Vietnam - Kazakhstan Advancing Multifaceted Cooperation Ties

Kazakhstan opened its embassy in Hanoi in early 2014. Vietnam and Kazakhstan always have a common voice in international and regional fora. The two sides support each other to participate in international and regional organisations and summon annual political consultations at deputy foreign minister level. A lot of agreements signed provide a legal basis for the development of relations in various fields such as investment promotion and protection, double taxation avoidance, timed work duration, crop protection, tourism, education and training.

 

Dr Doan Duy Khuong, Vice President of the Vietnam Chamber of Commerce and Industry (VCCI), said that Vietnam and Kazakhstan have signed a lot of framework agreements on economic cooperation, trade, diplomacy, education, investment, labour, energy and others. However, in general, Vietnam - Kazakhstan economic and trade relations are still modest, incommensurate with the potential and desire of the two sides.

 

According to trade statistics, the total bilateral trade turnover reached US$229 million in 2014, up 44 percent over 2013 and up 5.2 times over 2010. Specifically, Vietnam’s exports valued US$218.4 million, up 42 percent and Kazakhstan’s exports totalled US$10.5 million, up 2 times against 2013).

 

Vietnam’s key exports to Kazakhstan include telephones and components, computers and parts, agricultural products, marine products, machines and equipment, iron and steel. Meanwhile, its imports from Kazakhstan comprise metals, ores and minerals. It is obvious that both countries’ economies are complementary.

 

In trade, Vietnam can meet Kazakhstan’s demand for tropical agricultural products, seafood, garments, footwear, pharmaceuticals and medical devices, electrical equipment, computers and components. Kazakhstan exports raw materials like metals, hides, furs, chemicals, rubber, and mining machines and equipment to Vietnam.

 

In industry, Vietnam and Kazakhstan recently cooperated in oil and gas industry. In April 2012, Vietnam Oil and Gas Group (PetroVietnam) and KazMunaiGaz, State-owned oil and gas company of Kazakhstan, signed an additional agreement to renew the “strategic cooperation agreement between PetroVietnam and KazMunaiGaz" and initially achieved specific cooperation projects through an agreement on joint research in Usturt Block (near the border with Uzbekistan where PVN is carrying out its oil and gas contract in Kossor Block). In September 2012, PetroVietnam and KazMunaiGaz signed a memorandum of understanding on negotiations towards the signing of oil contracts in Usturt Block.

 

Besides, at the 6th meeting of the Vietnam - Kazakhstan Intergovernmental Committee for Economic, Commercial, Scientific and Technological Cooperation, both parties agreed to allow the Vietnam National Coal, Mineral Industries Holding Corporation Limited (Vinacomin) and Sovico Company of Vietnam with Kazakhstani partners to extract and process minerals as well as consider the possibility of cooperation in cotton and yarn production and processing in Ontustik Special Economic Zone.

 

In addition to oil and gas sector, the two sides are also promoting investment in all economic sectors like developing infrastructure; manufacturing garments, textiles, and footwear, establishing joint ventures for rubber processing, horticulture, seafood processing, livestock husbandry, tea packaging and coffee of Vietnam in Kazakhstan.

 

Besides, Vietnam and Kazakhstan signed air transport agreement in 2013 to exploit opportunities on direct flights between the two countries. This is the most important transport link to advance long-term cooperation and bring more Vietnamese tourists to Kazakhstan to discover the beauty of the Central Asian nation.

 

In addition to traditional friendship cooperation, Vietnam - Customs Union FTA and Vietnam - EEU FTA are opening up many comprehensive opportunities for Vietnamese and Kazakhstani businesses.

 

With the FTA with the Customs Union, the Customs Union grants tariff preferences for Vietnam and create new very important export opportunities for Vietnam’s strong exports like agricultural and aquatic products, garments and textiles, leather and footwear, and furniture. Vietnam agreed to open its market, according to the roadmap, for the Customs Union’s products like livestock products, machines, equipment and vehicles. These commodities do not compete with Vietnam’s products but diversify the domestic consumer market.

 

Moreover, Vietnam - Kazakhstan cooperation prospects are bright after the Vietnam - EEU FTA was signed. The door for comprehensive cooperation for both sides in all fields will be opened, especially for agricultural commodities, foodstuffs, garments and textiles, and consumer electronics.

 

The agreement includes chapters on trade in goods, rules of origin, trade remedies, trade in services, investment, intellectual property, sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT), electronic technology in trade, competition, legislation and institution.

 

According to the agreement, the two sides agreed to open export markets for 9,927 tariff lines (equivalent to 87.4 percent - 95.7 percent). Vietnam accepted to open the market according to a roadmap for EEU’s livestock products and industrial products, including machinery, equipment, and vehicles.

 

According to economic experts, the agreement is a great opportunity for Vietnamese businesses to boost their exports to Kazakhstan. They should fully grasp the tax cut roadmap relating to their production and business fields so as to build suitable production and business strategies.