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Vietnam: New Trade Agreement with Eurasia Economic Union

(June 16, 2015) On May 29, 2015, Vietnam signed a Free Trade Agreement (FTA) with Kyrgyzstan and the Eurasian Economic Union (EAEU), which officially comprises Armenia, Belarus, Kazakhstan, and Russia. The agreement was concluded in Kazakhstan and followed eight formal negotiation sessions, in addition to a number of other meetings. It is the first such agreement the EAEU has made with an outside trade partner. (Central Asian Trade Deal Opens Doors, VIETNAM LAW & LEGAL FORUM (June 11, 2015); Free Trade Agreement Between the Eurasian Economic Union and Its Member States, of the One Part, and the Socialist Republic of Viet Nam, of the Other Part (May 29, 2015), EAEU website.)

According to Vu Huy Hoang, Vietnam’s Minister of Industry and Trade, the purpose of the FTA is to create a legal framework for the development of economic ties between Vietnam and the Eurasian nations involved. It is comprehensive, covering most fields of commerce and investment, including e-commerce, environmental protection, finance and banking, government procurement, intellectual property, investment services, and trade in goods and services. (Central Asian Trade Deal Opens Doors, supra.) Vietnam hopes to export farm products, seafood, textiles, footwear, and processed food to the EAEU nations, while those countries in turn may be able to sell technology, mineral resources, and mechanical products to Vietnam. (Id.)

As a result of the FTA, almost all fishery exports from Vietnam to the EAEU will have a zero tariff rate, as will 80% of garments, other textiles, leather products, and footwear. Iron, steel, and some industrial and agricultural products from the EAEU will no longer be subject to import taxes upon entry into Vietnam. Overall, the agreement covers more than 90% of the trade between the two sides. The EAEU’s goal is to increase its trade turnover from Vietnam from the 2014 figure of about US$4 billion to US$10 billion within five years. (Id.)

The View from the EAEU

The Deputy Director of the Trade Policy Committee of the Eurasian Economic Commission, Artyom Anikyev, stated that this first FTA will create a precedent. He further said that Vietnam is the key trading partner for all the EAEU members in Southeast Asia and that the intention is to promote access to other Asian and Southeast Asian markets. (Moscow Conference Discusses FTA Between Vietnam, EAEU, VIETNAM BREAKING NEWS (June 10, 2015).)

Following the signing, a conference was held in Moscow to discuss technical aspects of the treaty. Experts from the Russian Ministry of Economic Development, the Vietnam Trade Office in Russia, and the Vietnamese Business Association in Russia, among others, attended. The topics covered during the June 8, 2015, event included tariff reductions, legal frameworks, and how the FTA will promote trade. (Id.)