06:00 | 11/01/2021 Cooperation
(VEN) - The United Kingdom-Vietnam Free Trade Agreement (UKVFTA) was officially inked in London on December 29, 2020. The two countries’ ambassadors were authorized to sign the deal as top Vietnamese officials were unable to travel to the UK amid the Covid-19 pandemic.
Given the UK’s final departure from the European Union on December 31, the trade pact will prevent disruptions to bilateral trade. Minister of Industry and Trade Tran Tuan Anh affirmed that based on the commitments and standards inherited from the EU-Vietnam Free Trade Agreement (EVFTA), the UKVFTA will be a new driving force to promote bilateral trade and investment relations.
The UKVFTA was negotiated based on the principles of the EVFTA with necessary adjustments to ensure the deal conforms to the UK-Vietnam bilateral trade framework. Basically, the contents of the UKVFTA are similar to those of the EVFTA, addressing trade in goods (including general regulations and market access commitments), rules of origin, customs and trade facilitation, sanitary and phytosanitary measures (SPS), technical barriers to trade (TBT), trade in services (including general regulations and market access commitments), investment, trade remedies, competition, state-owned enterprises (SOEs), government procurement, intellectual property, trade and sustainable development, cooperation and capacity building.
In recent years, the UK has been Vietnam’s third largest trade partner in Europe after Germany and the Netherlands. According to the General Department of Vietnam Customs, two-way trade reached US$6.6 billion in 2019. During the 2011-2019 period, the growth rate of bilateral trade turnover increased by an average of 12.1 percent per year.
Vietnam mainly exports garments and textiles, footwear, timber and wood products, and seafood to the UK, while importing pharmaceuticals, machinery and equipment. Although Vietnam’s exports to the UK have increased sharply, the export revenue has only made up less than one percent of the UK’s import value, leaving substantial potential and opportunities for Vietnamese goods to enter the UK if Vietnam knows how to optimize the trade deal.