Tin mới
Russia's WTO membership and its impact on Vietnam's trade (07/8)
07/08/2012 - 13 Lượt xem
Traditional market
Russia is a traditional, potential export market of Vietnam while Vietnam is an important link between Russia and the Asia-Pacific market.
Last year, trade between the two countries reached US$2.12 billion and that included US$1.38 billion worth of Vietnam's exports to Russia, up 66.2 percent compared with 2010. In 2011, Vietnam for the first time had a trade surplus with Russia. In the first six months of 2012, Vietnam exported to Russia US$681.6 million worth of products, up 34.2 percent compared with the same period last year, and imported US$453.6 million worth of Russian products, up 45.9 percent. So, bilateral trade totaled US$1.135 billion, equal to 53.5 percent of 2011's result. Vietnam continues to have a trade surplus with Russia and the US$3 billion bilateral trade target set for 2012 is expected to be feasible.
Regarding the structure of imports, exports between the two countries, Vietnam and Russia do not compete but complement each other with their comparative advantages. Vietnam exports to Russia seafood, fruit and vegetables, coffee,
tea, textiles and garments, footwear, rice, telephone and components,
fiber, wood and wood products. It imports from Russia products such as
steel and iron, fertilizer, machinery, equipment and spare parts, and
petroleum.
Incommensurability
However, Vietnam's exports to Russia just account for 0.5 percent of the total value of products imported by Russia. And Russia's exports to Vietnam account for merely 0.7 percent of the total value of products imported by Vietnam.
Russia
is an open and not difficult-to-please market - this requires Vietnam
to compete with stronger economies that are present in this market.
So far, there
has been almost no center to distribute Vietnamese products in Russia.
Very few Vietnamese companies have opened a representative office or a branch in Russia.
When exporting to Russia, Vietnamese businesses still meet difficulties relating to legal procedures, payment, access to the domestic distribution network of Russia and verification regulations. Vietnamese businesses still lack information about the Russian market.
New opportunities
Russia is not a normal WTO member because it is a financially strong economy, a large market with great potential in terms of natural resources. The implementation of Russia's commitments with the WTO will bring opportunities that Vietnam can grasp to promote exports.
Vietnamese agricultural, forest and aquatic product exports to Russia currently account for about 50 percent of the total value of Vietnam's exports to this market. These products belong to the group of goods which are offered a tax reduction and subject to no trade barriers. In the past several years, the value of wood and wood product exports to Russia has increased. In the near
future Vietnam will be able to boost wood and wood product exports to
Russia thanks to tariff cuts. Low tax rates will also be applied to
computers and components, household-used electronic appliances, mobile
phones and components, which currently account for 30 percent of Vietnam's exports to Russia.
Fertilizer, steel, iron and petroleum, which account for 80 percent of Vietnam's imports from Russia, will benefit from low import tax rates applied by Vietnam.
Russia is a member of the Customs Union of Russia, Belarus and Kazakhstan which was established on January 1, 2010. The customs boundaries between these
three countries were eliminated on July 1, 2011. If Vietnam signs a
Free Trade Agreement (FTA) with Russia, Belarus and Kazakhstan, there will be opportunities for it to increase trade with these three countries and other nations which used to be members of the former Soviet Union.
Construction of the Hanoi-Moscow Hotel, Trade and Culture Center, the largest overseas trade center of Vietnam, will finish next year. This center will play the role of a liaison office to link the business communities of the two countries. It will be the place where Vietnamese companies can open their representative offices or showrooms to present their products in Russia.
However, to grasp opportunities, Vietnamese goods have to complete more fiercely with products of other WTO member countries which are present in the Russian market. This requires new efforts of each business as well as specific policies at the macro level.
Orientations
Vietnam and Russia are looking towards the bilateral trade targets of US$5 billion set for 2015 and US$10 billion set for 2020. To realize these targets, Vietnam must:
- Help domestic businesses expand their distribution networks by opening branches, representative offices, showrooms in the Russian market.
- Intensify trade promotion activities in various forms; update domestic businesses on information about the Russian market, prices and consumer tastes; encourage them to improve product quality, diversify their products and offer competitive prices.
- Encourage Vietnamese localities to cooperate with relevant zones of Russia; develop forwarding and transportation services to the Far East region; improve the trade credit situation.
- Accelerate negotiations to achieve mutual recognition of import, export assessment results as soon as possible.
- Encourage the Vietnamese business community in Russia to take part in this process./.
Source: VEN.
- Encourage the Vietnamese business community in Russia to take part in this process./.
Source: VEN.
