vietnam ukraine 7jun2

LeVan Thang, deputy director of the Ministry of Trade's Export-Import Department, spoke toThoi Bao Kinh Te Viet Nam (Viet Nam Economic Times) newspaper about moves to expandexports to the Commonwealth of Independent States (CIS) market.

What is the current economic situation in thesecountries, and what are their trade links with Viet Nam?
The former USSR countries share stable social and economic development, and all are makingefforts to expand their economic co-operation with other countries.

Much of the recent economic development in these countrieshas come from reforms to the industrial and agricultural sectors.

The Ukrainian economy grew by 9 per cent last year, whileRussia's economy grew by 5 per cent.

In the same year, Viet Nam's exports to these markets grewby 50 per cent on the year 2000 to reach US$232 million.

Our key exports to these markets include agriculturalproducts, cash crops, textile and leather products, and household appliances.

We have made strong efforts to re-establish our businessties with these traditional markets, but so far these countries consume only 1.5 per centof our total exports and none of our products are seen as having the potential to gain astable footing in these countries.

What did the Vietnamese business people discoveron their tour?
The 10-day trip comprised traders and exporters from the agricultural goods, rubber, tea,footwear, garment and handicraft sectors.

During the trip, they signed trade contracts worth about$4.5 million and other agreements worth $2.5 million.

Several agreements covering manufacturing co-operationwere also reached.

Wherever they visited, the business people had the chanceto learn about potential markets by meeting with government officials and localbusinesses.

The representatives asked the Russian authorities to repayloans in goods, sign a free-trade agreement between the two countries, construct a VietNam-Russia Trade Centre in Moscow, increase trade and reduce the taxes on imported rice.

In Belarus, local business people met with theirVietnamese counterparts to discuss trading opportunities and ways to improve economicco-operation.

As a result of the trip, Vietnamese business people signedagreements to reassemble Mazmotors in Viet Nam and import Russian made vehicle components.

They-also made deals with Ukrainian partners to exportseafood, fruit and vegetables, handicrafts, garments, rice and rubber to that country.

Do you agree that while CIS markets offer enormouspotential, they are difficult to enter?
Yes, they are high-risk markets. To begin with, Russia has high import and value addedtaxes.

For consumer goods, these taxes come to about 20-30 percent of the goods' value; while a consumption tax is charged on all other categories ofgoods.

All of these countries have strong quality-certificationregulations and consumer-protection laws.

Russia has a very complicated financial- and creditmanagement situation, and the financial potential of Russian businesses is limited.

Because many large foreign companies have alreadyestablished operations in Russia, Vietnamese goods will face severe competition.

How can the State help local business enter thesemarkets?
The Ministry of Trade had made the following suggest' lions to the Governmentorder to help Vietnamese businesses enter CIS markets

We would like the Government to provide financialassistance for trade fairs and other promotion activities in' Russia and regionalcountries, and allow the Ministry of, Foreign Affairs to provide visa exemptions forofficial passport holders.

The Viet Nam Commercial Bank should be able to negotiatewith the commercial banks of CIS countries to introduce credit limits for foreignbusinesses which export Vietnamese goods.

The Ministry of Finance can help by studying the financialassistance available to Vietnamese exporters of agricultural products and refining theseprogrammes.

We have also asked the Government to help set up Viet Namtrade centres in these countries, and sign bilateral labour movement agreements