Vietnam, Russia Enhance Trade Ties

At the conference, speakers introduced potentials and opportunities for the cooperation of the two-country businesses, taxes and customs policies as well as Russia’s priorities for Vietnamese products as Free Trade Agreement (FTA) between Vietnam and Russia-Kazakhstan-Belarus Customs Union.

 

The Vietnam-Russia trade has seen improvement after Russia’s entry to WTO in December 2011. Statistics showed that, in 2011, Vietnam-Russia trade turnover was estimated at US$2.12 million, including US$1.38 billion of export value, up 66.2 per cent against 2010, making the year become the first which has seen the two-side trade surplus. Vietnam’s staple exports to Russia is mobile phones and their spare parts, seafood, apparel products, fruits and vegetables, cashew nuts, coffee, rice and teas. Meanwhile, Vietnam mainly imports petroleum, steel and iron, fertiliser, machines and equipment from Russia. According to experts, Russia is a big market and is also a traditional market of Vietnam. It does not require strict standards in quality and design. Russia is really a potential market which promises high profits for Vietnamese exporters. However, in reality, Vietnamese exports only account for just less than 0.5 percent of Russia’s total imports. The two-side trade turnover remains very modest compared to their strength and potentials, which has not seen any breakthrough. To achieve the set goal of trade turnover of US$3 billion in 2012, US$5 billion in 2015 and US$10 billion in 2020, Vietnam and Russia will have to beef up information exchange, market expansion and investment cooperation activities.

 

Mr Do Van Hung, Deputy General Director of Military Bank, said over the past years, Russia has become a top destination for many Vietnamese companies for their profitable business because the market has many businesses managed by Vietnamese entrepreneurs in the areas of construction, real estate, consumer goods and wholesale and retail. Therefore newcomers will receive strong support from Vietnamese firms which have deep understanding of Russia culture, language as well as relationships in the market. Moreover, Vietnamese products have become familiars with Russia consumers, which is a big advantage for Vietnamese exporters.

Deputy Director Pham Duc Tien of the Hanoi Department of Industry and Trade said Vietnam and Russia have established a long traditional and good relationship. The bilateral trade turnover has grown over the past years. In the first half of this year, Vietnam obtained a trade surplus of US$1.64 billion to Russia. However, the outcome does not match the two-country potentials and strength. The Hanoi Department of Industry and Trade has pledged to assist companies to organise investment promotion conferences, fairs, exhibitions as well as offer opportunities for exchange information between the two-nation businesses.

 

Mr Nguyen Khanh Ngoc, Head of European Market Department under the Ministry of Industry and Trade, said the signing freed trade agreement (FTA) between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan is the global economic integration, helping to meet urgent demand for expanding export market. It also helps Vietnamese companies to take deeper penetration into Eastern Europe. The union establishment has created a big consumption market for Vietnam. Vietnam also gets priority from union in FTA negotiations. The FTA signing is aimed to carry out four freedom rights in transporting goods, services, investment and labour.

The representative from the European Market Department also said FTA negotiations with the union will bring Vietnamese exports advantages such as tariff reduction, non-tariff barrier removal such as customs procedures, goods payment and technical regulations. This is a chance for special service development about tourism, overseas remittance and investment. However, Russia is an open market and is not demanding, so entering this market does not face a fierce competition like other markets. Basically, Vietnamese companies will have to encounter difficulties such as competition from rivals which also exports same products to Russia and different in taste of customers between two-country consumers. Therefore, in the current situation, enterprises need to actively seek opportunities to business expansion with this potential market.

 

According to RTRA Director, Maxim Golikov, two-country enterprises have not fully developed their potential over the past years due to some reasons. They still lack information market, while facing inconvenience in international payment and goods transport. To improve the situation, they should pay attention to raise their quality product, seek market information, and promote their products.