Econ
Vietnam-EAEU FTA confirmed to come into effect in October, 2016
Minister for Trade at the Eurasian Economic Commission Board Veronika Nikishina has confirmed that the free trade agreement (FTA) between the Eurasian Economic Union (EAEU) and Vietnam will take effect on October 5, 2016.
Minister for Trade at the Eurasian Economic Commission Board Veronika Nikishina
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With the formation of the EAEU-Vietnam free trade area, bilateral trade can increase from 4 billion USD at present to 8-10 billion USD. EAEU exporters can save about 40 million USD in tax in the first year the pact takes effect, according to the Eurasian Economic Commission.
Under the agreement, Vietnam will immediately remove import tariffs on 59 percent of the goods from the EAEU, including meat products, wheat flour, alcohol, mechanical equipment and steel products. The tariffs on another 30 percent of goods will be gradually reduced to 0 percent in the transitional period. Indonesia and Singapore also suggested similar FTAs with the EAEU, but procedures will be more complicated, Nikishina said.
The EAEU consists of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The union and Vietnam signed the agreement in Kazakhstan on May 29, 2015 after eight official rounds of negotiations. Economic experts have suggested Vietnam thoroughly assess the impacts that the Vietnam-Eurasian Economic Union (EAEU) free trade agreement (FTA) may exert on specific sectors and markets, in a bid to fully enjoy the benefits brought about by the pact.
The agreement spans a range of fields, from trade to sustainable development and intellectual property, that aims to introduce EAEU member markets and the export opportunities afforded by the deal. Import tax on 4,959 types of goods from the EAEU countries will be reduced to zero immediately when the deal takes effect. In 2018, 144 more tariff lines will be eliminated, raising the number of zero-tax lines to 5,103, or 54 percent of the total.
The EAEU, which comprises Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, signed the FTA with Vietnam in May 2015. The agreement will abolish 90 percent of tax lines, equivalent to 90 percent of bilateral trade turnover.
The FTA reduces tariffs on 90% of all goods traded between Viet Nam and the EEU nations and is expected to boost trade between Viet Nam and the EEU to US$10 billion within the next five years. Trade revenues between Vietnam and the Eurasian Economic Union (EAEU) are expected to increase to 10-12 billion USD by 2020, after a free trade agreement between the two sides takes effect in 2016.
The implementation of the FTA is expected to save EEU exporters US$40-60 million, and Vietnamese exporters US$5-10 million in its first year. The agreement will enter into force within 60 days of being ratified. The content of the agreement can be seen on the website of MoIT, http://www.moit.gov.vn.
