From October 5th, 2016 many items exported to Russia will havezero tariff

After years of negotiations, the Free Trade Agreement between the Eurasian Economic Union and Vietnam would officially take effect from October 5th. 2016. Accordingly, many Vietnamese items exported to the Eurasian Economic Unionwould immediately have tariffs reduced to 0%.

Typically, automobiles imported from Russia would pay a0% tariff on quantities within quotas, specifically, 800 cars in 2016, 850 cars in 2017, 800 cars in 2018. In addition, Vietnam has granted quotas to allow Joint venturecompanies to import 13,500 car components at the tax rate of 0% for 5 years.

Along with that, Vietnam’s fishery, footwear, and certain groups of garment products exported to the Eurasia Economic Union would also immediately get zero tariffs from October 5th.

Speaking at the press conference, Mr. Alexey Popov, Consul-General of the Russian Federation in HCM City, said that the Free Trade Agreement between the Eurasian Economic Unionand Vietnam was the first and only international agreement on the commercial terms of priority thatthe Eurasian Economic Unionconcluded with a third party. The agreement included some groups of content, including multilateral contents (Union - Vietnam) and bilateral investment (Russia - Vietnam). The most important point of these agreementswasthat they did not only cover direct trade issues, but also included measures to protect intellectual property rights, as well as open the State procurement market.

Currently,the Russia - Vietnam Intergovernmental Commissionis consideringplans to further expand economic and trade cooperation between Vietnam and Russia in the coming period, including the contents of switching to local currency payments (Russian Ruble and Vietnamese Dong) in trade between Russia and Vietnam. It would generate support from both sides of projects, including the investment of the two countries.

According to Mr. Alexey Popov, since the Agreement has not taken effect yet, the two countries' trade relations have been stepped up considerably. In particular, in the field of trade, Russian exports to Vietnam in 2015 increased by 15% in USD compared to 2014. Particularly in the first months of 2016, Russian exports to Vietnam have increased by 1.5 times compared to the same period last year.

The Trade Representative of the Russian Federation in Vietnam, Mr. Ivan Gumnikov also said, for the last 5 years, the growth rate of trade between Vietnam and Russia has reached an average of 10%per year. In particular, the Russian commodity exports to Vietnam that have increased the turnover included machinery, mineral, chemical industry, etc. However, Russia imports from Vietnam have also increased, including electronics, garments, agricultural and food products.

According to Mr. Ivan Gumnikov, the Vietnam market was very attractive for Russian investors. Therefore, bilateral trade between Vietnam and Russia reaching $US 10 billion within the next 5 years would be totally possible.