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EAEU FTA comes into effect

Released at: 08:36, 06/10/2016

EAEU FTA comes into effect

Photo: Hai Van

Effective from October 5, FTA to cut tariffs and boost trade and investment between five EAEU members and Vietnam.

by Hai Van

A press conference featuring ambassadors from the Eurasian Economic Union (EAEU) and Vietnamese representatives was held on October 5 in Hanoi to mark the Vietnam - EAEU Free Trade Agreement (VN-EAEU FTA) officially coming into effect.

“The FTA is set to promote the development and strengthen the trade relationship between EAEU countries and Vietnam and create favorable conditions to seek investment from each other,” Ambassador of Kazakhstan in Vietnam, H.E. Beketzhan Zhumahanov, was quoted as saying.

This is the first time the EAEU has signed an FTA with a foreign country and will strengthen relations between the two parties.

Ambassador of Russia in Vietnam, H.E. K.V. Vnukov, believes that “the VN-EAEU FTA will increase trade volumes and bring many opportunities in various sectors, including investment, technology and human resources.”

The FTA covers matters pertaining to trade, services, investment and the movement of citizens. Annual bilateral trade may increase from the current $4 billion to $8-10 billion. EAEU exporters will save about $40 million in taxes in the first year of the pact, according to the Eurasian Economic Commission.

Vietnam will immediately remove import tariffs on 59 per cent of goods from the EAEU, including meat, flour, alcohol, mechanical equipment and steel products. Tariffs on another 30 per cent of goods will be gradually reduced to 0 per cent during the transitional period.

The FTA also provides for intellectual property rights protection, e-commerce cooperation, government procurement procedures, the establishment of mutual principles on the protection of competition, and customs procedures.

Vietnam is now able to enter a large market of great potential, with total GDP of some $2.2 trillion and 183 million consumers. Products from the EAEU also now have access to Vietnam’s 90 million people.

General Director of the European Market Department under the Ministry of Industry and Trade, Mr. Dang Hoang Hai, believes “the VN-EAEU FTA is a breakthrough for the economic relationship between Vietnam and EAEU countries.”

The EAEU includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The agreement was signed in Kazakhstan on May 29, 2015 after eight official rounds of negotiations.

A bilateral decree between Vietnam and Russia establishing assembly lines producing famous Russian motor vehicles also came into effect on October 5. The vehicles will be sold in Vietnam and ASEAN countries.

According to Russia’s customs department, in 2015 bilateral trade turnover between the two countries reached $3.9 billion, up 4 per cent year-on-year. In the first seven months of this year it stood at $2 billion, an 11 per cent increase year-on-year. Vietnam is Russia’s largest trading partner in ASEAN.

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