The Eurasian Economic Union (EEU) - consisting of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia - and Vietnam signed a free trade agreement (FTA) on May 29, 2015. But it will be hard to turn opportunities into reality if the countries do not remove barriers posed by geographical distances. So establishing a transport route at reasonable cost will boost bilateral exports and the growth of trade and services.
More opportunities for export value growth
Transport cooperation in the Vietnam-EEU FTA is vital to the development of economic and trade cooperation. Addressing the business forum themed “Transport Cooperation: Kazakhstan - Vietnam - Eurasian Economic Union”, Deputy Minister of Industry and Trade Hoang Quoc Vuong stressed opportunities when the FTA comes into effect.
According to the Vietnamese official, in terms of economic trade, the FTA will benefit businesses of Vietnam and EEU countries. In terms of export growth, due to tariff increases and decreases, Vietnam-EEU export value may expand by 10-15% when the FTA takes effect. The supplementation of goods will diversify goods and import markets. This will help FTA countries avoid being too dependent on some markets. “The expansion of markets will follow a roadmap for 5-7 years. So Vietnam has time to prepare to best participate in the FTA”, said Deputy Minister Hoang Quoc Vuong.
The Vietnamese official went on to confirm one more advantage of the FTA: it will have a good impact on trade in services and investment. Joining the FTA, Vietnam will attract more investment in the fields where countries in the union have advantages. At the same time, Vietnamese businesses will have more chance to expand their investment in EEU countries in such fields as light industry, processing, oil and gas.
Finding opportunities in transport
In addition to advantages, there are also challenges that businesses of both sides have to face. These challenges require businesses to carefully study commitments made by each side in the agreement, bilateral payment methods, food safety, and more. Deputy Minister Hoang Quoc Vuong also stressed the geographical distance between Vietnam and EEU countries. The distance requires the establishment of a transport route and a depot system to financially facilitate countries joining the FTA.
During the forum, representatives from Kazakhstan, Vietnam, Armenia, Belarus, and Russia introduced transport cooperation capabilities and opportunities, transport routes between Eurasian and ASEAN markets, as well as business opportunities in EEU countries for Vietnamese enterprises.
There are a good number of transport methods from Vietnam to EEU countries and vice versa, including air, sea, and rail transport. Air transport is often costly. Rail transport is low in cost, while still meeting time allowances.
Introducing the rail system of Kazakhstan, Deputy Chairman of Kazakhstan Temir Zholy company Kanat Alpysbayev revealed that Kazakhstan has more than 2,300 rail routes capable of providing import-export services. He said the rail sector of Kazakhstan can facilitate a seamless flow of import-export goods between Vietnam and EEU countries.
Given the commitments made at the forum, participants believe the Vietnam-EEU market connection - and the resulting facilitation of transport cooperation - will open more cooperation opportunities for businesses in the future.
Source: http://en.qdnd.vn/ - Huu Duong
Keyword : Vietnam, Eurasian Economic Union, boost growth.
