Photo: Duc Anh
FTA with Eurasian Economic Union to take effect on October 5.
The free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU) will officially come into effect on October 5, according to the European Market Department under the Ministry of Industry and Trade (MoIT).
Negotiations over the VN-EAEU FTA were launched in March 2013 and consisted of eight official sessions and many meetings. On May 29, 2015 the agreement was signed in Burabay, Kazakhstan.
On January 1, 2015 the former Eurasian Customs Union became the EAEU, constituted by Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.
According to an initial assessment by the EAEU, after the agreement takes effect trade between the two parties will reach $10 to $12 billion by 2020. Vietnam estimates trade turnover will increase by 18 to 20 per cent annually.
The signing of the FTA will create an open and sustainable legal framework for economic development between the two sides and promote bilateral relations and exchange measures.
When the FTA comes into effect, 4,959 import tariffs, or 52.4 per cent of the total, will be removed immediately. Tax tables are being created for different stages and initially Vietnam will prepare tables for the 2016-2018 period.
In 2018, 144 tariff lines will be completed eliminated, increasing the number of zero-tax lines to 5,103, or 54 per cent of the total.
Seventeen tariffs will be subject to quotas on two types of goods: eggs and unprocessed tobacco. The tax rate on eggs will be 15 per cent in 2016, 7.5 per cent in 2017, and 0 per cent in 2018, while the tax on unprocessed tobacco will be 7 per cent in 2016 (excluding tobacco with Code No. 2401.30.10, which is taxed at 5 per cent), and 5 per cent in 2017 and 2018.
Quotas on these goods can be included or excluded from the quota Vietnam committed to in the WTO. MoIT will issue particular guidance on quotas.