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Viet Nam, Russia plan to resolve export challenges

Update: September, 17/2014 - 09:25
In the first seven months of this year, the total value of exports to Russia reached US$204.9 million, or 1.61 per cent of the total national export value of farm, forestry and seafood exports.— Photo baocongthuong

HA NOI (VNS) — Viet Nam and Russia will promote co-operation to resolve the difficulties of Vietnamese enterprises in exporting goods to the European country, experts said.

Nguyen Binh Giang, head of the Import-Export Department under the Ministry of Industry and Trade (MoIT), made this announcement at a seminar on exporting farm, forestry and seafood products to Russia held here last Friday.

At the seminar which the MoIT organised, Giang also said Russia has been one of the traditional markets for Vietnamese exports, including farm and seafood products, since the 1990s.

However, at present, the total volume of Vietnamese farm, forestry and seafood exports to Russia accounted for a mere 1.5 per cent of Russian demand. In contrast, the exports accounted for 6.1 per cent of demand in China, 23.6 per cent in the United States and 10.7 per cent in Japan, Giang noted.

He added that the total volume of these exports accounted for 50 to 60 per cent of total Vietnamese exports to Russia in 2009 and dropped to 10 per cent in 2012.

In the first seven months of this year, the total value of exports to Russia reached US$204.9 million, or 1.61 per cent of the total national export value of farm, forestry and seafood exports.

Giang attributed the reduction to strict competitiveness in the pricing, as well as design, packaging, quality and transport of exports to other countries receiving the same exports as Russia.

He also cited the strict application of non-tariff barriers, such as regulations on quality, safety and hygiene, on these exports.

Giang observed that Russian tariffs were reduced after the European country became a World Trade Organisation member, but its tariffs on some Vietnamese farm products, including tea and rice, remained high.

According to the Import-Export Department head, the enterprises of the two countries encountered difficulties in processing payments due to difficulties in the conversion of the rubble and dong currencies.

Nguyen Ton Quyen, general secretary of the Viet Nam Wood and Forestry Product Association, said the volume of wood and forestry exports to Russia remained small because enterprises in the domestic wood industry lacked information on the market and their partners in Russia, including customers' preferences and tariff policies.

The cost of transporting wood products from Viet Nam to Russia remained high and has sparked an increase in selling prices, Quyen noted.

Vietnamese enterprises also faced payment challenges with Russia partners because they lacked knowledge on the European country's payment policies, especially with regard to the rubble, and often gave and received payment in US dollars and Euro, he added.

If the enterprises succeed in entering the Russian market, the export value of wood and forestry products from Viet Nam can reach $10 billion, which is higher than the current $6 billion to $7 billion, Quyen said.

A representative of the Viet Nam Fruit, Vegetable and Farming Product Corporation said most Russian importers have deferred payment within a 60-day period without any guarantee, so Vietnamese enterprises have faced considerable risks and were discouraged from increasing exports to Russia.

The An Binh Import and Export Company, which specializes in rice exports, complained of the high inspection fee for exports to Russia because the European country had only one office in charge of inspecting the goods.

Giang said an increase in Vietnamese exports to Russia would require support from the Russian government, concerned Vietnamese ministries and offices and the enterprises of the two countries.

He added that Russia should approve the list of eligible Vietnamese enterprises exporting goods to Russia and promote cooperation with Viet Nam in building flexible converting mechanisms for the Russian rubble and Vietnamese dong.

These measures will create favourable conditions for the processing of payments among enterprises of the two countries and ensure the competitive ability of Vietnamese companies, Giang noted.

Meanwhile, Viet Nam's ministries and sectors should conduct research on the Russian market and provide the information to domestic enterprises and associations. They should also support the trade promotion activities of domestic enterprises and associations in the Russian market.

The MoIT said Viet Nam and the Customs Union that includes Russia, Belarus and Kazakhstan were currently conducting negotiations on a free trade agreement calling for preferential tariffs on the imports and exports of these countries.

Maxim Golikov, director of the Trade Representative Office of Russia in Viet Nam, revealed that he was expecting the agreement to be signed by year-end and to bring about a reduction or scrapping of tariffs on some goods, reported the Cong Thuong (Industry and Trade) newspaper.— VNS

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