Vietnam – UK complete negotiations on bilateral trade agreement

"The signing of the minutes today is an important step for the two countries to move towards signing the UKVFTA in the near future," said Minister of Industry and Trade Tran Tuan Anh.

According to Mr. Tran Tuan Anh, the two countries have been discussing this agreement since August 2018. Due to Brexit,Free Trade AgreementThe European Union – Vietnam Free Trade Agreement (EVFTA), which came into effect on August 1, will no longer apply to the UK after December 31, 2020. An early FTA between the two countries will help ensure uninterrupted trade relations.

UK International Trade Secretary Elizabeth Truss said the UKVFTA is also an important step towards the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).join CPTPPis a priority for the UK Government, expected in early 2021.

The terms of the UKVFTA will largely be similar to the EVFTA, so the two countries do not need to spend a decade negotiating. Both sides want to conclude the deal as soon as possible to boost the economic recovery after Covid-19.

The Ministry of Industry and Trade emphasized that through the UKVFTA, Vietnam will have more competitive advantages compared to strong competitors from China, India, Thailand, Malaysia, Indonesia... which are countries with no prospect of signing an FTA with the UK in the coming years. On the other hand, Vietnam will have more opportunities for cooperation, investment, technology transfer, and attracting British tourists after Covid-19 ends. The agreement also creates a positive message in the general relationship between Vietnam and the UK, especially when the two sides have just issued a Joint Statement on the vision of bilateral cooperation on the occasion of the 10th anniversary of the strategic partnership between the two countries.

According to the commitment, after 6 years of the UKVFTA coming into effect, the UK will eliminate import taxes on 99.2% of tariff lines, equivalent to 99.7% of Vietnam's export turnover. The EU has committed to providing Vietnam with a tariff quota (TRQ) with an import tax of 0% for a number of products. For its part, the UK said it will base its decision on EU statistics on actual bilateral trade between Vietnam and the UK in the period 2014 - 2016. The UK also committed to reviewing and increasing the TRQ for Vietnamese rice products after 3 years from the date the UKVFTA comes into effect.

Export industries that benefit greatly from this agreement are seafood, rice, textiles, wood, vegetables, leather and footwear...

On the contrary, Vietnam will eliminate tariffs as soon as the agreement comes into effect with 48.5% of tariff lines, accounting for 64.5% of import turnover. After 6 years, the number of tariff lines eliminated will increase to 91.8%, equivalent to 97.1% of export turnover and after 9 years it will be about 98.3% of tariff lines (accounting for 99.8% of turnover).

In addition, the Agreement also provides commitments on rules of origin, customs and trade facilitation, food safety measures, technical barriers to trade, trade in services (including general regulations and market opening commitments), investment, trade defense, competition, state-owned enterprises, government procurement, intellectual property, trade and sustainable development, cooperation and capacity building, legal - institutional. The commitments of the UKVFTA are basically based onEVFTAbut with adjustments suitable for both countries.

The UK is currently Vietnam's third largest trading partner in Europe (after Germany and the Netherlands). In terms of investment, by the end of August 2020, the UK had 400 valid investment projects in Vietnam, with a total registered capital of 3.6 billion USD, ranking 16th among countries and territories with investment projects in Vietnam. The areas in which the UK has strengths and Vietnam has a need for cooperation in the coming time are renewable energy, sustainable consumption production, greenhouse gas emission reduction, etc.