Vietnam is keen to boost its textile exports to Russia but there are concerns that the south-east Asian country will be hampered by several difficulties, including processing letters of credit (L/Cs).

In 2013, Vietnam's textile exports to Russia reached US$135.6 million, up by 11 per cent over 2012, according to Vietnamese customs data.

Opportunities

Vietnam National Textile and Garment Group (Vinatex) is optimistic about prospects for Vietnamese textile exports to Russia.

The group says that tariff preferences related to Russia's accession to the World Trade Organisation, an expected customs union and a free trade agreement between Russia and Vietnam will all help boost sales.

Problems ahead

But Vietnam's trade counsellor for Russia, Pham Quang Niem, has warned of difficulties ahead.

He says potential problems for Vietnamese exporters include the absence of a centralised trade transaction organisation and payment processing structures that make trading with Russian partners difficult, especially in L/C transactions.

Would be Vietnamese exporters will also face fierce competition from rivals from other countries providing similar products and may find the Russian market potentially risky because of Russia's legal system, the trade counsellor added.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.