VIETNAM – EURASIA ECONOMIC UNION FREE TRADE AGREEMENT

VIETNAM – EURASIA ECONOMIC UNION FREE TRADE AGREEMENT

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From our branch IC&Partners Asia

The Free Trade Agreement – FTA – between Vietnam and the Eurasia Economic Union (EAEU) was signed in Burabai, Kazakhstan on May 29th 2015 after more than two years of negotiation, opening up a new chapter in the partnership between Vietnam and the Union as well as each EAEU member in particular: Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.

The FTA covers trade, customs facilitation, intellectual property, investment, legal issues, military industries, rules of origin, animal and plant quarantine, and lifting legal and technical barriers to trade.

Vietnamese exports will benefit from preferential tariffs that will help facilitate exports of agricultural products, seafood, textiles and garments and wooden furniture. Goods imported from the Customs Union will also receive preferential tariffs, and include machinery, vehicles, and livestock products.

With total population of about 175 million and a GDP of over 4 trillion USD, the EAEU plays an important role in the growth of a number of former Soviet Union states towards a uniformed economic space. After this FTA becomes effective, two-way trade between Vietnam and the EAEU is expected to reach up to 12 billion USD in 2020 (with Russia accounts for 10 billion USD). Vietnam’s exports to the union are estimated to rise between 18-20 percent per year.

The FTA makes Vietnam the first international partner to sign such deal with the Union, adding that the agreement also manifests a strategic vision of the Union on developing ties with the dynamic Asia-Pacific region in general, and Vietnam in particular; especially when Vietnam is speeding up negotiations for FTAs with many large partners, which will create favorable conditions for enterprises from EAEU’s member countries to invest in Vietnam and benefit from opportunities to access various huge markets such as the US, China, Japan, EU and Australia.

The FTA will greatly help boost economic growth in each country, fostering bilateral trade, service and investment relations and expanding regional cooperation.