Vietnam Signs FTA with Eurasian Economic Union
As we noted last December, Vietnam has now signed a Free Trade Agreement with the Moscow-backed Eurasian Economic Union . The signing was conducted by Russian Prime Minister Dmitry Medvedev and his Vietnamese counterpart Nguyen Tan Dung on 29 May, after a meeting of the Eurasian Intergovernmental Council in Kazakhstan. Medvedev stated that the free trade zone with Vietnam is “very important and marking a milestone,” adding that the talks had been rather protracted. “I’m confident it [the Agreement] will deliver benefits to our countries’ economies and finally to the peoples of those countries,” Medvedev said.
The FTA reduces tariffs on 90% of all goods traded between Vietnam and the EEU nations of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan and is expected to boost trade between Vietnam and the EEU to US$10 billion within the next five years. 2014 trade was US$4 billion.
The implementation of the FTA is expected to save EEU exporters US$40-60 million, and Vietnamese exporters US$5-10 million in its first year. The agreement will enter into force within 60 days of being ratified.
Medvedev also indicated that about 40 other countries were interested in partnering with the EEU over Free Trade Agreements, as was noted by our China Briefing portal earlier in the year. This active diplomacy by the EEU has seen Egypt agree in principle to an FTA, and negotiations begin with Israel, and the EEU’s recent approval in principle of an FTA with Iran. The expansion of EEU influence is not limited to FTAs only: during Indian President Pranab Mukherjee’s trip to Belarus this month, discussion are expected to include Indian membership of the union.
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