The European Market Department under the Ministry of Industry and Trade has dispelled the rumour that domestic steel producers would face bankruptcy in face of the pending free trade agreement between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan.

During negotiations for the FTA, Vietnam promised to eliminate import tax on more than 100 steel products from the three countries, a move that seems to trouble some domestic steel manufacturers, the department said.

However, both sides agreed the process needed to be based on common interests and a road map for the tariff reductions for several commodities would be devised. Tax on a number of steel products would be reduced gradually, rather than immediately.

Under the agreement, the union would also provide Vietnam with steel types that are not produced domestically. Steel producers from the customs union would have to compete independently with other suppliers on the Vietnamese market, the department said.

The seventh round of negotiations will take place mid-September, with the final agreement scheduled to be signed in early 2015.

The agreement is expected to provide opportunities for Vietnam to increase its exports to these three countries that still hold a large cooperation potential.

Vietnam will focus on selling garments, footwear, and agricultural and aquactic products to the customs union, which in turn will export iron, steel and machinery to the Southeast Asian country.-VNA