Huge potential for trade and investment cooperation with Eurasia: forum

Vietnam has a lot of room to grow trade and investment ties with Eurasia. This can happen thanks to strong frameworks like the free trade agreements with the EU and the Eurasian Economic Union (VN-EAEU FTA and EVFTA). Friday, Ta Hoang Linh, who is in charge of the Ministry of Industry and Trade's (MoIT) European and American Market Department, spoke at a trade forum.

The Vietnam–Eurasia trade forum, with the theme "Adapting to the Market Context – Unleashing Potentials," will talk about ways to make the most of cooperation opportunities with this huge group of 28 countries that spans from Eastern Europe to Central Asia and covers 23.5 million square kilometers. It has a population of 400 million people and a GDP of nearly US$4.5 trillion.

Even though trade between the two countries has gone down in the last two years—by 9.7% to $13.3 billion in 2022 and by 6.5% to $9 billion from January to September—Linh said that Eurasia was still a possible market for Vietnamese businesses.

He said that the goods that Vietnam sent to this area only made up 2.4% of Vietnam's total export value and 0.4% of the goods that this area bought. Only 0.3% of all the foreign direct investment that came into Vietnam came from Eurasia.

He said the potential was boosted by the creation of a strong framework for the growth of trade between the two sides. This framework included the VN-EAEU FTA, the EVFTA, and the EU-Vietnam Investment Protection Agreement (EVIPA).

Eurasia is also a region where a large number of Vietnamese live and do business, which will play an important role in connecting and promoting trade and investment exchanges between the two sides.

According to Shovgi Mehdizada, Ambassador of the Republic of Azerbaijan to Vietnam, Azerbaijan, where East meets West, is regarded as the gateway to the Eurasian region. A transportation corridor running from north to south and an international transportation route across the Caspian Sea, also known as the Middle Corridor, go through the country.

Shovgi said that trade between Azerbaijan and Vietnam had grown from $185,755 in 2021 to $594,609 in 2022 and $462,347 in the first 10 months of this year. He also said that there was a lot of room for cooperation in areas like energy infrastructure and cultural exchanges.

“Both ASEAN and Turkic states share interests in fostering economic cooperation,” he stressed.

At the forum, Shovgi also introduced benefits for investors when investing in Azerbaijan’s Alat Free Economic Zone, including exemption from value-added tax and customs duties.

Kanat Tumysh, Ambassador Extraordinary and Plenipotentiary of the Republic of Kazakhstan to Vietnam, said Kazakhstan and Vietnam are the largest trade partners for each other in the respective regions of Central Asia and ASEAN.

"Vietnam is now one of Kazakhstan's most important economic partners in Asia," he said, pointing out that trade between the two countries grew by 23% between 2021 and 2022.

Bilateral trade was 2.7 times higher in the first eight months of 2023 than the same period of 2022 and is on track to achieve several billions in US dollars.

“We believe that there is still a big potential for expanding our economic interaction,” he said.

Kazakhstan handles 80% of all traffic between China and Europe, making it the fastest way for goods and services to be sent from Asia to Europe and back again. Vietnam could benefit from goods going to European markets via the Kazakh-Chinese terminal at the seaport Lianyungang.

He urged Vietnamese companies to actively use the potential of the Trans-Caspian International Transport Route - linking China to the EU which will cut almost in half the time it takes to transport goods via the Indian Ocean.

According to Nguyen Thanh Hai, Vietnamese Trade Counselor in Bulgaria, there are opportunities to promote exports to six Western Balkans countries which are establishing the Western Balkans Common Regional Market as a step closer to membership of the EU.

These markets are not very highly demanding on product quality and competition is not as hard as in other EU markets.

Two-way trade between Vietnam and six Balkan countries remains modest at below $20 million per year, in which Serbia is the largest export market with a turnover of $7 billion.

With less than 1% of these markets, it is still not clear how much Vietnam's main exports, like clothes, shoes, and wooden furniture, are sold there.

Notably, Vietnamese goods are penetrating Western Balkan through other countries in the EU such as Germany, Italy, Hungary and the Czech Republic.

Hai said that Vietnam had advantages in promoting the export of processed coffee, cashews, frozen seafood, cement, steel and iron, plastics and rubber products to these markets.

Duong Hoang Minh, Vietnamese Trade Counselor in Russia, Vietnamese enterprises should actively study market demand by participating in trade fairs to find cooperation opportunities. 

In addition, enterprises should study their trade partners carefully before signing contracts to avoid fraud, Minh said that Vietnam Trade Office would be willing to provide support to enterprises in verifying the status of their partners.

Nguyen Anh Tuan, Vice Chairman of Vietjet Air and Deputy CEO of Sovico Group said that the Government should create favourable conditions for airlines to open new flight routes connecting Vietnam with countries in the Eurasian region to promote economic and cultural exchanges.

Support would also be provided to enable Vietnamese enterprises to participate in e-commerce platforms of Eurasian countries to expand exports.

Source: VNS