer goods and construction materials.