Russia became part of the ASEAN Regional Forum in 1995, along with the Association of Southeast Asian Nations (ASEAN), and became a full dialogue partner in 1996. Since then, two-way trade increased from USD500 million in 2005 to USD18.2 billion in 2019.
Vietsovpetro – the 8th largest company in Vietnam (Photo: baotainguyenmoitruong.vn)
Most of Russia's investments in the region are based on energy - oil, gas and nuclear; however, ASEAN is diversifying its energy import partners rather than relying on one partner. During the 9th ASEAN Economic Ministers (AEM)-Russia Consultation in August 2020, both sides saw the potential in realizing initiatives in the fields of agriculture, infrastructure, financial services and digital technology.
In addition, the two sides signed the ASEAN-Russia Comprehensive Plan of Action for 2021-2025 in 2020 to cooperate in the fields of security, counter-terrorism and transnational crime, science and technology, smart cities, health and disaster mitigation. The Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement in the world, signed in 2020, gives Russian investors access to more than 2 billion consumers, including 600 million people in ASEAN alone. Trade between Russia and ASEAN will become ever more important as Southeast Asia aspires to become a more prominent trade corridor. Russia itself is a leader of the Eurasian Economic Union (EAEU) Free Trade Agreement and has signed separate FTAs with Singapore and Vietnam.
Russia and Vietnam mark 70 years of diplomatic relations in 2021, and despite being affected by the COVID-19 pandemic, the total bilateral trade turnover reached USD5.7 billion in 2020, an increase of 15% compared to 2019. Trade relations between the two countries are still modest although this is expected to increase as more and more businesses take advantage of the Vietnam-EAEU FTA.
Moreover, Vietnam's participation in RCEP due to its association with ASEAN will give Russian companies the opportunity to promote goods and services to more than 2 billion consumers in Asia. Oil and gas still dominate trade between Russia and Vietnam, and major Russian oil and gas groups, such as Gazprom and Rosneft, are involved in more projects on Vietnam's continental shelf. Russian-Vietnamese enterprise Vietsovpetro is the 8th largest company in Vietnam and produces one third of the country's oil.
Industries that show the greatest potential for Russian investors in Vietnam may include agriculture and food, and manufacture of textiles and electronic equipment./.
Compiled by BTA