A number of Southeast Asian countries, members of ASEAN, have called for improvements in the region’s free trade status with Russia at this week’s Eastern Economic Forum in Vladivostok, Rhythm of Eurasia reports.
Nearly all members with the exception of Vietnam, which has a free trade agreement (FTA) with the Russia-inclusive Eurasian Economic Union (EAEU), suffer from low bilateral trade volumes with Russia. But the Vietnam experience has seen Viet-Russian bilateral trade jump from practically zero to $10 billion in three years. Other ASEAN nations are understandably keen to duplicate this.
The nearest point to Russia for most ASEAN members is, in fact, Vladivostok in the Russian Far East. Although the kilometer distance is significant, Singapore and Vladivostok are connected by fast shipping routes, while Vladivostok is well integrated with Japan, South Korea, Northern China via shipping and rail, and with Eurasia via the Trans-Siberian rail, which also provides access to Central Asia and Europe.
This means a re-think is needed on how to better integrate this corner of Northeast Asia with Southeast Asia trade and development, as well as how to take advantages of these new market opportunities.
Bilateral trade between Russia and Indonesia is currently running at about $50 million, with a similar amount of investment by Russia into the country being made in the past three years. Russian truck manufacturer Kamaz has established a production unit in Indonesia and are developing service centers across the country.
However, as Bambang Brodjenegoro, the Indonesian Minister for National Development and Planning pointed out, both Indonesia and Russia are G20 nations, and given the sizes of their respective economies really ought to be doing better. He cited tariffs as being too high and called for a quick resolution to a Russia-Indonesia Free Trade Agreement “either bilaterally or multilaterally” in a reference to an agreement with the EAEU.