Vietnam and the UK today [December 11] officially concluded the negotiation process for the UK – Vietnam Free Trade Agreement (UKVFTA).
|Overview of the signing ceremony. Source: MoIT.|
The agreed minutes on the conclusion of the free trade agreement negotiation were signed by Vietnam’s Minister of Industry and Trade Tran Tuan Anh and the UK International Trade Secretary Liz Truss in Hanoi.
“The agreed minutes signed today is a first major step towards the signing of the UKVFTA in the coming time,” stated Mr. Anh.
The Vietnam minister said both sides started the negotiation process for the deal since August 2018.
As the UK is set to leave the EU-Vietnam Free Trade Agreement (EVFTA) after the Brexit’s transitional period ends on December 31, 2020, a new FTA between Vietnam and the UK will help ensure the continuity in bilateral trade relations.
On her part, UK International Trade Secretary Liz Truss said the UKVFTA is a milestone for the country to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which remains a priority for the UK government next year.
The fact that most of the clauses stipulated in the UKVFTA are similar to those in the EVFTA, significantly shortening the negotiation process for the two sides.
Mr. Anh suggested with the UKVFTA, Vietnam will hold advantages compared to regional countries such as China, India, Thailand, or Malaysia, those do not have a similar deal in place with the UK.
Vietnam is set to have more opportunities in attracting investment capital, technology transfer, and tourists from the UK once the Covid-19 is rolled back, while the deal presages positive outlook for the Vietnam – UK relations on the occasion of 10th anniversary of the establishment of strategic partnership.
Under the UKFTA commitments, six years since the coming into effect of the deal, the UK will remove import tariffs for 99.2% of goods imported from Vietnam, or 99.7% of Vietnam’s exports to the country.
The EU in its EVFTA with Vietnam provides the tariff rate quotas (TRQs) with 0% tariff rate for certain imported products. The UK, meanwhile, is set to review actual trade figure with Vietnam during the 2014-16 period to make a similar decision.
On the other hand, Vietnam will immediately remove tariff for 48.5% of goods from UK, or 64.5% of import turnover. The figure is set to rise to 91.8% or 97.1% of UK exports to Vietnam in six years.
The UK is Vietnam’s third largest trade partner in Europe, behind Germany and the Netherlands.
In 2019, Vietnam’s exports to the UK reached US$6.1 billion, the country imported nearly US$800 million worth of goods and products in return.
As of August 2020, the UK has 400 valid projects in Vietnam with total investment capital of US$3.6 billion, ranking 16th among countries and territories having investment projects in Vietnam.