Businesses should seize opportunities under UKVFTA: Deputy Minister hinh anh 1Many commodities such as rice can see more export opportunties to the UK (Photo: VNA)
Hanoi (VNA) - Deputy Minister of Industry and Trade Tran Quoc Khanh has urged Vietnamese enterprises to seize opportunities in the UK market, as the potential under the new free trade agreement remains huge.

Talking to reporters, Khanh noted that after leaving the European Union (EU), the UK is actively negotiating free trade agreements with many partners around the world, including some ASEAN countries. Therefore, the competitive advantage Vietnam has will soon be lost if the UK inks similar pacts with other countries.

According to the official, Vietnamese goods exported to the UK account for less than 1% of the European country's total imports worth around 600-700 billion USD. On the other hand, the UK’s exports also account for a small portion of Vietnam's imports.

Therefore, he asked Vietnamese exporters to actively study how to take advantage of opportunities under the free trade agreement so as to increase their market share in the UK.

He said that the Government has issued an action plan for ministries and sectors to effectively implement the UKVFTA, including helping businesses promote themselves in the relatively new and largely lucrative market.

But the enterprises themselves must also actively study its content, find out where opportunities present themselves, and then proactively learn about the UK’s legal regulations for imports.

As a result, businesses can find ways to make their products meet this market’s requirements, regularly improve the quality of products and goods, and enhance their own competitiveness, Khanh added.

The UK-Vietnam Free Trade Agreement was officially signed in London on December 29, 2020. It was applied temporarily from January 1, 2021, and officially became effective on May 1, 2021.

Data from the MoIT showed that one year after the UKVFTA took temporary effect, trade exchange between the two countries has grown well. In 2021, two-way trade hit 6.61 billion USD, up 17.24% year-on-year, in which Vietnam's exports to the UK increased by 16.4% and the latter's exports rose by 24%.

In 2021, there were 48 direct investment projects from the UK into Vietnam. Newly registered capital totaled more than 53 million USD, a year-on-year surge of 157%. This helped maintain its total direct investment in the Southeast Asian nation at 4 billion USD. Currently, the UK is among 12 countries and territories with the largest FDI capital in Vietnam.

All these figures show that the UKVFTA has contributed importantly to trade ties between the two countries, he said, adding that the biggest contribution of the deal is to keep the bilateral free trade relationship uninterrupted when the UK left the European Union.

The deal introduces measures that encourage the development of bilateral trade. In particular, the UK’s import tariffs will be eliminated by up to 99.2% within six years, thus creating great advantages for Vietnam's exports.

In the first year that the UKVFTA came into effect, many Vietnamese goods, especially agricultural products, have moved through the system to good effect. There has been nice growth in the export of pepper, vegetables, handicrafts and ceramics, which Vietnam has strengths and relatively big tax reductions.

In addition, the UK also grants Vietnam an additional tariff quota, which allows the duty-free import of 14 commodities into the UK, including rice.

Vietnam’s 36 geographical indications are protected by the UK, especially for many renowned Vietnamese products such as Ban Me Thuot coffee and Phu Quoc fish sauce. This will open up opportunities for these products to gain a foothold in this market.

The deputy minister affirmed that the agreement was negotiated well, with a maximum reduction on taxes to goods that move through the agreement. It can benefit businesses much if they can take advantage of those opportunities, he said.

Regarding ways to better improve the investment environment to attract more UK investors, the UKVFTA is expected to help Vietnam accelerate its institutional reform, improve the investment environment in a modern and transparent manner and create maximum convenience for businesses./.