Expanding Bilateral Trade between the EAEU and Vietnam – Going Forward
Going forward
According to Article 2.1 in the FTA, EAEU may apply a trigger safeguard measure for Vietnamese goods in case the import volumes during a calendar year exceeds the trigger level as established in Annex 2 of the agreement. Currently, under this measure, certain products in the textile and garment sector in Vietnam face safeguard duties from the EAEU, which aims to limit the increasing volume of imports to EAEU. Since March 14, 2018, duties were imposed on Vietnamese underwear and children’s wear products for nine and six months respectively.
Traders have to make sure that they do not exceed the trigger levels as defined under the agreement; else, they may face most favored nation rates and not the preferential tax rates as prescribed under the free trade agreement. To reduce trade violations, the Vietnamese government has to ensure that traders are well informed and aware of such measures. In addition, individual governments have to promote the FTA and investments to increase the participation of private firms.
In the last few years, EAEU has also started to work with other ASEAN member states on trade and investment, and this puts Vietnam in a unique position, as it can act as a supply chain gateway for EAEU companies in the region. Going forward, to achieve their target of US$10-12 billion bilateral trade by 2020, and US$30 billion by 2030, trade between Vietnam and EAEU has to grow exponentially.