The Vietnam News Agency reported on December 30 that at 21:00 Vietnamese time on December 29, the authorized representatives (ambassadors) of the Vietnamese and British governments formally signed the "Vietnam UK free trade agreement" (ukvfta) in London, UK.
Prior to that, on December 11, 2020, Vietnam's minister of industry and trade Chen Junying and British Minister of international trade Elizabeth truss signed a memorandum to end the negotiations on the ukvfta agreement, laying the foundation for the two countries to carry out the necessary legal procedures for formal signing.
At present, the two sides are speeding up the completion of relevant domestic procedures, complying with the laws and regulations of their respective countries, and ensuring the immediate implementation of the agreement from 23:00 on December 31, 2020.
Under the background of Britain's formal withdrawal from the EU and the end of the transition period after its withdrawal (December 31, 2020), the signing of ukvfta agreement will ensure that the bilateral trade between Vietnam and Britain will not be interrupted after the end of the transition period.
The ukvfta agreement not only opens up trade in goods and services, but also incorporates many other important factors, such as green growth and sustainable development.
Britain is Vietnam's third largest trading partner in Europe. According to the statistics of the General Administration of Customs of Vietnam, in 2019, the total import and export volume of the two countries will reach US $6.6 billion, of which the export volume will reach US $5.8 billion and the import volume will reach US $857 million. From 2011 to 2019, the average annual growth rate of bilateral import and export between Vietnam and Britain is 12.1%, higher than that of Vietnam by 10%.
Vietnam's main exports to the UK include mobile phones and their spare parts, textiles and clothing, footwear, aquatic products, wood and wood products, computers and spare parts, cashew nuts, coffee, pepper, etc. Vietnam imports machinery, equipment, medicines, steel and chemicals from the UK. The import and export commodities between the two countries are complementary rather than competitive.
Every year, the total import of goods from the United Kingdom amounts to nearly 700 billion US dollars, and the total export of Vietnam to the United Kingdom only accounts for 1%. Therefore, there is still great room for the growth of Vietnamese products to the British market.
After brexit, the benefits from the Vietnam EU free trade agreement (evfta) will not apply to the UK market. Therefore, it will create conditions for the signing of a bilateral FTA on the basis of reform and opening up.
Vietnam's Ministry of industry and Trade said that some commodities with export growth potential in the UK market include textiles and clothing. In 2019, the UK mainly imports textiles and clothing from Vietnam. Although China has the largest market share in the UK market, its textile and clothing exports to the UK have declined by 8% in the past five years. In addition to China, countries exporting textiles and clothing to the UK include Bangladesh, Cambodia and Pakistan. These countries have an advantage over Vietnam in terms of tax rates. Therefore, the free trade agreement between Vietnam and the United Kingdom will bring tariff preferences, which will help Vietnam's goods have a more competitive advantage with other competitors.
