Minister of Industry and Trade Tran Tuan Anh and UK Secretary of State for International Trade Liz Truss sign the agreed minutes on the conclusion of negotiations over the UK-Vietnam Free Trade Agreement on December 11. (Photo: VNA)London (VNA) - The conclusion of the UK-Vietnam Free TradeAgreement (UKVFTA) demonstrates the importance of Vietnam as a market and itsheightened position in the eyes of the UK, Vietnamese Ambassador to the UK TranNgoc An told the Vietnam News Agency after the finalisation of the bilateraltrade deal in Hanoi on December 11.
Based on the terms of the EU-Vietnam Free Trade Agreement (EVFTA), theUKVTFA is a new-generation, high-quality bilateral agreement that reducestariffs to zero and eliminates non-tariff barriers on most goods from bothcountries under a short roadmap, An said. It also contains important provisionson intellectual property rights, investment liberalisation, and sustainabledevelopment, and commitments to meet the standards of the International LabourOrganisation (ILO) and the UN Framework Convention on Climate Change.
The trade pact is significant because it ensures there will be nointerruption to Vietnam-UK bilateral trade because of Brexit, the ambassadorsaid, adding that the deal will enter into force on January 1, 2021, rightafter the UK’s post-Brexit transition expires on December 31.
This would facilitate the continued trade of goods between the two sidesunder the EVFTA, according to An.
He added that the UKVFTA will help boost the volume of goods from bothsides entering the other’s market and will enhance economic cohesion betweenthe two strategic partners. The deal will also pave the way for a new wave offoreign direct and indirect investment from the UK in Vietnam in the former’s areasof strength, such as renewable energy and environmental technology.
He cited a proposal from a major British corporation to invest tens ofbillions of USD in wind power production, turbine manufacturing, andelectricity transmission in Vietnam as an example. The UK can offer the most inthe fields of pharmaceuticals, machinery, equipment, chemicals, automobiles, andbanking and insurance, he said.
Meanwhile, a number of large Vietnamese firms are enthusiastic about seekinginvestment opportunities in the UK, the diplomat continued. As soon as thetrade deal takes effect, Vietnamese rice will enjoy a zero percent import tariffcompared to 17.5 percent now. A number of Vietnamese fisheries products, suchas prawns and fish, will also benefit from lower customs duties.
Vice Chairman of the Vietnam-UK Network, Paul Smith, said the UKVFTAwill make more UK firms consider Vietnam as a new destination. With more than20 years of experience in the country, he finds doing business here quite easy.
The Vietnamese Government is very down to earth and open to foreigninvestment, he said, adding that it has also taken major steps forward inadopting rules in trade, copyright issues, and intellectual propertyprotection.
He expressed his belief that the number of British businesses present inVietnam will increase considerably in the future.
Trade Counsellor of Vietnam to the UK Nguyen Canh Cuong said the agreementwill ensure the non-interruption of trade between the two countries andmaintain the recovery of Vietnam’s exports to the UK. He named garments,sportswear, furniture, computers, mobile phones, tea, coffee, pepper, prawns,specialty rice, tropical fruit, and construction steel as among Vietnameseproducts likely to be competitive in the UK.
In the service sector, Vietnam also holds a competitive edge in airfreight and software design services, he added. As the UK’s demand for such productsis large, the trade deal will help Vietnamese enterprises expand their marketshare in the country, he said.
Minister of Industry and Trade Tran Tuan Anh and UK Secretary of Statefor International Trade Liz Truss signed the agreed minutes on the conclusionof negotiations over the UKVFTA on December 11. Ninety-nine percent of tariffson goods traded between Vietnam and the UK will be cut at the end of the tariffelimination roadmap, meaning Vietnam will save about 114 million pounds onexports to the UK, while the figure for the UK will be 36 million pounds.
Two-way trade has developed steadily since the two countries establisheda strategic partnership in 2010. Over the last three years, Vietnam has exportedaround 6 billion USD worth of goods annually to the UK, accounting for lessthan 1 percent of the country’s total imports of nearly 700 billion USD.Meanwhile, Vietnam’s imports from the UK have stood at about 1 billion USD eachyear.
Vietnam’s shipments to the UK amounted to some 4.1 billion USD in the first10 months of this year, down 14 percent against a year earlier. Exports haveshown signs of recovery since August, however, thanks to the positive effectsof the EVFTA, with October’s figure up 1.3 percent month-on-month to more than477 million USD./.
VNA
