More than 99% of tariff lines exported to the UK will be eliminated thanks to the Vietnam-UK FTA

On December 11, Minister of Industry and Trade Tran Tuan Anh and UK Minister of International Trade Elizabeth Truss officially signed the Agreement on the conclusion of the UK-Vietnam Free Trade Agreement negotiation. (UKV FTA).

In the Joint Statement at the Ministerial level of Vietnam and the United Kingdom, this bilateral FTA provides an important continuation of the dynamic and rapidly developing trade relationship between the two sides. In 2019, UK businesses exported goods worth more than £ 600 million to Vietnam. Also in 2019, Vietnamese businesses exported goods to the UK with a value of about 4.6 billion pounds.



 

The Vietnam - UK bilateral FTA still maintains the interests of the two sides' existing trade relations under the EU-Vietnam Free Trade Agreement. Trade-in goods from textiles and garments to footwear to seafood products remains uninterrupted. Trade-in services, in particular financial services and e-commerce, could continue to grow.

Businesses can continue to benefit from reduced import and export taxes, increased access to service markets, and protection of key products of Vietnam and the UK. This includes 65% of tariff lines that have been eliminated in UK-Vietnam trade. The above figure will increase to 99% after the end of the tariff reduction schedule.

By the end of the roadmap, Vietnam will benefit by saving £ 114 million in taxes on Vietnam's exported products. For UK exports, the corresponding figure would be £ 36 million.
The Agreement is also an important step forward for the UK to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The UK is the third-largest trading partner of Vietnam in the European region. According to the General Department of Customs, in 2019, the total import-export turnover of the two countries reached 6.6 billion USD, of which exports reached 5.8 billion USD and imports reached 857 million USD. In the period 2011-2019, the growth rate of Vietnam - UK bilateral import and export turnover increased by an average of 12.1% / year, 10% higher than the average rate of Vietnam per year. The growth of total import-export turnover to this market is also high (over 10%).

The main products exported from Vietnam to the UK are phones - components, textiles, footwear, seafood, wood and wood products, computers - components, cashew, coffee, pepper. ; Vietnam imported from the UK include machinery, equipment, pharmaceuticals, steel, chemicals. Import and export goods between the two countries are complementary rather than competitive.

The market growth gap in the UK for Vietnamese products is still very large because all Vietnamese exports only account for less than 1% of the total market share in total imports of goods each year of nearly 700 billion. USD (2019) for the UK. However, when the UK leaves the EU, the incentives brought by the Vietnam - EU Free Trade Agreement (EVFTA) will not be applied in the UK market. Therefore, the signing of a bilateral FTA will facilitate the reform, the opening of markets, and trade facilitation in the two countries based on inheriting relatively positive negotiation results in EVFTA. and avoid disruptions in commercial activities as a result of Brexit.