70th anniversary of Hanoi's Liberation Day Vietnam - Asia 2023 Smart City Summit Hanoi celebrates 15 years of administrative boundary adjustment 12th Vietnam-France decentrialized cooperation conference 31st Sea Games - Vietnam 2021 Covid-19 Pandemic
Home / Economy / Trade - Service
More efforts needed for Vietnam firms to take advantage of UKVFTA
Ngoc Mai 17:25, 2021/07/05
The challenges for local firms would be to utilize preferential treatment and complying with commitments set out in the UK-Vietnam Free Trade Agreement (UKVFTA).

While the UKVFTA is seen as a promising instrument to boost Vietnam’s exports to the UK market, local enterprises should be more active in gaining a greater understanding of the deal to further penetrate this market.

 Processing shrimps for exports. File photo

Statistics from the Ministry of Industry and Trade (MoIT) revealed Vietnam’s exports to the UK rose sharply by 28% year-on-year in the five-month period to US$2.36 billion, in which phones and parts made up 23.3% of the total, or US$550 million; followed by equipment and machinery (US$306 million),  an increase of 55.1%; and footwear with US$263 million, up 24.1%.

Such figures remained positive amid the Covid-19 pandemic continues to cause disruption to global trade, while showcasing the significance of the UKVFTA, which officially took effect on May 1, 2021.

Head of the MoIT’s European-American Market Department Ta Hoang Linh said the potential remains huge for Vietnam’s major staples, including garment, footwear, or seafood, to increase their shares in the UK market.

According to Linh, under the UKVFTA’s commitments, import tariffs for fresh or frozen shrimp products into the UK are now removed to 0% from the previous 10-20% tax base, while tax rate applied to 94% of 547 groups of vegetables are set to be 0%.

“These are both export products that could benefit significantly from the UKVFTA, while Vietnam’s fruits such as lychees, dragon fruit, pineapple, or watermelon would gain advantages in the UK market as Vietnam’s competitors for tropical fruits such as Brazil, Thailand, and Malaysia have not had any trade deal with the UK,” Linh continued.

A better understanding of UKVFTA a must

Experts, however, said the challenge for local firms would be to utilize preferential treatment and complying with commitments set out in the UKVFTA.

Among them, local firms would be under pressure from Vietnam’s commitment to opening the market for goods and services from the UK, including financial services, pharmacy, chemical products, those that the latter has strong expertise.

The UK also imposes strict technical barriers for imported products, especially the sanitary and phytosanitary (SPS) requirements with high standards on quality consistency and food hygiene.

To ensure greater utilization of the UKVFTA, the Director of the WTO Center under the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Thu Trang said Vietnamese firms should prioritize improving product quality and value for higher competitiveness.

“In line with optimizing the production process, local firms have to pay more attention to social responsibility and working environment standard as these are requirements set in the deal,” Trang said.

Trade Counsellor at Vietnam’s Embassy to the UK Nguyen Canh Cuong said major supermarkets and retailers in the UK are placing orders from credible suppliers to diversify sources and better control product quality and origin.

“Vietnamese firms could consider registering as suppliers for major UK supermarkets by following instructions on their websites,” Cuong noted.

Cuong also advised local firms to seek credible trade firms or distributors for their products in the UK via www.ukdirectory.co.uk or www.esources.co.uk.

"Vietnam and the UK have agreed on the soon organization of the Vietnam-UK Joint Economic and Trade Committee (JETCO 12), scheduled to take place under virtual format by late September, to boost trade and investment after a period of disruption as a result of the Covid-19 pandemic,” said Minister of Industry and Trade Nguyen Hong Dien.
TAG: Vietnam UKVFTA Covid-19 pandemic phones parts machinery equipment UK
Other news
11:23, 2024/05/24
Vietnam continues to promote political stability for long-term growth: Deputy PM
The Vietnamese Government remains committed to helping investors overcome challenges, turn risks into opportunities, and achieve rapid and sustainable development.
16:29, 2024/05/23
Japan to support Vietnam in developing highly skilled workforce in emerging fields
The Japan Business Federation (KEIDANREN) considers Vietnam one of its most important partners and is committed to cooperation in digital and green transformation.
12:19, 2024/05/23
Dutch King and Queen to visit Vietnam soon
Close bilateral ties open up opportunities for cooperation in potential fields such as high-tech, innovation, and the exploitation of critical minerals.
17:49, 2024/05/21
Vietnam eyes World Bank’s global logistics top 40 by 2035
Efforts should be made to increase the competitiveness of domestic enterprises to capture a larger market share and elevate the position of Vietnam's logistics sector.
16:08, 2024/05/21
India’s Infosys sees Vietnam as credible partner in digitalization age
Infosys stands ready to work with Vietnam to develop the IT sector and foster innovation, big data, AI, and other emerging areas.
09:38, 2024/05/21
Vietnam’s wine market to reach US$167B in 2027
Vietnam, a nation of 100 million people, has seen a rise in consumption due to the growing middle class, making it a potential market for international wine exporters.