The UK-Vietnam free trade agreement (UKVFTA) officially came into effect on May 1, 2021.
The UK-Vietnam joint statement released by the British Ministry of Commerce states that with a total trade value equivalent to £ 5.1 billion, the agreement creates a solid foundation for trade and investment development for businesses in both countries.
“In addition, UKVFTA ensures that the tariff benefits between the UK and Vietnam remain intact. As much as 65% of import and export tariff lines have been eliminated and this figure will increase to 99% after six years.
The UKVFTA is also an important step forward for the UK to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which Vietnam is one of the member economies.”
CPTPP is one of the most important free trade agreements in the world, accounting for 13% of global GDP in 2019.
If the UK joins the CPTPP, the above figure will increase to 16% of global GDP, according to forecasts of London and Hanoi.
“Regarding intellectual property rights, the two sides continue to commit to a high level of protection. British iconic products, including Scottish whiskey, Scottish farmed salmon, Irish whiskey, and Irish ice cream, as well as 36 Vietnamese agricultural products, including Moc Chau tea, Buon Ma Thuot coffee, and rice Hai Hau and Phu Quoc fish sauce, continue to be protected,” said the statement on May 1.
UKVFTA was officially signed in London, UK on December 29, 2020, and will be applied temporarily from January 1, 2021.
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According to statistics of the General Department of Customs, in the first 3 months of 2021, exports to the UK reached nearly $1.6 billion, up 22.1% compared to last year.
UKVFTA is considered as an agreement to maintain favorable trade conditions and economic benefits through market access commitments already included in the Free Trade Agreement between Vietnam and the European Union (EVFTA).
At the end of March 2021, the representatives of the two countries exchanged notes in Hanoi to affirm the effective date of UKVFTA and committed to implementation “in order to ensure the maximum use of opportunities brought about by this agreement for Vietnamese people and businesses.”
According to the Vietnam Trade Office in the UK market, the UK is Vietnam’s third-largest trading partner in Europe.
“However, in order for Vietnamese goods to penetrate deeply into the UK market, trade experts say that Vietnamese businesses must understand the local culture as well as learn more about payment methods and distribution channels there and settle commercial disputes here,” wrote the VNA business newsletter.
This newsletter describes “the market growth space in the UK for Vietnamese products is still very large, especially for Vietnam’s strong export products such as wood products, furniture, textiles, rubber, coffee, rice, shoes … ”