Illustrative image (Source: VNA)
Hanoi (VNA) - Trade revenues between Vietnam and the Eurasian Economic Union (EAEU) are expected to increase to 10-12 billion USD by 2020, after a free trade agreement between the two sides takes effect in 2016.
News website ndh.vn reported, citing a Ministry of Industry and Trade (MoIT) estimate, that this triples total bilateral trade revenue of roughly 4 billion USD in 2014. Vietnam’s exports to the union alone are expected to grow by 18-20 percent per year.
The MoIT said in a statement this week that the Vietnam-EAEU FTA will become effective on October 5, following confirmation from the Ministry of Foreign Affairs.
The union consists of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The related countries have ratified the agreement after signing it in Kazakhstan on May 29, 2015.
After the agreement takes effect, Vietnam and the union will establish a joint committee, along with a committee on trade of goods, and a sub-committee on goods origin regulations.
MoIT’s Europe Market Department Director Dang Hoang Hai told a conference in Hanoi last month that Vietnam, as the first FTA partner of the union, would improve the competitiveness of its export goods.
The agreement covers a market of almost 183 million people and accounts for 3.2 percent of global gross domestic product.
Vietnam and the union will cut about 90 percent of their lines of tariff.
They will slash the rate for nearly 60 percent of tariff lines to zero percent immediately after the agreement becomes effective.
Vietnam will immediately lift import duties for EAEU products such as salmon, which is taxed by 10 percent; and tilapia and tuna, now seeing tariff rates of 15-20 percent.
The EAEU will apply a zero percent tariff for Vietnamese products such as uncondensed milk and ice cream with no sugar and sweet substance, which has an import tax of 15 percent; and fresh chestnut and turkey meat, which are subject to import duties of 5 percent and 20 percent respectively.
Hai said Vietnam’s major exports such as garment and textile, footwear, farm produce and seafood will have opportunities due to the tax cuts.
The content of the agreement can be seen on the website of MoIT, http://www.moit.gov.vn .
The EAEU-Vietnam FTA, initiated in March, 2013, was signed after eight official rounds of negotiations.-VNA
