Connecting Enterprises of Vietnam and Eurasian Economic Union

 

According to Dr Khuong, the forum is a place for the governments and businesses of the two sides to get closer to exchange views and strengthen business and investment cooperation between the countries in the region.

 

Vietnam and the Union focus on promoting the peace, prosperity, and mutual win-win development. Vietnam is the first partner to sign the FTA with the Eurasian Economic Union, through which Vietnamese enterprises will have more trade opportunities. Vietnam expects that the Union in general and the member countries in particular will make more direct investments in Vietnam, thereby, improving production capacity and competitiveness of products and services and diversifying import and export markets of Vietnam and partners.

 

Once the FTA is signed, the businesses of the member countries will also have more opportunities to expand relations with the major economic partners like the U.S., Japan, China and Korea that Vietnam have signed the FTA with. Additionally, Vietnam will have strong competitive advantages such as strategic geographical location, abundant labour force, hard work, cheap labour price, quite good infrastructure system, growing consumer market, stable political system, investment and incentives for large investors around the world.

 

First Deputy Minister of Economic Development of the Russian Federation Alexey Likhachev said that in the context of Vietnam's international economic integration, Russian businesses and businesses of the Union in general will have opportunities to access other markets, in particular the ASEAN once the ASEAN Economic Community is established.

 

According to the statistics of the Ministry of Industry and Trade, in the period 2009-2014, the average trade growth rate of Vietnam and other Union countries was 5-6 percent per year, with the bilateral export turnover in 2014 reaching US$4.2 billion. This is a very modest figure if compared with the total value of import and export of Vietnam of over US$300 billion and US$900 billion of the Union.

 

According to the Ministry of Industry and Trade, once the FTA takes effect, nearly 90 percent of the tariff lines of the two sides will be cut down to 0 percent, equivalent to 90 percent of bilateral trade.

 

In particular, Vietnam agrees to cut 87.7 percent of the tariff lines, equivalent to 94.4 percent of the total import and export value of Vietnam, of which 52.4 percent of the tariff will be removed immediately. With such the commitment, the FTA will help strengthen the competitiveness of the goods of the Union exported to Vietnam while creating conditions for new goods penetrated to the Vietnamese market.

 

In turn, the Union is committed to opening the market at different levels, with 87.4 percent of total tariff lines, equivalent to 90.5 percent of the total average imports from Vietnam in the 3 years from 2010 to 2012. 84.7 percent of the tariff lines are eliminated under the roadmap within a maximum of 10 years and 2.7 percent of the tariff lines are partially opened.

 

Besides, the Agreement stipulates the terms for cooperation in areas such as trade remedies, rules of origin, customs cooperation and trade facilitation, technical barriers to trade (TBT), sanitary and phytosanitary (SPS ), intellectual property protection, sustainable development, e-commerce, government procurement, and trade and services.

The Agreement is actually a legal framework that enables Vietnamese enterprises to enhance the cooperation of economy, trade and investment. According to experts, the export turnover will reach US$10-12 billion in 2020, nearly 3 times more than in 2014 and the import turnover of Vietnam to the Euroasian Economic Union is estimated to grow by 18-20 percent annually.

 

However, businesses of the two sides should carefully study the rules and commitments of the Agreement to take full advantages of the incentives and prepare plans to enhance their competitiveness in accordance with the schedule of the tariff reductions.

 

The geographic distance is a significant obstacle. Vietnamese businesses need to carefully examine the route of transport, storage and yard to ensure the most competitive cost.

 

Currently, the bilateral payment process is somewhat difficult. According to the Ministry of Industry and Trade, businesses should have a close relationship with banks to do in-depth research on cooperation in the banking and financial sector, especially regarding to the domestic payment made by the Bank of Investment and Development of Vietnam and the Commercial Bank of Russia to resolve the difficulties in the current payment process between Vietnam and the member countries of the Union.

 

Besides, the Union is the market with high demands on sanitary and food security. Therefore, to successfully exploit this market, Vietnamese exporters must meet appropriate technical qualifications to meet the technical and language levels to product quality and competitiveness.