This comes as the UKVFTA officially took effect from 23:00 on December 31, 2020, thereby signaling the beginning of a new phase in the relationship between the two countries, particularly with regard to the development of key commercial sectors. The UKVFTA will not only serves to create the liberalisation of trade in goods and services, but also helps to integrate many other important factors as part of green growth and sustainable development.
At present, the nation’s export staples to the UK include phones and components, garments and textiles, footwear, seafood, timber and wood products, computers and their components, cashew nuts, coffee, and pepper. In return, the country imports goods such as machinery, equipment, pharmaceuticals, steel, and chemicals from the UK. Indeed, imports and exports between the two are considered to be complementary as opposed to being competitive.
According to the Ministry of Industry and Trade (MoIT), 2019 saw the UK mainly import garment products, such as suits, jackets, blazers for women or girls, outerwear, gowns for women or girls, tights, pullovers heads, cardigans, giles, and similar items from the Vietnamese market.
With regard to footwear, despite ranking second in the world in terms of exports, Vietnamese footwear exports only account for 8% of global export turnover, while China makes up roughly 40%.
The UK is also viewed as a potential buyer of Vietnamese rice, with last year’s rice exports to this market witnessing a significant leap forward, with turnover growth reaching 376%. Despite this remarkable figure, the tariff on this item in 2019 remained high, therefore making it difficult to compete with other countries.
Concerning seafood products, the MoIT assessed that the country enjoys advantages in experience, production capacity, and abundant supply. Import demand for the UK’s seafood products remain fairly large, at roughly US$4.4 billion annually, while the country’s export value accounts for only 6.7%.
Vietnamese frozen tra fish, also known as pangasius, could be a benefactor of greater export opportunities to the UK as the nation is the leading supplier of the product, offering reasonable prices, whilst the production process of many Vietnamese firms is accepted by both the EU and UK markets.
For wood products, the UK represents a market that needs to import a large number of finished products and timber materials each year, whilst the country is currently the sixth largest wooden furniture exporter in the world with an export value of US$421.8 million, holding 3.6% of the UK’s import market share.