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Int'l Cooperation

Last updated: Tuesday, December 11, 2018


Vietnam-Russia Strengthening Trade Cooperation

Posted: Friday, January 12, 2018

12 contracts and business cooperation agreements have been signed by the parties within the framework of the second Vietnam-Russia International Industrial Exhibition held in late 2017. In addition, there were other extended agreements and business contracts as well as other concrete results.

This is probably a good time for Vietnam and Russia to strongly link trade promotion and investment cooperation on the basis of the development of "special strategic and friendship relations between the two countries", as President Vladimir V. Putin described in a meeting with his Vietnamese counterpart Tran Dai Quang in the past year.

Following the success of the first exhibition held in December 2015, Russia has signed 172 agreements with Vietnamese partners. This exhibition has many new features as the number of Russian enterprises doubled that of 2015. The exhibition showcased export products and services, promising results of enterprises, universities and research institutions, and investment projects of the regions. In addition, the latest achievements in the fields of energy, machine building, transportation, telecommunications, mining, chemical industry, medicine, agriculture and other high-tech industries were also displayed at the exhibition.

According to statistics from the European-American Market Department under the Ministry of Industry and Trade, bilateral trade between Vietnam and the Russian Federation has regained strong growth momentum; especially in the context of the Free Trade Agreement between Vietnam and the Eurasian Economic Coalition having gone into effect.

Statistics show that in 2016, bilateral export turnover between Vietnam and the Russian Federation reached US$2.7 billion, up 25 percent over 2015. In the first eight months of 2017, turnover between Vietnam and the Russian Federation increased by over 29 percent over the same period of 2016. Export turnover of the first eleven months of 2017 to Russia reached over US$3.2 billion, an increase of 26.7 percent over the same period in 2016. Based on these figures, in the coming time surely the Agreement will contribute to the development of two-way trade between Vietnam and the Russian Federation.

Vietnam's exports to Russia are mainly phones and components, followed by textiles, coffee, rice, machinery, equipment, tools, spare parts, confectionery and products and grain products. According to experts, Russia is the traditional market of Vietnamese goods and "easy" to please, with the selection of models and quality, compared to many European countries.

About investment, the total investment between the two sides reached about US$ 4.5 billion, mainly in the energy and mining. The implementation of new investment projects in the coming years can help total Russian investment into Vietnam grow 2-3 times more than today.

However, this result is not commensurate with the potential cooperation of the two countries, or the expectations of the Government of Vietnam and the Russian Federation.

With the free trade agreement between Vietnam and the Eurasian Economic Union (EAEU), Vietnamese enterprises have the opportunity to export high quality goods in such strengths as textiles and leather shoes to the Russian market, and import agricultural and high-tech industry products from Russia. The two countries are determined to increase trade between the two countries to US$10 billion by 2020.

To highlight the relationship, leaders of the two countries have agreed to take 2019 as the year of Vietnam in the Russian Federation and the year of the Russian Federation in Vietnam.

Russia has signed a cooperation agreement with VCCI to jointly organise exhibitions in the the year of Russia-Vietnam comprehensive cooperation 2019 and subsequent exhibitions until 2023.

To optimise the advantages that the Vietnam- Eurasian Economic Union FTA brings to Vietnam, according to experts, Vietnamese enterprises should actively explore the market information, grasp the needs of Russia. At the same time, businesses have no other way but to soon adjust strategy; in particular, focus on implementing solutions to improve the quality and diversification of commodity products.

Quynh Anh

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