Recently, in Hanoi, the Vietnam Trade Promotion Agency (Vietrade), Ministry of Industry and Trade held a seminar: "Russia and the Commonwealth Independent States (CIS) Markets - Opportunities for Vietnamese enterprises". The event is a good opportunity for Vietnamese enterprises to identify opportunities and challenges when they want to enter these markets.
Ms Le Hoang Oanh, Deputy Director of the Vietrade, said that since the Soviet Union disintegrated, the trade relationship and economic cooperation between Vietnam and the Customs Union has been modest and not commensurate with the potential and desire of both parties. Specifically, in 2011, total export turnover between Vietnam and Russia increased 8.3 percent over 2010 to reach nearly US$2 billion, and it is expected in 2012 to reach nearly US$3.7 billion. However, Vietnam's exports to Russia accounted for only about 0.5 percent of Russia's total imports. Imports from Russia accounted for only 0.7 percent of the total import turnover of Vietnam. In 2011the total exports to Belarus reached US$210.5 million, increased 111 percent, in which, Vietnam's exports fell 21.68 percent. Total two-way trade turnover between Vietnam and Kazakhstan reached US$48.7 million and increased 10.7 percent.
Deputy Director Ms Le Hoang Oanh also stressed that Vietnam and the Customs Union Russia-Kazakhstan-Belarus are in the process of negotiating free trade agreements. This will be an advantage to help Vietnam's exports to Russia and the CIS countries. In the future, the cooperation between Russian and Vietnamese investors will be upgraded to a comprehensive strategic partnership in many fields, especially in some industries such as nuclear energy, and oil and gas.
Mr Dang Hoang Hai, Head of the European market (Ministry of Trade and Industry), said the Customs Union of Russia, Belarus, Kazakhstan is a vast and potential market. He also stressed that the early signing of the FTA with the customs union will help Vietnamese enterprises have the opportunity to enter this market in a complete and convenient way with preferential conditions and help boost exports of goods, services and investment companies in the country, especially in the difficult economic context where the key markets such as the US, EU, and Japan are facing a serious demand decline.
In terms of opportunities for businesses in Vietnam, Mr Hai said, with the need to expand export markets, turning to markets in the former Soviet Union and Eastern Europe, the signing of a bilateral trade agreement (FTA ) with the Customs Union (Russia, Belarus, Kazakhstan) will bring many opportunities for Vietnamese enterprises. In addition, the FTA would create a clear legal base; increase the competitiveness of goods, widen trade flows and investment between the two sides to match the potential and inherent tradition, The Customs Union establishment has created a vast market for goods. Mr Hai stressed, studies show the potential benefits of FTA agreement on both fronts: For trade in goods and services & investment.
According to Mr Macxim Golikov, Russian representative of trade office in Vietnam, in 2012, the two countries bilateral trade turnover is expected to reach US$3.7 billion. One of the fundamental advantages to promote cooperation between the two sides is that on the international market, the two countries do not compete directly for export strengths, but they complement each other due to their different economic structures. Russia has strength in exports of machinery and equipment, while Vietnam's goods are textiles and garments, footwear and agricultural products.
Mr Macxin Golikov also said currently, Russia’s investment in Vietnam is mainly in the areas of mineral mining, equipment assembly, products processing, hotels, restaurants, real estate, trade, repair, construction, transportation, and warehousing. As expected, by 2018, bilateral trade could reach US$ 10 billion. To effectively leverage the upcoming opportunities, the enterprises need to be prepared and find out how to enter the Russian market, as well as the opportunities and challenges associated with it.
Nevertheless, some business representatives said that if the import tax rate remains the same as today, some items will still have problems and the opportunities to penetrate and expand in the Russian market will remain untapped. The current economic difficulties, and the number of competitors, leave exports to this market declining, especially items such as: cucumber, cinnamon, anise, coconut and pepper. In addition, different customs and business practices have caused certain difficulties in negotiation and payment. So speeding up FTA negotiation with the Customs Union of Russia - Belarus - Kazakhstan is in the enterprises’ interests.
The Commonwealth of Independent States was established more than 20 years ago. Now it has 11 members and has grown into a comprehensive cooperative organization in many fields. With a population of nearly 300 million people and gross domestic product of about US$1,700 billion / year, CIS is an area with great potential for development. However, the economic power in the CIS is still largely based on the potential of Russia - a traditional and potential market of Vietnam. In the visit of Russian Prime Minister Medvedev to Vietnam last November, the two sides pledged to speed up the negotiation process and attempt to help businesses take advantage of these incentives.
Ha Vu
Vietnamese
