Monday, October 25, 2010

Vietnam-Russia bilateral trade may touch $10b

After over 10 months of researching, the first working session of the research group to support a free trade agreement (FTA) between Vietnam and a customs union grouping Russia, Belarus and Kazakhstan started on Monday October 11 in Hanoi, said Dang Hoang Hai, head of European Market Department under the Ministry of Industry and Trade (MoIT).

The FTA between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan will bring economic, trade, service and investment benefits to all parties.

The meeting was an important start to allow the parties to carry out the next steps for the signing of the agreement, he said.

Once the FTA signed, the two-way trade between Vietnam and Russia may touch $10 billion.

Currently, the Vietnam-Russia trade still remained low in comparison with the potential and expect of the two countries. As forecasted, the figure would be only $3 billion in 2011.

The idea on building FTA was passed by leaders of Vietnam and Russia in the Vietnamese prime minister's official visit to Russia in last December.

The first meeting will discuss on reference terms for activities of the research group in coming time such as the impacts of FTA to all parties and difficulties as well as challenges in negotiating progress.

At present, Vietnam is the 26th nation mentioning FTA negotiation with Russia. According to Hai, the main reason for Russia to choose this time to negotiate FTA with Vietnam is because in recent years, Asian countries have gained fast economic growth. Additionally, the successful FTA negotiations with Vietnam will be an opportunity for Russia to access Asean countries.

The FTA enables Vietnam to boost its agricultural, seafood and garment products to Russia, and Russia to export fertiliser, oil and gas, atomic energy, heavy industry and cars to Vietnam.

According to MoIT, FTA between Vietnam and Customs Union of Russia, Belarus and Kazakhstan will open prospect on a free trade area of 20.23 million square kilometres, a population of 253.5 million people, and GDP of $1,505 billion.

So far, Russia has not joined the World Trade Organisation (WTO) yet, however, it will not affect the signing of FTA and Russia has also confirmed about this.

In order to boost strategic relations between the two countries, as well as between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan, leaders of Vietnam and Russia agreed to sign an FTA.

Following the roadmap, negotiations will cover three main issues of tariffs, service, plus investment and intellectual property.

Vietnam has up to now signed some FTAs, including membership in the Asean free trade area, as well as FTAs between Asean and China, Japan, Korea, India, Australia and New Zealand.

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