Russian market offers new opportunities for Vietnamese exporters

News 08:15 13/09/2014
(VOV) Russia will reduce import taxes on some Vietnamese goods by 30-50 percent under its new tariffs and quotas commitments after joining the WTO in December last year. Russia considers FTA with Vietnam a breakthrough in ASEAN

Vietnamese businesses will find it easier to export agricultural products to the Russian market as the average import taxes on these products will drop to 10.8 percent from the current 13.2 percent.

Deputy Minister of Industry and Trade (MoIT) Hoang Quoc Vuong says the traditional Russian market, with its large consumer base, has great potential for Vietnamese businesses to make a profit. Russia is not a demanding market for staples imported from Vietnam such as garments and textiles, footwear, farm products and seafood. tea, coffee, fruit, vegetables, rice and other agricultural products.

The Vietnamese MoIT says the unstable farming caused by less government subsidies and fuel price hikes has left its agricultural sector in the lurch to meet domestic consumer demands because Russia depends heavily on imports.

Russia is considered an open and important market among the 150 nations and territories which import farm products from Vietnam. Its main imports items in the first half of this year were seafood, rubber, coffee and cashew nuts.

Russia’s agricultural sector offers a wealth of opportunities for foreign exporters and investors because it has a high demand for milk cows, livestock, seeds and agricultural services.

However, the country’s strict legal regulations on certifying the origins of animals and plants pose huge challenges for exporters.

Complicated payment mechanisms, a lack of market information and tariff and non-tariff barriers, in addition to convoluted legal formalities, have prevented some Vietnamese goods from entering the Russian market.

The bottom line is that a legal corridor should be created to facilitate the exchange of goods between the two countries, particularly agricultural and aquatic products.

To boost the export of farm products to Russia, it is essential to diversify processed products, ensure food hygiene and safety, offer reasonable prices and enhance the exchange of information between State management agencies, Vietnamese exporters and Russian importers.

Deputy Foreign Minister Bui Thanh Son emphasizes the need to introduce new Vietnamese products to the Russian market and focus heavily on trade promotion in order to compete with similar products from other countries.

Vietnamese businesses need to pay more attention to promoting trade through fairs, exhibitions and representative offices in Russia and creating import-export links.

The Vietnamese Ministry of Agriculture and Rural Development (MARD) and its Russian counterpart should work towards signing a Vietnam-Russia Free Trade Agreement (FTA) ahead of schedule, as well as a Vietnam-Russia-Kazakhstan-Belarus FTA later on to establish a legal foundation for Vietnam to boost exports to Russia and reduce its future import surplus.

Vietnamese businesses must also ensure the quality of their products from the production to processing and packaging chains to meet Russia’s strict consumer demand for a wide range of imported products.

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