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Russia offers untapped potential for exporters
Vietnamese firms should step up exports to Russia, which is emerging as a promising market, Government officials told a conference in HCM City on Dec. 23.
Viet Nam has established good political relations with Russia, which was a good foundation for the two countries to foster trade ties, Nguyen Ngoc Binh, Deputy Head of the Ministry of Foreign Affairs' European Department, said.
Like other countries, Russia was focusing on economic development and social welfare after the economic crisis, opening up great opportunities for Vietnamese businesses, especially to export traditional farm produce, he said.
Binh and several other delegates agreed however that Viet Nam-Russia trade was not commensurate with the potential and expectations of the two countries.
Last year, two-way trade was worth US$1.8 billion despite the economic downturn and the two countries target $3 billion by 2012.
Viet Nam accounts for just 0.24 per cent of Russia's total imports.
Alexandr Kardo-Sysoev of the Russian Trade Office in Viet Nam blamed the situation on a lack of information about each other's markets and geography.
"(Both sides)" mainly export raw materials and semi-processed farm produce and their costs go up manifold due to high transport costs," he said.
He called for spreading the cost by increasing exports of value-added products and refined goods.
He also advised businesses in the two countries to enter into joint ventures in Viet Nam to process farm produce for export to Russia.
There were risks that Vietnamese companies have to prepare for while doing business with Russia — including payment risks and tax and non-tax barriers — Nguyen Ngoc Quan, Deputy Director General of the Ministry of Industry and Trade 's European Market Department, said.
Letters of credit were not popular in Russia, he said, and Russia importers usually paid an advance of only 20-30 per cent, posing a high risk for exporters saddled with unreliable clients.
Russia has not joined the World Trade Organisation and so put up trade barriers to limit imports, he said, adding Russia hoped to join the WTO next year.
He urged businesses to improve quality for their exports to the EU and Japan and gather information about their potential partners before signing import or export contracts.
He called on the Trade Promotion Agency to organise more conferences between businesses in the two countries to exchange information and find partners, and more promotional programmes to boost exports to Russia.
His ministry and its Russian counterpart are considering a free trade agreement between Viet Nam and a customs union grouping of Russia, Belarus, and Kazakhstan.
Viet Nam imported goods worth $879 million from Russia in the first 10 months this year, mainly oil and petrol, steel, fertilisers, and equipment.
Its exports were worth $643 million, with seafood, textiles, footwear, agro-forestry products, and handicrafts being the major items.
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