China Close to Signing Free Trade Agreement with Eurasian Economic Union
China is getting very close to signing off a free trade agreement with the Eurasian Economic Union (EAEU), Russia’s First Deputy Prime Minister Igor Shuvalov said in an interview on Monday with the Moscow-based Rossiya24 TV channel.
Shuvalov’s comments will raise hopes that the agreement will see tariffs on Chinese goods either be significantly reduced or lowered to zero on thousands of items entering the EAEU, a trade bloc that includes Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan, as well as reductions for goods entering China.
“This agreement is a game-changer and is a significant step forward in China’s One Belt, One Road ambitions,” says Chris Devonshire-Ellis of Dezan Shira & Associates. “It will essentially bring Chinese goods, duty free, right to the borders of the European Union. There are significant opportunities for European Asian-focused businesses in repackaging, warehousing, distribution, and logistics in dealing with this influx. China’s Silk Road ambitions also include supplying its own massive domestic market from European-based manufacturers. EU businesses should be looking at getting their products onto Chinese portals and selling to China online. 500 million middle class Chinese consumers buy products from overseas, and the OBOR routes are a huge opportunity for European producers to wake up and get prepared to service that market from their own factories.”
The China-EAEU FTA is expected to closely follow the Vietnamese agreement that was signed off in mid 2015. A complimentary, English language translation of that agreement, some 1,300 pages, can be found on the Dezan Shira & Associates FTA archives section of their website here.
“Of particular interest in the Vietnam-EAEU FTA are tariff decreases in agricultural and automotive products, although the content covers thousands of items and is well worth studying for industry specifics,” says Devonshire-Ellis. “The China FTA is as much about supplying China from Russia and potentially from the EU as it is getting Chinese goods to Europe. There are also significant opportunities for investors into Russia and Belarus in terms of handling goods destined for either the EU or back to China. Countries such as Estonia and Finland are already preparing for this. The China-Russia trade corridor is a hot place to be and businesses from across the Eurasian region should be looking at servicing that,” concludes Devonshire-Ellis.
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