Vietnam-EAEC FTA: a great opportunity for cooperation expansion

(VOVworld) – Prime Minister Nguyen Tan Dung will arrive in Kazakhstan on Friday to attend the signing ceremony of the Vietnam-Eurasian Economic Community Free Trade Agreement. The free trade agreement with Vietnam - the Community’s first – creates a stable and favorable legal framework for economic ties between Vietnam and the Eurasian Economic Community.

Vietnam-EAEC FTA: a great opportunity for cooperation expansion - ảnh 1
Kazakhstan's Deputy Minister of Foreign Affairs welcomed Prime Minister Nguyen Tan Dung at the airport (photo: VGP)

The Eurasian Economic Community (EAEC) consists of Russia, Belarus, Kazakhstan, and Armenia. With a population of 170 million people and a GDP of 4 trillion USD, the EAEC is a lucrative market for Vietnamese enterprises.

Balancing interests

In May, 2014, in Kazakhstan’s capital Astana, the Presidents of Russia, Belarus, and Kazakhstan signed an agreement to form the Eurasian Economic Union (EEU) which took effect on January 1, 2015. The Union admitted Armenia and Kyrgyzstan to become the Eurasian Economic Community (EAEC) on January 1, 2015.

Dang Hoang Hai, Head of the European Market Department, of the Ministry of Industry and Trade and Chief technical negotiator said: "With a traditional relationship and good mutual understanding, in bilateral negotiations the two sides respected each other’s interests and special characteristics and tried to balance everyone’s interests. The FTA has taken into consideration both the interests of EAEC member countries and Vietnam."

Free customs mechanism

The Vietnam – Eurasian Economic Community FTA will create a stable and favorable legal framework for economic development of the signatories.

Economists say the agreement stipulates open customs regulations. Besides tariff reductions and exemptions for listed commodities, each country can maintain customs protections for their most sensitive commodities.

Vietnam has obtained advantageous conditions for its high priority commodities. Mr. Hai again: "Nearly 100% of our fisheries exports to the EAEC will enjoy a 0% tax rate. The 0% tax rate will applied to 80% of our garments, textiles, leather, and footwear."

For the EAEC’s high priority commodities like iron, steel, and certain types of industrial and agricultural products, Vietnam has agreed to remove its import tax. We have a roadmap to gradually open the market for certain catergories of agricultural products.

Opportunities for trade cooperation

It’s predicted that by 2020, trade volume between EAEC members and Vietnam will be much higher than at present. Vietnam will be assisted in implementing its socio-economic development plan, particularly in energy, infrastructure building, transport, and natural resources exploitation.

Vietnam and the EAEC will not compete but rather complement.

Trade revenue between Vietnam and the EAEC is about 3 billion USD per year. The FTA is expected to boost their trade and economic relations. Vietnam is an active ASEAN member who can be a gateway for the EAEC to penetrate ASEAN and the Asian market.

Prime Minister Nguyen Tan Dung’s visit to Kazakhstan to attend the FTA signing ceremony is a significant milestone in Vietnam’s international integration process.

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