Dr. Artem Pylin of the Institute of Economics under the Russian Academy of Sciences is intervied by VNA reporters (Photo: VNA) Hanoi (VNA) – The Vietnam-Eurasian EconomicUnion Free Trade Agreement (VN-EAEU FTA) is of great importance to Russia sinceit is a leading economy in the EAEU, said a Russian expert.
Vietnam has signed about 15 free tradeagreements with international partners, while the pact with Vietnam is thefirst of its kind inked by the Eurasian Economic Union, said Dr. Artem Pylin ofthe Institute of Economics under the Russian Academy of Sciences, adding thatRussia highly evaluated Vietnam’s experience.
Pylin cited the official statistics by theEurasian Economic Commission, which showed that Vietnam’s exports to the EAEU membercountries, including Russia, Belarus, Kazakhstan and Armenia, grew almost 30 percent in thefirst seven months of 2017, while the EAEU’s exports to Vietnam rose only 11percent.
In the short term, Vietnam has capitalised onthe trade deal better than the EAEU nations, he said in an interview granted toVietnam News Agency reporters on the first year of implementing the FTA.
The expert attributed the trade gap todifferences between Vietnamese and EAEU commodities. Vietnam shipped to thebloc a wide range of products, mostly popular consumer goods, such as mobilephones, food and apparel, which has recorded good growth right after the pacttook effect. Meanwhile, the EAEU countries mainly shipped to Vietnam oilproducts, fertilizers, metals and auto spare parts, which require high valuecontracts, specialized transport agreements, and big business customers.
He also pointed to Russia’s economic slowdownas another cause of the gap, which resulted in drops of 25 percent and 4percent in Russia’s exports to Vietnam in 2016 and in the first months of 2017.
Pylin said Russia might change its tradepolicy with Vietnam if it cannot take full advantage of the VN-EAEU FTA,particularly once the EU-Vietnam Free Trade Agreement (EVFTA) is officiallysigned, heating up competition in the Southeast Asian market.
With an annual growth rate of almost 7percent, Vietnam is expanding its export markets and the EAEU nations with 183million people is seen as a potential market, he said, suggesting that Vietnamesecompanies should connect together, form value chains, and build strongtrademarks to seek a firm foothold in this market.
The Vietnam-EAEU FTA was inked in Burabay, Kazakhstan, on May29, 2015 and took effect on October 5, 2016.
Under the agreement, Vietnam will remove import tariffs on 59percent of the total tax lines on goods from the EAEU, including meat products,wheat flour, alcohol, mechanical equipment and steel products. The tariffs onanother 30 percent of goods will be gradually reduced to 0 percent in thetransitional period.
The average level of Vietnam’s duties on EAEU goods will dropfrom 10 percent to 1 percent, while EAEU’s average import tariffs on Vietnam’sgoods will be reduced from 9.7 percent to 2 percent in 2025.
The tax removal is expected to spur the EAEU’s export ofagricultural and industrial products to Vietnam, and vice versa, Vietnam’s farmproduce, garment, bags and electrical devices will have better access to theEAEU market.
At the same time,businesspeople of both sides will have opportunities to take part in jointprojects in the EAEU countries and Vietnam-VNA
VNA
