Vietnam Exports to EEU Expected to Rise 18-20 Pct Annually

According to the Ministry of Industry and Trade of Vietnam, the Vietnam - EEU Free Trade Agreement was officially initiated in Hanoi on March 28, 2013. After about two years of negotiations, the parties concerned signed the agreement with a comprehensive scope, high-level commitments, balanced benefits and specific conditions of each party. The agreement includes main Chapters on Trade in Goods, Rules of Origin, Trade Remedies, Trade in Services, Investment, Intellectual Property, Sanitary and Phytosanitary (SPS) Measures, Customs Facilitation, Technical Barriers to Trade (TBT), Electronic Technology in Trade, Competition, Legality and Institution.

The ministry said the EEU grants Vietnam preferences and opportunities for exporting products of Vietnam’s basic interests like agricultural products and industrial products like garments, textiles, footwear, wooden furniture and processed products.

 

Importantly, the EEU will levy zero tax on all seafood products from Vietnam right after the FTA takes effect. Together with tariff elimination, the two sides will actively implement the SPS Programme, including contents of equivalent recognition of all treatments or management systems in related fields, mutual recognition of concepts of adaptation to regional conditions and use of audit results and information of major international organisations. The two parties will promote cooperation, deploy trade facilitation initiatives and technical assistances and establish effective mutual consultation mechanisms.

 

Vietnam agreed to apply a market opening roadmap for the EEU for some livestock products, some industrial commodities including machinery, equipment and transport means. In fact, these goods do not compete with Vietnam’s goods but help diversify its domestic consumer market. Although agricultural products like dairy products, cereals are considered priority products by the EEU and agreed for immediate market opening by Vietnam, the EEU member countries do not tend to export these products to Vietnam in at least first five years. Hence, Vietnam’s agriculture will not be significantly affected by agricultural imports from the EEU.

 

Overall, the two sides will reduce 90 percent of tariff lines, or over 90 percent of bilateral trade turnover.

 

According to the EEU’s initial forecasts, the two-way trade turnover will reach US$10-12 billion in 2020, compared with US$4 billion in 2014. According to Vietnam’s forecasts, its exports to the EEU are expected to rise 18-20 percent annually.

 

Such contents as intellectual property, competition and sustainable development of the agreement will largely limit at cooperation level and do not go beyond Vietnam's commitments in the WTO and other FTAs it has signed or negotiated. Thus, the two sides can boost cooperation in these fields.

 

The Ministry of Industry and Trade said the EEU has a population of over 175 million and a combined GDP of US$2,500 billion. Although the EEU is a newly established economic entity, it plays a very important role to the development of some former Soviet Union states heading to form a single economic space. The FTA signing reaffirms Vietnam’s active and positive roles in establishing comprehensive ties with EEU member countries, especially in executing Vietnam-Russia Comprehensive Strategic Partnership. For the EEU, Vietnam is the first partner to sign an FTA with the union, making Vietnam a strategic partner of the EEU in Southeast Asia. The EEU hopes to expand its trade and investment ties with Southeast Asia in its Asia - Pacific Relations Strategy.

 

Economically, Vietnam’s major objectives in FTA negotiations and signings and economic integration commitments are to obtain basic economic interests by improving domestic production competitiveness, providing opportunities of trade, service and investment promotion, diversifying export markets and reducing single-market reliance. After the signing, the two parties will quickly complete the ratification of internal procedures for the early and successful enforcement of the agreement.

 

Huong Giang