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Vietnamese firms urged to increase exports to Russia

Update: February, 01/2012 - 08:52

The commercial counsellor at the nation's embassy in Moscow, Vu Van Quang, spoke to Thoi bao Kinh doanh (Business Times) about demand for Vietnamese products in Russia.

What is your assessment of Viet Nam-Russia trade relations?

A trade agreement was signed between Viet Nam and Russia during Prime Minister Nguyen Tan Dung's visit to Russia in December 2009. The two sides have signed three strategic agreements on energy, oil and gas and trade.

In terms of trade, both countries have agreed to discuss the signing of a free trade agreement. On energy, Russia reached an agreement to build Viet Nam's first nuclear power plant. It will lend funds to Viet Nam to build the plant. Regarding oil and gas, Viet Nam has entered into a joint venture with Russia. The joint venture extracted 1.5 million tonnes of oil last year and plans to extract 3 million tonnes and 5 million tonnes in 2012 and 2015, respectively.

Meanwhile, Viet Nam exported US$1.5 billion worth of products to Russia last year, which resulted in a trade surplus of $500 million. The country intends to raise export turnover to over $2 billion this year. Surely, Russia is a major potential market for Vietnamese firms.

Exporters will be supported in terms of trade, law and market information.

What advantages will firms have when exporting their products to Russia?

Russia is an open market and does not create trade barriers for Vietnamese businesses wishing to invest in Russia. The issue is whether Vietnamese commodities are able to meet quality standards and price requirements in Russia.

It should also be borne in mind that Russia will join the World Trade Organisation this year, which will allow Vietnamese goods to enjoy a tariff reduction of between 3 and 50 per cent on exports to Russia. In addition, Russia has recognised Viet Nam as a market economy, which means better conditions for Vietnamese businesses.

Agricultural products, food stuffs – especially sea food and tra fish – are popular in Russia. The consumption of electronic goods also experienced spectacular growth in Russia last year, worth about $400 million.

What advice would you give local firms wishing to export their products to Russia?

They need to pay attention to Russia's legal system and the fact that it is not yet a full market economy. The country is in the process of completing its legal system. However, it is a risky market. Vietnamese firms must ensure that payment methods are acceptable when signing contracts. That also applies to goods delivery. Many Vietnamese firms do not pay enough attention to this issue, resulting in losses and disputes.

Vietnamese firms can find information about the Russian market from the Trade Counsellor to Russia. We will support them in terms of law, market information and partners in an attempt to avoid disputes and solve problems. Besides this, we will also help these firms implement trade promotion activities, especially in terms of organising exhibitions to find partners.

I would recommend that the ministries of Industry and Trade and Agriculture and Rural Development help local firms with trade promotion. Relevant offices also need to work hard with their Russian partners to remove regulations that limit imports of tra fish to Russia and the Ukraine. — VNS

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