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Vietnam - EEU Free Trade Agreement signed

Mon, 01 Jun 2015. Last updated Thu, 25 Jun 2015 09:07

Recently, Vietnam - EEU Free Trade Agreement was signed in Republic of Kazakhstan. It is a great significance to Vietnam economy in the future, especially in term of agricultural products along with other strong products of the economy.

After more than two years of intense negotiations, on May 29 at Burabai Province, Republic of Kazakhstan, Prime Minister Nguyen Tan Dung, Eurasian Economic Union and Prime Ministers of country members including Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan signed a formal Free Trade Agreement. The agreement has a strategic significance for both Vietnam and the Eurasian Economic Union, opening a new page in relations between Vietnam and EEU in general and with the individual country member in particular. The Vietnam - EEU Free Trade Agreement is an historical event. It is not just because Vietnam is the first partner signing the agreement with Eurasian Economic Union, but also provides the opportunity to export strong commodities of Vietnam economy such as products of agriculture, fisheries, textiles, footwear, furniture and some processed products.

An important part of the Vietnam - Eurasian Economic Union FTA is that country members will apply the tax rate of 0% for all Vietnam seafood products immediately after the effectiveness of the agreement. This is the most practical demonstration of efforts to expand export markets, guaranteeing the outlets for Vietnamese goods, especially agricultural products that are focused on implementing drastically by the government. Free Trade Agreement between Vietnam and the Eurasian Economic Union will definitely create a large and sustainable market, creating an excellent opportunity to consume the commodity groups that Vietnam has fundamental interests such as agricultural products and industrial goods (textiles, footwear, furniture and some processed products).


Eurasian Economic Union


Vietnam also agreed to open the market for some routes of livestock products, industrial products including machinery, equipment, and vehicles... On one hand, these goods are not competitive with Vietnam products; on the other hand, they will contribute to the diversification of domestic consumer market. For Vietnam agricultural products, Vietnam agreed to open the market of milk and dairy products, along with some cereal products. Although this is the subject of priority items from the Union, in the present context, due to the agricultural production of the partners primarily serving domestic demand and less focusing on agricultural exports. Therefore, it is forecasted that in the first 5 years of implementing the Vietnam - EEU FTA, Vietnam agriculture will not be significantly affected by the import of agricultural products from the country members of Eurasia Economic Union.

Along with the elimination of tariffs, Vietnam and coalition members of Eurasian Economic Union will actively implement measures of food safety and animal and plant quarantine. These measures contains the recognitions equivalent to measures or management systems in related fields, mutual recognition of the concept of adaptation to regional conditions, to use the audit results, information of the international organizations, promoting cooperation, implementing initiatives, trade facilitation, and technical assistance, establishing effective mechanisms for consultation between the two sides. These are direct measures to remove barriers to goods from country members can penetrate respective markets of each other quickly and efficiently.


Member states of the Customs Union and the Single Economic Space


When the agreement takes effect, Vietnam and the members of Eurasian Economic Union shall afford each other the commodity market opening rate of up to about 90% of tariff lines, equivalent to over 90% of trade bilateral revenue. The economists forecasted that export turnover between the two sides would reach 10-12 billion USD in 2020, i.e. may increase 5 times compared to that in 2014. Forecast exports from Vietnam to the alliance will increase annually about 18-20%.

Speaking at the signing ceremony, Prime Minister Nguyen Tan Dung stressed that Vietnam and members of the Eurasian Economic Union (EEU) have a good traditional friendship. Vietnam is always grateful for the valuable assistance that the governments and the peoples of Union's members for Vietnam in the struggle for independence in the past and building and developing the country today. In terms of economy, major objectives of Vietnam in negotiating, signing and economic integration commitments is to achieve the fundamental interests of the economy by improving the competitiveness of domestic production, providing opportunities for promoting trade, services, investment, diversification of export markets, and avoiding the dependence on one market. After the signing ceremony, the two sides will continue to complete the internal procedures for ratification of the agreement to force it effect in the shortest time.

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