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Results of the first year of the Free Trade Agreement between Vietnam and the EAEU

Results of the first year of the Free Trade Agreement between Vietnam and the EAEU

Over the first 10 months of operation of the Free Trade Agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU), exports of goods from the Union countries to Vietnam increased by 32% compared to the same period in 2015-2016. Supplies of Vietnamese products to the markets of the EAEU grew by 28%. This was reported by the EEC Board Member - Minister in charge of Customs Cooperation of the Eurasian Economic Commission (EEC) Mukai Kadyrkulov in Hanoi at a press conference dedicated to the first anniversary of the entry into force of the aforementioned Agreement.

The EEC Minister noted that new, previously unforecasted markets opened for certain types of goods. For example, Vietnamese radio and navigation equipment has become extremely popular in the Union - its import during the period of the FTA has grown by more than 900 times.  A similar situation is in the market for paper and cardboard from the EAEU. The supplies to Vietnam increased by 2,700 times.

During the period of the FTA, the EAEU zeroed out the rates of import customs duties for Vietnam for 43% of the total amount of tariff lines of the Common Customs Tariff of the Eurasian Economic Union (CCT EAEU). According to Mukai Kadyrkulov, during 10 years, duty-free import of goods to the common Union market for Vietnamese exporters will be expanded and finally cover 90% of lines of the CTT EAEU.

Minister for customs cooperation drew attention to the fact that cooperation between the EAEU countries and Vietnam is not limited to the standard exchange of finished goods and components.

"Our countries are establishing joint production. A factory for production of Belarusian trucks MAZ with a capacity of up to 1,500 units a year is being built in Vietnam. The parties agreed to achieve localization of production at the level of 40% in four years, engaging local Vietnamese components. A few joint Russian-Vietnamese and Belarusian-Vietnamese automotive enterprises can be established in future, that will cover the needs of markets of the ASEAN countries," the EEC Minister said.

Mukai Kadyrkulov also spoke about the upcoming launch of information exchange in test mode between customs bodies of the EAEU countries and Vietnam.

“Customs bodies of the Union countries and Vietnam are working on information exchange on goods and vehicles that move between our countries under the FTA. The third round of negotiations has just concluded at the site of the General Customs Administration of Vietnam. We have agreed with our Vietnamese counterparts on all the principal issues. I think that next year we will start to share customs information in trial mode for a limited group of products. Communication between customs bodies will enhance confidence of the countries in supply chain security management systems. This, in its turn, will facilitate trade between our countries," the EEC Minister said.

For reference, the Free Trade Agreement between the EAEU countries and Vietnam entered into force on October 5, 2016. Vietnam became the first trade partner with which an agreement on preferential trade was concluded. Today, the EEC is negotiating free trade conditions with seven other countries, including Iran, Israel, India, Serbia, and Singapore.