Gaining new insight into Kazakhstan market A free trade agreement with Kazakhstan has now passed and will come into effect in early 2016, said Duong Hoang Minh, speaking at a recent conference in Hanoi evaluating the Eurasian nation’s appeal as a business destination. In 2014 Vietnam’s total goods and services trade with Kazakhstan was a modest US$230 million with exports at US$219 million and imports of US$11 million, resulting in a favourable trade surplus of US$208 million, said Minh who is deputy head of the European Market Department under the Ministry of Industry and Trade. However, under the trade pact, Vietnam will enjoy many additional incentives that alleviate many of the past hurdles to trade he said, adding that most prominently tariffs on exports will be lowered or eliminated on 90% of trade. The trade agreement opens the doors wide for the following areas of Vietnam’s strengths said Minh: fruit and vegetables, seafood, clothing, footwear, pharmaceuticals, healthcare products, electric equipment, computers and components. Meanwhile Kazakhstan can meet Vietnam’s needs in the following areas: metals, raw leather, feathers, chemicals, rubber, machines and equipment for the mining industry. Not easy to grasp the opportunity The cost of transport is one of the greatest obstacles to trade and businesses should take great care to consider the routes, means of transport and warehouse costs to ensure the lowest competitive cost, Minh stressed. In addition, payment issues are problematic and the financial arrangements and payment due dates should be clearly specified in contracts and appropriate banking arrangements set up to deal with these complex matters. The Kazakhstan market places strict requirements on food hygiene and safety, so businesses will need to invest more effort and money into in beefing up the quality of products and competitive capacity. Most importantly, businesses must recruit staff members who are fluent in the Russian language and can readily communicate with Kazakhstan businessmen in a clear and concise manner. Last but not least, Minh stressed business and non-profit entities in collaboration with government agencies from the two nations need to improve their marketing and advertising strategies. They need to organize and participate in more trade fairs and expos as these events provide high profile opportunities to get their products noticed by consumers and develop brand recognition. Pham Van Tuan, a business owner and president of the Vietnamese Association in Kazakhstan, said another drawback is that businesses will face stiff price competition with the Chinese business community. Tuan said because China is much closer to Kazakhstan their transportation costs are less so businesses will need to compete on the higher quality and timeliness of delivery fronts to be competitive in the market. Lastly, Vice Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Doan Duy Khuong said the trade deal provides good incentives for businesses from the two nations to set up joint ventures and boost investment. VOV