Three years on since the implementation of the Eurasian Economic Union Free Trade Agreement (EAEU FTA), both sides have stated their confidence that the agreement has served to make an important contribution to the trade growth between Vietnam and EAEU member states.
Experts believe that the two sides should go further and remove any further barriers in order to fully tap into the opportunities brought by the FTA.
During the third session of the joint committee on the Vietnam – EAEU FTA between the Minister of Industry and Trade Tran Tuan Anh and the Minister for Trade of the Eurasian Economic Commission Veronika Nikishina, both sides expressed their delight at the positive results after three years since the implementation of the EAEU FTA.
Trade growth enjoys annual rise of 30 per cent
During the 2011-2015 period, before the EAEU FTA had come into effect, average growth turnover between the two sides stood at 5 per cent annually. This figure drastically increased following the implementation of the EAEU FTA in late 2016 with the annual average growth of approximately 30 per cent.
According to statistics released by the General Department of Vietnam Customs, 2018 saw import-export turnover between Vietnam and the EAEU surge by 26.2 per cent to US$4.9 billion on-year. Of the figure, the nation exported US$2.7 billion worth of goods and imported US$2.2 billion worth of commodities.
During the first nine months of the year, trade turnover between the country and the EAEU reached US$3.7 billion , with Russia making up the majority of business with 92 per cent, followed by the Republic of Kazakhstan with 5.5 per cent, and the Republic of Belarus with 2 per cent.
Meanwhile, trade turnover for the whole year is estimated to stand at nearly US$5 billion, including US$3 billion from Vietnam's exports to the EAEU and close to US$2 billion from its imports from the union.
Eurasian Minister for Trade Nikishina said that the EAEU market currently has great demand for products of Vietnam's strength, such as garments and textiles, footwear, electronics, farm produce such as rice, pepper, fruit and vegetables, and seafood.
The key export items of EAEU members to the Southeast Asian country are oil and petroleum, machinery, chemicals, iron and steel, and consumer goods. Most notably, the product structure between Vietnam and the EAEU supplement each other.
With regard to the benefits brought by the FTA, Minister Anh noted that the FTA has strategic significance and creates a legal framework and favourable conditions which help to develop trade ties between the two sides.
Despite the FTA helping maintain stable trade growth at a high level, Minister Anh underlined the need to eliminate non-tariff barriers by simplifying administrative procedures via an online portal, removing obstacles in issues related to the certificate of origin, and conducting negotiations on mutual recognition in the agricultural field.
Further co-operation necessary to reap full benefits
During the third session of the joint committee on EAEU FTA, Vietnam proposed that both sides should work together and aim to abolish Technical Barriers To Trade (TBTs), attempt to implement the recognition of the equivalence of sanitary and phytosanitary measures, as well as making changes to articles within the Rules of Origin Chapter.
The Vietnamese Minister said that the country’s ultimate goal is to boost the export of farm produce to the EAEU market. This can be seen as the nation has requested that the EAEU drastically increase its quota of rice, in addition to the number of businesses that are eligible to export seafood products to the highly lucrative market.
In return, the EAEU side are keen to boost the entry of its goods into the Vietnamese market, especially regarding products such as sparkling wine, means of transport, agricultural machinery, and the use of white asbestos.
Minister Nikishina has the country open up to sparkling wine, poultry meat, and beef from EAEU nations. In addition, both sides must co-operate closer in such fields as automobile, agricultural machinery, and pharmaceuticals.
Following three years since the agreement was first implemented, both sides can consider early negotiations aimed at exchanging goods and optimizing the benefits of the FTA.
Minister Anh emphasized that obstacles should be removed in the near future as a means of accelerating bilateral trade and investment between both sides, whilst simultaneously consolidating businesses’ confidence.
He added that within the Southeast Asian region, Singapore became the second nation after Vietnam to sign an FTA with the EAEU on October 1.
In addition, the EAEU has stepped up trade co-operation with China, whilst conducting FTA negotiations with Israel, Serbia, Egypt, and India.
These moves indicate that local enterprises must be proactive in order to enjoy easier access to the market, while also striving to improve product quality to compete with other nations when attempting to gain entry to the EAEU market in the future.