The Russian Federation is a large traditional market for Vietnamese exporters and the world’s largest country is expected to become a full member of the World Trade Organisation (WTO) in 2011, which is expected to facilitate Vietnamese goods to enter into this market as Vietnam is also a WTO member, said Mr Dang Hoang Hai, Head of the European Market Department under the Ministry of Industry and Trade, at a seminar entitled “Supporting Vietnamese Goods to Penetrate Russian Federation” held by the Ho Chi Minh City Branch of the Vietnam Chamber of Commerce and Industry (VCCI - HCM) on August 24, 2011.
As an important gateway into Eastern Europe markets, Russia - with a population of more than 100 million people - has been a strategic partner and potential export market of Vietnam. The greatest advantage is the restructure of imports between the two countries is not highly competitive but mutually supplementary for stronger production and consumption in both nations. Vietnam mainly exports tropical products which are not naturally available in Russia, such as seafood, apparel, rubber and footwear while importing input products for domestic production like petroleum, steel, fertiliser, chemicals, machines, equipment and parts. In 2010, two-way trade turnover rose 1.29 percent year on year to US$1.82 billion, of which Vietnam earned US$829 million and Russia fetched US$999 million. In the first half of 2011, bilateral trade revenues reached US$984 million, of which US$628 million came from the exports, and US$356 million from the imports. Positively, Vietnam is seeing a higher proportion of export turnover and a lower proportion of imports in trade with Russia. The two countries have set targets of US$3 billion in the two-way trade by 2012 and US$10 billion by 2020. According to economic experts, these goals are attainable because the bilateral trade ties are flourishing.
VCCI - HCM Director Vo Tan Thanh said trade promotion activities are being actively deployed for Vietnamese businesses to identify opportunities and channels to approach the Russian market in the most effective way. Immediate measures are the focus on the exchange of information, explanation about the possible barriers such as tariff regulations, standard norms for food security, modes of payment and support for credit in trading.
Mr Kardo Sysoev Alexander, a representative of the Russian Trade Office in Vietnam, said: Although there is a significant progress in the two-way trade, outcomes mismatch expectations and potentials of the both sides, particularly a poor structure of exchanged goods. Distant shipping and cumbersome administrative procedures in Russia are obstacles for new exporters. In addition, Russia is a very large country and imported goods, including from Vietnam, are difficultly distributed there. He said consumer goods and food markets are opening up for imports and Russia will become a “gold mine” for good businesses.
According to participants, compared with the US and the EU, the Russian market is quite easy but potentially risky. Once entering this market, businesses have to compete in both goods and investment. This is also the reason why Vietnam’s exports to Russia still account for a small proportion although the potentiality is proven huge.
Mr Hai said to overcome obstacles to the Russian market entry, apart from their own efforts, businesses need support from the Government. They should stick to this support to get through difficulties, stabilise production and export. In recent years, the Government has organised several trade and export promotion activities in the Russian market. Vietnamese companies should take up these chances to broaden their visions and review their capacities before entering into this potential market.
He asserted that the Ministry of Industry and Trade will strengthen the role of the Vietnam Trade Promotion Agency (Vietrade) and increase business matches, conferences and dialogues between Vietnamese and Russia companies and localities, thus helping Vietnamese enterprises to export their products to Russia more easily. The ministry will also build a financial supporting policy for trade promotion programmes in Russia.
Mr Kardo Sysoev Alexander stressed: “The establishment of processing joint ventures in Vietnam will help raise efficiency of Vietnamese exporters' trading. At present, Moscow is choosing some places to set up regional logistics centres for the purchase and distribution of Vietnamese foods and foodstuffs. This is considered the most effective measure for private companies of the two countries to get involved in the Vietnam export development.”
With supports of the Government, Vietnamese enterprises hope to widen the road to Russia. And, more importantly, they hope Russian consumers to have better look on Vietnamese goods.
Hong Ha
Vietnamese
