Vietnam signs free trade agreement with Eurasian Customs Union

Tuesday 23 December 2014 10:05 CET | News

Vietnam and the Eurasian Customs Union (ECU) have concluded negotiations for a free trade agreement (FTA), reports.

The FTA covers trade, customs facilitation, intellectual property, investment, legal issues and lifting legal and technical barriers to trade. Trade negotiations began in March 2013 and the FTA is expected to come into law in early 2015 after both sides have finished finalizing certain technical details.

Vietnamese exports will benefit from preferential tariffs that will help facilitate exports of agricultural products, seafood, textiles and garments, and wooden furniture. Goods imported from the ECU (Russia, Belarus, Kazakhstan) will also receive preferential tariffs, which include machinery, vehicles, and livestock products.

Vietnam and Russia aim to have bilateral trade of about USD 10 billion by 2020. Russia has directly invested approximately USD 2 billion in 104 projects in Vietnam, including USD 1.12 billion in 32 projects in the manufacturing and processing sector. 27% of Russian investment is in the oil and gas sector. Binh Dinh province leads in Russian investment with approximately USD 1 billion, followed by Hanoi with USD 129.5 million, and Ba Ria-Vung Tau province with USD 52 million.

Russia has diversified its agricultural imports since restricting imports from Australia, Canada, the EU, Norway, and the US in response to economic sanctions imposed by the West over the Ukraine crisis. According to the World Trade Organization, agricultural products made up 21.6% of Vietnam’s exports in 2013. Statistics from the General Department of Customs show Vietnam exported only USD 61.3 million of seafood products to Russia in Q1-Q3 2014, a figure set to rise as Russia continues to seek trade alternatives.

In 2015, the Customs Union will be re-branded as the Eurasian Economic Union, and will include the countries of Armenia and Kyrgyzstan.

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Keywords: Vietnam, FTA, ECU, EEU, Russia, Kazakhstan, Belarus, trade, economy, Union, cross border
Categories: Payments & Commerce
Countries: World
This article is part of category

Payments & Commerce