http://english.vietnamnet.vn/fms/business/111186/business-in-brief-5-9.

html

Trade deal seeks to boost VN-Russia ties

The free trade agreement between Viet Nam and the Customs Union of Russia, Belarus and
Kazakhstan would boost trade ties especially with Russia, a seminar heard in HCM City last
Friday.

Negotiations for the FTA are on and expected to conclude by the end of this year, according to
Tran Ngoc Quan, deputy director of the Ministry of Industry and Trade's European Market
Department.

When it is in place, at least 80 per cent of Vietnamese goods exported to that market, especially
consumer goods, will enjoy tax exemption.

With a population of 140 million, Russia is a potentially lucrative market for Vietnamese
products, and the two sides also enjoy close relations.

Viet Nam's trade with that country has risen considerably in recent years to nearly US$2.75
billion last year, but remained well below potential, accounting for a mere 1 per cent and 0.25
per cent respectively of Viet Nam's and Russia's total trade.

Besides, Russian businesses have invested more than $2 billion in Viet Nam while in the reverse
direction, the amount is nearly $2.4 billion.

With the complementary features of the two economies coupled with efforts made by them, trade
and investment relations are expected to grow strongly in the coming years, according to Quan.

Tran Bac Ha, chairman of the Bank for Investment and Development of Viet Nam, said drastic
competition, high transport costs, and payment issues were among difficulties Vietnamese firms
face when exporting to Russia.

He said local firms hoping to enter the market had to study it carefully to come up with
appropriate strategies.

They would also need to focus more on improving their competitiveness, he added.

According to the Ministry of Industry and Trade, Russian firms are interested in several sectors
in Viet Nam like oil and gas, mining, transportation, telecommunication satellites, auto, and
seafood.

Vietnamese firms eye setting up centres in Russia to distribute consumer goods and construction
materials.
Viet Nam's main exports to Russia include telephones, computers, electronics parts, garment and
textiles, footwear, seafood, coffee, cashew, rice, vegetables, and fruits, while it imports
petroleum products and iron and steel.

http://english.vietnamnet.vn/fms/business/111339/business-in-brief-8-9.html

Huge potential for expanded trade with Russia

Vietnamese Russian trade has been sluggish in recent years, but is expected to rebound strongly
when a Free Trade Agreement (FTA) between Vietnam and the Customs Union (VCUFTA)
comes into effect later this year.

Speaking of the VCUFTA, Deputy Minister of Industry and Trade Do Thang Hai says final
negotiations are underway and he expects Vietnamese exports to Russia to experience
exponential growth once the trade pact is signed later this year.

Two-way trade turnover between the two nations, though far below its potential, did manage to
hit US$2.76 billion last year, a year-on-year increase of 13.6%. Of the figure, Vietnamese
exports to Russia were US$1.91 billion, up nearly 18% while imports were US$853 million, up
2.7%.

In the first seven months of this year, Vietnamese exports to the market declined slightly to
US$960.4 million due to the political stability in the country. However, the downturn is expected
to only be temporary, with the value expected to bounce back when Russia’s economy regains its
stability.

Tran Bac Ha, President of Board of Directors of the Bank for Investment and Development of
Vietnam (BIDV), says Russia has high and stable demand for light industrial products.
Currently, some Vietnamese products exported to Russia enjoy lower taxes by 30-50%.

Furthermore, goods exported to the country should also benefit from an additional 25% tariff
reduction when the VCUFTA comes into effect, Ha said adding another incentive of the trade
agreement is that Russia represents a gateway for Vietnamese products to penetrate other
countries in Northern America and Europe.

In addition to trade, Russia offers a huge investment opportunity for Vietnamese businesses.
Vietnamese businesses have invested US$2.4 billion in 17 Russian projects, principally in oil
and gas exploitation, food processing, garment and footwear.

BIDV and the Vietnam National Textile and Garment Group (Vinatex) plan to develop a light
industrial complex on 1,000ha in Moscow. In the first phase, Vinatex plans to construct a
garment factory at the complex.

Moscow is also offering incentives in terms of tax abatements and reduction along with reduced
land rent and visa exemptions for Vietnamese workers. While BIDV has also agreed to issue
loans worth of 75% of investment project’s value with preferential interest rates of 1.5-2% lower
than the normal rate.

Russia has high demand for products of Vietnam’s strength like garment, footwear, handicrafts,
processed food, agricultural products, seafood and construction materials.

The two countries are expanding cooperation in agricultural product processing and automobile
assembling. In recent times, some businesses have invested in setting up goods distribution
centres in Russia, providing a foundation for long-term operation in the lucrative market.

The Russian Government has offer incentives aimed at stimulating the light industry’s growth
such as reducing import tax and giving preferential taxes for investors, including Vietnamese.

Experts warn that to conquer the market, Vietnamese businesses must overcome a number of
formidable challenges, such as poor payment methods, fierce competition, fake and contraband
goods and legal risks.

Deputy Minister Hai says to accelerate trade and investment in Russia, the two governments
should devise a better mechanism for businesses to make payment by local currencies and
support the establishment of the Vietnamese Investors Association in Russia.

Russia allows more VN seafood

Russia has lifted a ban on seafood products from three more Vietnamese companies, raising the
number of Vietnamese companies allowed to export seafood products to the European country to
10.

According to the National Agro-Forestry-Fisheries Quality Assurance Department (NAFIQAD),

Russia's Federal Veterinary and Phytosanitary Surveilance Service has lifted its ban on the
products of Anh Long Company, Seajoco Tan Phu Trung's Seafood Joint Stock Company No.1
and Frozen Factory AGF 9.

NAFIQAD officials said the ban was lifted after Russia confirmed that the companies' seafood
products met its standards on food safety and hygiene.

Russia enforced the ban on the Vietnamese companies at the beginning of this year. Last month,
it lifted the ban on seven of these companies, including five engaged in frozen tra fish and basa
fish processing and two engaged in frozen shrimp processing.

Experts said the lifting of the ban would enable these companies to boost the country's seafood
exports , as Russia was a large potential market for Viet Nam's fisheries products.

Russia's market potential increased after it imposed an embargo on imports from other European
countries and turned to other trade partners to ensure an adequate food supply for its population
of more than 140 million.
Truong Dinh Hoe, general secretary of the Viet Nam Association of Seafood Exporters and
Producers, said Vietnamese companies should be proactive about taking advantage of
opportunities to boost seafood exports while paying attention to product quality to meet the
safety standards of the Customs Union of Belarus, Kazakhstan and Russia.

In the first seven months of this year, Viet Nam's export of seafood products to Russia reached
US$36.2 million, representing an increase of 5.4 per cent over the same period last year.

The seafood export turnover is expected to increase rapidly in the remaining months of this year
partly because of Russia's lifting of the ban on imports from the Vietnamese seafood companies.
Last year, Viet Nam exported $103.3 million in fisheries products to Russia.

Vietnam-Russia economic cooperation improved

Cooperation between Vietnam and Russia is greatly benefitting the two countries with regard to
economics, trade and investment, Vietnamese Trade Counsellor to Russia Pham Quang Niem
said.

Bilateral trade reached 4 billion USD in 2013 and 1.76 billion USD during the first half of this
year.

Russia currently ranks 18 th amongst the countries and territories investing in Vietnam, with a
total of 97 investment projects worth close to 2 billion USD.

Meanwhile, Vietnam has invested 2.4 billion USD in 17 projects in Russia.

A meeting between Vietnamese and Russian businesses, chaired by Minister of Industry and
Trade Vu Huy Hoang, on September 16 is expected to help the firms to learn about the
respective markets and enhance investors’ confidence, boosting cooperation between Vietnam
and Russia, Niem added.

A free trade agreement between Vietnam and the Customs Union of Russia, Belarus and
Kazakhstan is expected to be signed next January on the occasion of the 65 th anniversary of
Vietnamese-Russian diplomatic ties.