In the midst of the escalating Russia-Ukraine conflict, experts say that Vietnam may be significantly affected, especially in the areas of goods circulation, payment of commercial contracts, and companies with joint projects with Russia, Ukraine, Belarus will also be affected.
That is the information in the article published on Fiber2fashion.com on March 17.
Also according to Fibre2fashion, currently Vietnam’s textile and garment exports to Russia account for 10.5%.
This newspaper quotes the opinion of the European-American Market Department of the Ministry of Industry and Trade of Vietnam that both Russia and Ukraine are traditional and important trading partners of Vietnam in the Eurasian region. In terms of trade turnover, Russia ranks first and Ukraine ranks sixth. Therefore, if the Russia-Ukraine conflict persists, it will certainly seriously affect bilateral trade between Vietnam and the two countries.
The Market Department confirmed that in the short term, the crisis will affect commodities, supply, and demand, prices and conflicts are one of the main reasons for the increase in prices of some fuels and raw materials for production and consumption.
Regarding the payment of commercial contracts with Russia, over the past time, the United States and Western countries have imposed a series of sanctions targeting the banking and financial system of Russia. This will affect the settlement of many contracts using the US dollar as the settlement currency in the short term.
In addition, due to the volatility of the ruble exchange rate, some Russian importers have suggested suspending payments for two to three weeks to wait for the situation to stabilize.
In addition, some shipping lines have refused to accept shipping orders from Vietnam to Russia. Freight rates will continue to soar along with shipping delays that will seriously affect the trade of goods.
Along with that, due to the air embargo, airlines will have to choose longer routes, causing increased costs and pressure on the global logistics transport system and commodity prices.
However, experts say that it is too early to assess the medium and long-term impact of the Russia-Ukraine conflict on trade relations with Vietnam.
In a question what Vietnam will have to do to minimize negative impacts and stabilize production and export of goods to Russia in the coming time, the representative of the Ministry of Industry and Trade replied in the Lao Dong newspaper that the ministry has written recommendations for associations, industries, and enterprises participating in export activities should note the application of risk prevention measures when entering into contracts with foreign customers.
In addition, businesses need to make the most of the incentives in 15 free trade agreements between Vietnam and other countries to diversify markets.
Translated by Thoibao.de from RFA: https://www.rfa.org/vietnamese/news/vietnamnews/vietnam-trade-may-be-significantly-hit-by-russia-ukraine-conflict-03172022081513.html
