Vietnam Eyes Increased Eurasian Economic Union Exports
Ta Hoang Linh, a director of the European Market Department under Vietnam’s Ministry of Industry and Trade (MoIT), has said that the Eurasian region of 28 countries, stretching from Eastern Europe to Central Asia, is a significant potential export market for Vietnam.
Being flexible in accessing distribution systems, overcoming logistical difficulties, and making good use of free trade agreements (FTA) are important factors for Vietnamese goods to better access the Eurasian market, she said.
According to statistics of the Vietnamese General Department of Customs, two-way trade between Vietnam and the Eurasian region hit $12.7 billion in 2020, representing a year-on-year increase of 20.4% and accounting for 2.3% of Vietnam’s total export turnover.
Despite difficulties caused by the COVID-19 pandemic, the two-way trade in the first 11 months of 2021 reached $12.7 billion, 13.1% higher than 2020.
According to Vietnamese Trade Counselor in Russia, Duong Hoang Minh, Russia is one of the main partners of Vietnam in the Eurasian market. Russians are becoming more interested in Vietnamese food, he said, noting that dried fruits such as mango and custard apple have made inroads into the Russian market.
Recently, the Eurasian Economic Union (EAEU) removed 76 countries, including many of Vietnam’s export competitors to Russia and the EAEU, including China, Malaysia, Turkey, Brazil, Peru, and Chile, from the list of tariff preferences and therefore improving Vietnam’s price competitiveness to the EAEU market. The EAEU includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia.
Five years after implementing the Vietnam-EAEU FTA, most of Vietnam’s goods exported to the region are entitled to zero percent tax rate, Minh said, adding that this is an advantage for Vietnamese businesses to expand their exports, especially agro-forestry-aquaculture products, to Russia.
In order to fully tap incentives from FTAs and promote import-export growth with the Eurasian market in general and the Russian market in particular, Vietnamese enterprises should actively conduct market survey, join more trade fairs in Russia, and cooperate with Vietnamese firms operating in the country to introduce products in other EAEU member countries, Minh said.
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Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at email@example.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.