After the VN-EAEU FTA takes effect, the two sides will establish a joint committee, a committee on goods trade, and a subcommittee on origin regulations for the effective implementation and supervision of the agreement.
The MoIT said in a statement this week that the Vietnam-EAEU FTA will become effective on October 5, following confirmation from the Ministry of Foreign Affairs. After the agreement takes effect, Vietnam and the union will establish a joint committee, along with a committee on trade of goods, and a sub-committee on goods origin regulations.
MoIT’s Europe Market Department Director Dang Hoang Hai told a conference in Hanoi last month that Vietnam, as the first FTA partner of the union, would improve the competitiveness of its export goods. The agreement covers a market of almost 183 million people and accounts for 3.2 percent of global gross domestic product.
Vietnam and the union will cut about 90 percent of their lines of tariff. They will slash the rate for nearly 60 percent of tariff lines to zero percent immediately after the agreement becomes effective. Vietnam will immediately lift import duties for EAEU products such as salmon, which is taxed by 10 percent; and tilapia and tuna, now seeing tariff rates of 15-20 percent.
The EAEU will apply a zero percent tariff for Vietnamese products such as uncondensed milk and ice cream with no sugar and sweet substance, which has an import tax of 15 percent; and fresh chestnut and turkey meat, which are subject to import duties of 5 percent and 20 percent respectively.
Hai said Vietnam’s major exports such as garment and textile, footwear, farm produce and seafood will have opportunities due to the tax cuts. Once the FTA takes effect, the two sides would set up a joint committee, a committee on goods trade, and a subcommittee on origin regulations for the effective implementation and supervision of the agreement.
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.
