A free trade agreement (FTA) between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan is expected to be completed this year, creating many tariff advantages for Vietnam's exports, especially textiles. A report by the Ministry of Industry and Trade's Vietnam Economic Times.
Russia is one of Vietnam’s comprehensive strategic partners, with bilateral trade having achieved great progress over the last several years.
According to the ministry, in the 2010-2013 period, the revenues Vietnam earned from exports to Russia increased more than 62 percent per year and Russia became the biggest market for Vietnam in terms of export growth.
In 2013, Vietnam's exports to Russia was more than 1.9 billion USD, up over 20 percent from the previous year. In the first two months of this year, Vietnam's exports to Russia reached 316 million USD, up 10.7 percent from the same period last year. The main exports included phones and components, computers, electronic products and components, textiles, garments, footwear, coffee, seafood, cashew nuts and rice.
The fourth round of negotiations of an FTA between Vietnam and the Customs Union finished in February, while the fifth round is expected to take place from March 31 to April 4 and the negotiation process is expected to end later this year.
The FTA is expected to pave the way for Vietnamese businesses to access a new, larger market with preferential tariffs.
According to the Vietnam Trade Office in Russia, once the FTA is completed, many non-tariff barriers (customs procedures, payment of goods and technical regulations, among others) in the union’s markets will be removed, many taxes will be cut and service and investment development conditions will become more favorable.
In 2013, textile exports to Russia reached 135.6 million USD, an increase of 11.02 percent over 2012, a ccording to the General Department of Vietnam Customs .
The Vietnam National Textile and Garment Group (Vinatex) said that with a population of 143 million and tariff preferences related to Russia’s accession to the World Trade Organisation (WTO) and the would-be-signed FTA between Vietnam and the Customs Union, Russia will become a key market for Vietnamese textile and garment exports in the coming time.
According to Trade Counselor in Russia Pham Quang Niem, the biggest difficulty for Vietnamese exporters is the absence of a centralised, stable trade transaction organisation in Russia, which makes it difficult for them to learn about consumer demands in this market.
Russia is an open and easy-to-please market so Vietnamese businesses trading with this market have to compete fiercely with rivals from other countries providing product of the same kind, he said. The European country is a large import market that remains potentially risky because its legal system remains inadequate and payment with Russian partners remains difficult, especially those made with letters of credit (L/C), he said.
To better access the Russian market, Niem said that enterprises should participate in annual fairs and exhibitions to directly introduce their products to Russian partners because they prefer looking for partners directly to seeking information through websites, while entering joint ventures with Russian partners to establish enterprises processing Vietnamese products in both countries to help increase sales in Russia.
Vietnamese businesses should assure a high product quality, improve product design and construct and register their product trademarks in Russia, he added.
The income and lives of Russian people have improved markedly. According to Niem, products of high quality and nice designs have attracted consumers; the quality and food safety and hygiene management systems in Russia have been operating quite seriously, and the concept of bringing cheap, average quality goods to Russia should be no longer suitable.-VNA
Russia is one of Vietnam’s comprehensive strategic partners, with bilateral trade having achieved great progress over the last several years.
According to the ministry, in the 2010-2013 period, the revenues Vietnam earned from exports to Russia increased more than 62 percent per year and Russia became the biggest market for Vietnam in terms of export growth.
In 2013, Vietnam's exports to Russia was more than 1.9 billion USD, up over 20 percent from the previous year. In the first two months of this year, Vietnam's exports to Russia reached 316 million USD, up 10.7 percent from the same period last year. The main exports included phones and components, computers, electronic products and components, textiles, garments, footwear, coffee, seafood, cashew nuts and rice.
The fourth round of negotiations of an FTA between Vietnam and the Customs Union finished in February, while the fifth round is expected to take place from March 31 to April 4 and the negotiation process is expected to end later this year.
The FTA is expected to pave the way for Vietnamese businesses to access a new, larger market with preferential tariffs.
According to the Vietnam Trade Office in Russia, once the FTA is completed, many non-tariff barriers (customs procedures, payment of goods and technical regulations, among others) in the union’s markets will be removed, many taxes will be cut and service and investment development conditions will become more favorable.
In 2013, textile exports to Russia reached 135.6 million USD, an increase of 11.02 percent over 2012, a ccording to the General Department of Vietnam Customs .
The Vietnam National Textile and Garment Group (Vinatex) said that with a population of 143 million and tariff preferences related to Russia’s accession to the World Trade Organisation (WTO) and the would-be-signed FTA between Vietnam and the Customs Union, Russia will become a key market for Vietnamese textile and garment exports in the coming time.
According to Trade Counselor in Russia Pham Quang Niem, the biggest difficulty for Vietnamese exporters is the absence of a centralised, stable trade transaction organisation in Russia, which makes it difficult for them to learn about consumer demands in this market.
Russia is an open and easy-to-please market so Vietnamese businesses trading with this market have to compete fiercely with rivals from other countries providing product of the same kind, he said. The European country is a large import market that remains potentially risky because its legal system remains inadequate and payment with Russian partners remains difficult, especially those made with letters of credit (L/C), he said.
To better access the Russian market, Niem said that enterprises should participate in annual fairs and exhibitions to directly introduce their products to Russian partners because they prefer looking for partners directly to seeking information through websites, while entering joint ventures with Russian partners to establish enterprises processing Vietnamese products in both countries to help increase sales in Russia.
Vietnamese businesses should assure a high product quality, improve product design and construct and register their product trademarks in Russia, he added.
The income and lives of Russian people have improved markedly. According to Niem, products of high quality and nice designs have attracted consumers; the quality and food safety and hygiene management systems in Russia have been operating quite seriously, and the concept of bringing cheap, average quality goods to Russia should be no longer suitable.-VNA
