Vietnam’s exports to the UK increased by 16 percent in 2021, while imports surged by 24 percent. It means that the two sides have made good use of the trade deal. Since the trade deal took effect on May 1, 2021, UK companies have paid more attention to Vietnam, as clearly reflected in an increase of UK investment in Vietnam. In general, the trade deal has made a positive contribution to UK-Vietnam relations.
What is the role of the UKVFTA in the context of COVID-19 and Brexit?
The biggest contribution is facilitating trade between the two countries during the Brexit process. We all know that Vietnam and the European Union (EU) have a free trade agreement. When the UK left the EU, it was very important for the two sides to have an agreement to keep trade relations uninterrupted.
The trade deal has offered a variety of measures to encourage the growth of bilateral trade. In the first six years of the deal, the UK will eliminate 99.2 percent of tariff lines on Vietnam’s imports. In particular, in the first year of implementation, many Vietnamese goods have made good use of the deal, especially agricultural products, contributing to increasing trade turnover between the two countries.
The UK also commits to giving additional tariff quotas to 14 Vietnamese items, including rice. In addition, some 36 Vietnamese geographical indications for famous products, such as Buon Me Thuot coffee and Phu Quoc fish sauce, are protected in the UK, opening up opportunities for Vietnamese goods to penetrate the market.
What should Vietnamese businesses do to make effective use of the deal?
The government issued an action plan for UKVFTA implementation, including measures to support businesses in their export-import activities.
Businesses should study carefully the contents of the deal and learn the UK’s legal regulations for imported goods.
After leaving the EU, the UK is negotiating numerous free trade agreements with many partners around the world, including ASEAN countries. As Vietnam enjoys the benefits of the trade deal, it must soon assert a foothold in the UK market.
The UK annually imports goods and services worth US$600-700 billion. However, Vietnam’s exports remain modest compared to their import demand, leaving much room for growth. Vietnamese businesses need to make good use of the trade deal to promote exports and assert a firm foothold in the market.
Source VEN
