The U.K. is currently Vietnam’s third largest trading partner in Europe after Germany and the Netherlands. The total import-export turnover of the two countries reached $6.6 billion last year, (exports stood at $5.8 billion and imports $857 million). In the period 2011-2019, the growth rate of Vietnam – U.K. bilateral import and export turnover increased by an average of 12.1 %/year.
Under the UKVFTA, the U.K. will abolish import taxes on 99.2 % of tariff lines within six years, equivalent to 99.7% of export turnover of Vietnam to the country. Vietnam export industries expected to benefit greatly from this agreement include seafood, rice, textiles, wood, vegetables and footwear.
In return, Vietnam will remove 48.5% of tariff lines, accounting for 64.5% of import turnover as soon as the agreement comes into effect. After six years, 91.8% of tariff lines will have been abolished, equivalent to 97.1% of the import turnover, and this will further increase to 98.3% of the tariff lines (accounting for 99.8% of the turnover).
Image: Vietnam Industry-Trade Minister Tran Tuan Anh and U.K. International Trade Secretary Elizabeth Truss signed a joint ministerial statement on the conclusion of the free trade pact negotiations on December 11 after two years of discussion.
In addition, the agreement also includes commitments on rules of origin, customs and trade facilitation, food hygiene and safety measures, and on technical barriers to trade and services, investment, trade defense, competition, state-owned firms, government procurement, and intellectual property.
The Ministry of Industry and Trade said earlier this month that Vietnam will have more competitive advantages compared to countries like China, India, Thailand, Malaysia and Indonesia, who are not likely to conclude trade agreements with the U.K. for years to come.
Vietnam will also have more opportunities for cooperation, investment, technology transfer, and attracting British tourists as the Covid-19 pandemic is contained. The conclusion of negotiations today also sends a positive message about the relationship between Vietnam and the U.K. as the two countries celebrating 10 years of their Strategic Partnership Agreement, it said.