More New Trade Bridges for Vietnam - Russia Cooperation

It can be said that never before has the potential for exports to Russia been as high as it is today. These opportunities are created by foreign policies of the two countries; the transformation of the Russian economy after it joins the WTO and negotiations towards signing a free trade agreement (FTA) between Vietnam and the Customs Union (Russia, Belarus, Kazakhstan). These opportunities are opening further prospects for exports from Vietnam to Russia.

 

Ambassador Pham Xuan Son said that in recent years the bilateral trade turnover between Vietnam and Russia has seen significant increases, from US$400 million in 2000 to US$1 billion in 2007, US$1.8 billion in 2010, US$2.45 billion in 2012 and approximately US$4 billion in 2013. Currently, Vietnam mainly exports to Russia phones and accessories, computers and electronic products, textiles and garments, footwear, seafood, coffee, cashew nuts, rice and vegetables. According to Deputy Minister of Industry and Trade Do Thang Hai, despite encouraging results, the current trade turnover Vietnam - Russia compared to overall trade turnover between the two countries is still very modest. However, with the supplement potential of the two countries and mutual efforts to elevate the cooperation of the two countries' leaders, it is firmly believed that in the future, economic-trade relations of Vietnam-Russia will have favourable conditions to develop.

 

For the Russian part, Mr Viktor Evtukhov Leonhitdovich, Deputy Minister of Industry and Trade of the Russian Federation said: "Vietnam is a long-time partner, as well as a reliable supplier for Russia. Regarding the Russian government, after officially becoming member of the WTO, Russia has reduced import duty and issued more tax incentives for a number of countries, including Vietnam. We hope this will be a good opportunity to help Vietnam’s businesses to invest more in Russia, bringing the cooperation and sustainable development between the two countries."

 

About opportunity for Vietnam to export goods to the Russian Federation, Mr Tran Bac Ha, Chairman of Bank for Investment and Development of Vietnam (BIDV) said the FTA between Vietnam and the Customs Union was entering final negotiations and expected to be signed in 2014. After the FTA between Vietnam and the Customs Union is signed, many non-tariff barriers will be removed, in addition to a variety of taxes on goods imported into the Russian market will be reduced; opening up opportunities for Vietnam enterprises to penetrate and conquer this vast market.

 

Also at this workshop, the organizers also introduced to the business community the Moscow Centre for Culture, Trade and Hotel (Incentra) - a partnership project between Hanoi and Moscow, bridging trade between two countries Vietnam and Russia. The centre is the biggest combination of trade and culture of Vietnam in foreign country which is prepared to go into operation in September 2014. Mr Nguyen Canh Son, Chairman of Hanoi-Moscow Trade Investment Corporation, investor of Incentra said: "The centre will actively contribute to the promotion of trade between two countries Vietnam - Russia and also expand the door into the Russian market for Vietnamese business."

 

To have strong decisions in investment and business development, a prerequisite is that enterprises have to better understand the market, then, to identify solutions for effectiveness when approaching and entering the market. One of the important solutions that businesses should not ignore is building a solid base for your business in the foreign market. In this regard, Mr Andrey Korotkov said that when doing business in Russia, there was nothing better for a business than having their own establishments and through which the business may access the Registration Agency, and also the agencies in charge of tariffs, finance, banking or support policies. The National Registration Office of the Ministry of Justice is ready to support Vietnamese businesses to open a representative office or branch in Russia. The building of Incentra brings a great advantage for the business community in Vietnam. Through Incentra, businesses can have access to the necessary services rather than reaching individual agency to address their needs. Andrey Korotkov noted: "A particularly important point for Vietnam's enterprises is when they reach Incentra they can rent offices and receive a certificate of registration. The most important point in Russia’s policy and law is that foreign companies must register legal establishment."

 

Along with incentives from management agencies and authorities, businesses participating in this workshop also approached policies to support exports to Russia. It is the policy of credit for business purchasing office or booth at Hanoi-Moscow trade centre of BIDV; supporting policies for freight from Vietnam to Russia, supporting policies for the legal procedure in the registration of establishment, branch, representative office or showroom. Businesses also looked for potential partners in the Russian market, in which Incentra supported businesses which purchased or leased a booth in the centre. These features are not only useful for businesses interested in the Russian market, it also has a more positive impact on businesses already doing business in this market. Vo Tan Thanh, Director of Vietnam Chamber of Commerce and Industry, Ho Chi Minh City Branch (VCCI – HCM), stressed: "We encourage Vietnamese enterprises that have plans to enter Russian market to study Incentra services to conduct their activities. For VCCI part, we will also coordinate with the National Trade Promotion Agency and the professional associations to study the possibility of coordinating with the centre to organize Vietnam’s trade promotion at this centre in the coming years."