Vietnam and the Customs Union, currently comprising of Russia, Belarus and Kazakhstan, are expected to complete negotiations for a free trade agreement (FTA) this year, giving a boost to Vietnam’s garment exports, Vietnam Plus reported citing a report by the Ministry of Industry and Trade's Vietnam Economic Times.
So far, both sides have completed four rounds of negotiations for the FTA, and the fifth round of talks are scheduled to take place from next week. Both sides expect the negotiation process to get completed in the later part of the current year, according to the report.
The FTA is expected to remove or relax many non-tariff barriers, including customs procedures, payment of goods and technical regulations, for the Vietnamese goods for entry in the Customs Union market. In addition, many taxes would be reduced, paving way for Vietnamese businesses to have greater access to a large market with preferential tariffs.
Last year, Vietnamese textile and garment exports to Russia were valued at US$ 135.6 million, registering a growth of 11.02 percent year-on-year, according to the data from the Vietnam Customs.
Russia has a population of 143 million, and with the expected signing of the FTA, it would become a key market for Vietnamese textile and clothing exports in future, according to the Vietnam National Textile and Garment Group (Vinatex).
Pham Quang Niem, Vietnam’s Trade Counselor in Russia, however, warns that Vietnamese businesses would face severe competition from other countries providing similar products, as Russia is an open and easy-to-please market.
He suggested that Vietnamese apparel enterprises would have to assure a high product quality, improve their product design, and also register their product trademarks in Russia.