The incipient Moscow-led EEU—which came into force in January includes Russia, Armenia, Belarus, Kazakhstan and Kyrgystan—signed the FTA as it looks to grow its presence in Asian markets, and the deal was the first of its kind struck with a third party.
“A historic act took place today,” The Moscow Times reported Viktor Khristenko, chairman of the Eurasian Economic Commission’s board, as saying after the prime ministers of the five EEU member states signed the FTA with their Vietnamese counterpart Nguyen Tan Dung.
He added, “The Socialist Republic of Vietnam is an old good partner of all the nations taking part in the Eurasian Economic Union.”
Vietnam is making moves with trade deals of late as it works to position itself as Asia’s manufacturing leader and strengthen its $184 billion economy.
The country just signed an FTA with South Korea last month and aims to boost its exports to the Korean market and double bilateral trade in the next five years.
Talks of a free trade deal with the European Union are also in work and could be concluded as soon as this month, not to mention the progressing Trans-Pacific Partnership (TPP) agreement Vietnam is working on with 12 nations including the United States, Japan, Canada and Australia.
Analysts have suggested Vietnam will snag business from its neighboring rivals with its already low-cost labor, and now with lesser or no duties due to the trade deals.
The Vietnam-EEU agreement covers more than 90 percent of all goods traded between the parties, and the EEU said it hopes to increase its foreign turnover with the Asian nation to at least $10 billion in five years, more than double last year’s $4 billion.