原文标题：A little more freedom in trade with Vietnam
At the end of 2016, the agreement between the EEA and Vietnam on establishing of a free trade zone came into effect. According to the Eurasian Economic Commission, the project is expected to cause an increase in trade turnover between the countries. Obviously, the main factor of the anticipated rise in trade is brought about by the drop in import tariffs by 89 percent for all commodity items. A reduction in duties has affected a number of agricultural and industrial goods. The question to be raised here is as follows: what goods, which enjoy preferential access to the Vietnamese market, can be offered by Kazakhstan?
First of all, it should be noted that the total volume of Kazakhstan's exports to Vietnam traditionally amounted to $ 60-70 million. It consisted of 4-5 types of goods, the main of which was rolled metal. So, until 2010, various types of rolled products accounted for up to 90 percent of all exports. However, since 2010, a sharp decline first to 20 million had begun, which later continued down to $ 5 million. The main reason for the fall is the rapid reduction in the volumes of supplies of the rolled metal. Moreover, since 2013 the deliveries to Vietnam has stopped completely, and the main export items has been zinc and lead. Considering the Russian exports to Vietnam, although it is more diversified, metal rolling has always held leading positions ($ 150-200 million). It can be noted that similarly to Kazakhstan, Russia has also drastically reduced the supply of this product to 4-5 million since 2013. One can speak about some general decline in demand in Vietnam, or reorientation to a cheaper supplier.
In any case, the Kazakh rolled metals in Vietnam became completely out of demand, while its Russian counterpart took up the remaining small share. The reason for this is obvious if you pay attention to the fact that the import rates for rolled metal in Vietnam are quite low for all countries—from 0% to 7%. There is only one reason—the costs of shipment to Vietnam from Russia are evidently lower compared to Kazakhstan, due to own Pacific ports, which allowed to continue with at least part of the volumes.
A reasonable question here is how much will the FTA with this state contribute to the restoration of the former volumes of rolled metal exports, if the tariff rates are not the case? The answer to this question can be learned only from the first trade indicators for the current year.
If we consider other items from the list of preferences for the EEA countries, then Kazakhstan may be interested in reducing grain tariffs—wheat and flax seeds—the only agricultural products sent to Vietnam. Up to this point, the rates for 10 and 5 percent were in effect for Kazakhstan respectively. Unfortunately, the decrease in Vietnamese duties did not affect batteries—they remain at the high level of 20-25 percent. The fact is that, judging by the statistical data, a very small amount of batteries was shipped to Vietnam, which is most likely the product of a rather successful domestic producer.
In turn, imports from Vietnam amounted to 200-250 million dollars in recent years. The structure of imports from this country is over 90% electronics and to a lesser extent—clothes, exotic fruits and fish. By the way, the reduction of duties for Vietnam mainly affects electronics and clothing. It should be noted that due to the lack of extensive production of the latter in Kazakhstan, preferences for Vietnam do not pose any serious threat to the domestic market.
Speaking about non-tariff preferences and other types of economic cooperation, bilateral relations between Kazakhstan and Vietnam were at a fairly high level, given the low turnover and remoteness. For example, the Kazakh-Vietnamese intergovernmental commission has been functioning since 1997 and providing coordinated work in the fields of investment, taxation and trade.
In general, this agreement does not bring many new or large-scale changes for the economic relations between Kazakhstan and Vietnam: first, both the dynamics of trade and its structure mainly depended on real demand and the level of non-administrative costs; secondly, trade with this country was already quite liberal. What's worth noting that that the extensive reduction of duties by Vietnam may provide more opportunities for Kazakhstan's food exporters in the long term.