Vietnam-EAEU FTA offers chance to increase export of Vietnam’s farm produce.

Vietnamese cashew nut accounts for large market share in Russia (Illustrative image: Dinh Hue/VNA)

Hanoi (VNA) - Vietnam has a great opportunity to increase exports of agricultural products, seafood and food to the EAEU market (which includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan). The newly applied tax regulations are a golden chance for businesses to take advantage of their competitive advantages, actively promote their products and exports to the EAEU market.

Coffee, cashew nuts, pepper, and dried mango are the Vietnamese products which held the largest import market share in Russia in 2020.

Cashew nuts imported from Vietnam accounted for 83.3% of Russia's total cashew nut import turnover of 80.3 million USD.

Vietnam also took the lead in coffee, accounting for 20.7% of Russia's coffee import turnover of 652 million USD in 2020.

Last year, Vietnam also ranked 5th among seafood exporting countries to Russia, in which Vietnam’s fish fillet product export turnover ranked first among exporting countries to Russia. That of dried and smoked fish products ranked second.

Since the Vietnam-EAEU FTA took effect in 2016, Vietnam’s agricultural and seafood exports to Russia have grown at an average 20 percent per annum.

A workshop for discussing opportunities for Vietnamese businesses to increase exports of agricultural and aquatic products to Russia and the Eurasian Economic Union (EAEU) was held by the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Trade Office in Russia and the Russian trade representative office in Vietnam, on November 2 in Hanoi. Nguyen Tuan Hai, Director of the International Relations Department of VCCI, said the fruitful political and diplomatic relations between Vietnam and Russia will be a foundation and favourable condition for economic, trade and investment relations between the two countries to develop strongly in the coming time.

Since the Vietnam-EAEU FTA officially became effective in October 2016, the deal has become a solid foundation for trade and investment cooperation between the two countries, he said. He added that this pact also serves as an effective support tool for Vietnamese enterprises to promote the export of their strong products, especially agricultural and aquatic, to the Russian market as well the EAEU.

He further said the EAEU removed 75 developing countries, including Vietnam, from the list of generalised scheme preferences (GSP) from October 2021.

According to Duong Hoang Minh, Vietnam's trade counselor in Russia, the list included Vietnam’s competitors in exporting agricultural and aquatic products to the Russian and EAEU markets, namely China, India, Thailand, Malaysia, Indonesia, Turkey, Brazil, Argentina, Chile, and Peru.

“While goods from other countries exported to the EAEU and Russia will be subject to the normal import tax rate, Vietnamese goods exported to these markets are entitled to preferential tax rates as committed in the Vietnam-EAEU FTA. After five years of implementing the agreement, many Vietnamese products have received tax incentives of zero percent," said Duong Hoang Minh.

With tax incentives under the Vietnam-EAEU FTA, Vietnamese enterprises will have the opportunity to make a breakthrough to better compete when exporting goods to Russia and the EAEU.

Tsygankov Kirill, of the Russian trade representative office in Vietnam, said that economic and trade cooperation is an important factor in the comprehensive strategic partnership between Russia and Vietnam. He noted that since the Vietnam - EAEU FTA took effect in 2016, 98 percent of tariff lines have been cut to zero percent.

He spoke highly of the prospect of Vietnam's fresh fruit export to Russia, as the Southeast Asian country boasts a variety of fresh tropical fruits and nutritious vegetables.

He recommended that Vietnamese businesses transport goods to Russia by rail, saying that Russia's railway company and Vietnam's Railway Transport and Trade JSC (RATRACO) have successfully tested a container line connecting Vietnam and Russia via China's territory, which takes around 2-3 weeks.

For high-value and perishable goods, air freight may be considered, he said.

In the future, if the exchange of goods increases between the two countries, it will be necessary to organize direct transport of goods by sea without having to transit in ports in Hong Kong or mainland China and the Republic of Korea. This would significantly shorten the time of the transportation of goods, he said.

Kirill advised Vietnamese enterprises to be more active in promoting their goods in the Russian market through e-commerce platforms./.