Rising industries

The Hanoitimes – The initial results of the UK-Vietnam Free Trade Agreement promise to continue creating new impetus for economic and trade cooperation between the two countries in the coming time.

Since the UK-Vietnam Free Trade Agreement (UKVFTA) took effect on January 1, the bilateral trade turnover between the two countries has recorded a spectacular rise in the context of exports disruption due to the Covid-19 pandemic, according to the Ministry of Industry and Trade.

Vietnamese rice exports to EU. Photo: Vinaseed

According to the General Department of Vietnam Customs, in January, the total trade turnover between Vietnam and the UK reached US$657.3 million, up 78.6% over the same period last year.

Vietnam’s exports to the UK reached US$598 million worth of goods, up 84.6% compared to last January and 56.5% to last December.

Among Vietnam’s exports to the UK,  farm produce attained stable and positive growth in January, with seafood reaching US$19.7 million, representing a rise of 18.1% over the same period last year, and vegetables and fruits with US$1 million, increasing 148.6%.

Chart: Phi Nhat

Vietnamese shipments to the UK get opportunities to rise drastically and expand market share thanks to many tariff preferential treatment under the agreement, according to the MoIT.

Under the trade deal, more than 94% of the total 547 tariff lines of vegetable and fruit will be reduced to zero. Many Vietnamese key products such as litchi, longan, rambutan, dragon fruit, pineapple and melon will have more market access advantages over tropical fruits originating from rivals such as Brazil, Thailand and Malaysia, the countries that have not signed an FTA with the UK.

Chart: Phi Nhat

Shipments of the group of processing and manufacturing industries to the UK achieved an impressive growth in January such as phones and components (up 371.6% over the same period last year), followed by machinery, equipment and spare parts (109.9%), computers and electronic components (91%); iron and steel of all kinds (11%).

In 2020, the bilateral trade reached US$5.64 billion in value, in which Vietnam exported goods worth US$4.95 billion to the UK and enjoyed a trade surplus of US$4.27 billion. The UK continued to be the third largest trading partner of Vietnam in Europe, behind Germany and the Netherlands.

The Hanoitimes – The initial results of the UK-Vietnam Free Trade Agreement promise to continue creating new impetus for economic and trade cooperation between the two countries in the coming time.

Since the UK-Vietnam Free Trade Agreement (UKVFTA) took effect on January 1, the bilateral trade turnover between the two countries has recorded a spectacular rise in the context of exports disruption due to the Covid-19 pandemic, according to the Ministry of Industry and Trade.

Vietnamese rice exports to EU. Photo: Vinaseed

According to the General Department of Vietnam Customs, in January, the total trade turnover between Vietnam and the UK reached US$657.3 million, up 78.6% over the same period last year.

Vietnam’s exports to the UK reached US$598 million worth of goods, up 84.6% compared to last January and 56.5% to last December.

Among Vietnam’s exports to the UK,  farm produce attained stable and positive growth in January, with seafood reaching US$19.7 million, representing a rise of 18.1% over the same period last year, and vegetables and fruits with US$1 million, increasing 148.6%.

Chart: Phi Nhat

Vietnamese shipments to the UK get opportunities to rise drastically and expand market share thanks to many tariff preferential treatment under the agreement, according to the MoIT.

Under the trade deal, more than 94% of the total 547 tariff lines of vegetable and fruit will be reduced to zero. Many Vietnamese key products such as litchi, longan, rambutan, dragon fruit, pineapple and melon will have more market access advantages over tropical fruits originating from rivals such as Brazil, Thailand and Malaysia, the countries that have not signed an FTA with the UK.

Chart: Phi Nhat

Shipments of the group of processing and manufacturing industries to the UK achieved an impressive growth in January such as phones and components (up 371.6% over the same period last year), followed by machinery, equipment and spare parts (109.9%), computers and electronic components (91%); iron and steel of all kinds (11%).

In 2020, the bilateral trade reached US$5.64 billion in value, in which Vietnam exported goods worth US$4.95 billion to the UK and enjoyed a trade surplus of US$4.27 billion. The UK continued to be the third largest trading partner of Vietnam in Europe, behind Germany and the Netherlands.

Demand for workers in HCM City and other manufacturing hubs in the south has been high and rising after the Tet (Lunar New Year) holidays driven by a business recovery as COVID-19 recedes.

The Hanoitimes – The trade deal is expected to spark new opportunities for Vietnam as one of the few Asian countries to secure an exclusive FTA with the UK.

The signing of the UK – Vietnam Free Trade Agreement (UKVFTA) has ensured continuity of mutual trade after the end of Brexit’s transitional period on December 31, 2020.

Vietnam’s Minister of Industry and Trade Tran Tuan Anh and UK International Trade Secretary Liz Truss at the signing of the free trade agreement in Hanoi on December 11. Photo: Nhac Nguyen/AFP/Getty Images

The UKVFTA, which was signed in Hanoi last week, will reproduce similar effects from the EU – Vietnam Free Trade Agreement (EVFTA) as the UK will be out of the EU by the end of 2020, according to Savills Vietnam.

For Vietnam, the UKVFTA will primarily boost exports, while for the UK, it is considered an essential first step in gaining access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said Savills Vietnam, one of the largest real estate practice in the country.

Under the UKVFTA, the UK will first eliminate 65% of tariffs moving up to 99% after seven years to boost bilateral trade. Vietnam will first remove 48.5% of tariffs from UK imports, which after six years, will rise to around 91.8% or 97.1%. The tariff rate quotas provided in the EVFTA have been agreed to guide those in the UKVFTA, after the UK reviews their actual trade value with Vietnam.

In addition, UKVFTA will spark new opportunities for Vietnam as one of the few Asian countries to secure an exclusive FTA with the UK, Savills Vietnam said.

As the representative of a leading UK company in Vietnam, Mr Matthew Powell, Director of Savills Hanoi, who attended the UKVFTA signing ceremony last week, shared his outlook for Vietnam and the economic development.

The agreement will facilitate extensive benefits and opportunities for both sides. The UK has been Vietnam’s third largest trading partner in Europe, with 400 ongoing projects worth over US$3.6 billion as of August 2020. With the FTA, more investment capital, technology transfer, and transactions are expected from the UK.

Mr. Matthew Powell said both business communities have developed mutually strong and lasting relationships and he hopes to see more UK investments into services, products, and more business expansions as the agreement comes into effect.

“The UK is known for its consultancy expertise, particularly in real estate. Besides being the sector of choice for local investors, property remains the safest and most effective investment channel. Our 25 years in Vietnam has given us a greater understanding of the culture and business environment which will add value to strengthening and developing even greater business ties between the two countries,” Mr. Powell added.

The Hanoitimes – A trade deal in place will help ensure continuity in trade relations between the UK and Vietnam after Brexit’s transitional period ends on December 31, 2020.

Vietnam and the UK today [December 11] officially concluded the negotiation process for the UK – Vietnam Free Trade Agreement (UKVFTA).

Overview of the signing ceremony. Source: MoIT.

The agreed minutes on the conclusion of the free trade agreement negotiation were signed by Vietnam’s Minister of Industry and Trade Tran Tuan Anh and the UK International Trade Secretary Liz Truss in Hanoi.

“The agreed minutes signed today is a first major step towards the signing of the UKVFTA in the coming time,” stated Mr. Anh.

The Vietnam minister said both sides started the negotiation process for the deal since August 2018.

As the UK is set to leave the EU-Vietnam Free Trade Agreement (EVFTA) after the Brexit’s transitional period ends on December 31, 2020, a new FTA between Vietnam and the UK will help ensure the continuity in bilateral trade relations.

On her part, UK International Trade Secretary Liz Truss said the UKVFTA is a milestone for the country to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which remains a priority for the UK government next year.

The fact that most of the clauses stipulated in the UKVFTA are similar to those in the EVFTA, significantly shortening the negotiation process for the two sides.

Mr. Anh suggested with the UKVFTA, Vietnam will hold advantages compared to regional countries such as China, India, Thailand, or Malaysia, those do not have a similar deal in place with the UK.

Vietnam is set to have more opportunities in attracting investment capital, technology transfer, and tourists from the UK once the Covid-19 is rolled back, while the deal presages positive outlook for the Vietnam – UK relations on the occasion of 10 ^th anniversary of the establishment of strategic partnership.

Under the UKFTA commitments, six years since the coming into effect of the deal, the UK will remove import tariffs for 99.2% of goods imported from Vietnam, or 99.7% of Vietnam’s exports to the country.

The EU in its EVFTA with Vietnam provides the tariff rate quotas (TRQs) with 0% tariff rate for certain imported products. The UK, meanwhile, is set to review actual trade figure with Vietnam during the 2014-16 period to make a similar decision.

On the other hand, Vietnam will immediately remove tariff for 48.5% of goods from UK, or 64.5% of import turnover. The figure is set to rise to 91.8% or 97.1% of UK exports to Vietnam in six years.

The UK is Vietnam’s third largest trade partner in Europe, behind Germany and the Netherlands.

In 2019, Vietnam’s exports to the UK reached US$6.1 billion, the country imported nearly US$800 million worth of goods and products in return.

As of August 2020, the UK has 400 valid projects in Vietnam with total investment capital of US$3.6 billion, ranking 16 ^th among countries and territories having investment projects in Vietnam.