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UK and Vietnam get closer to a post-Brexit free trade deal

Van Dat Saturday | 12/12/2020 19:09

Britain and Vietnam on Friday concluded a free trade agreement that will see 99 percent of tariffs between the two economies cut after seven years, said Ministry of Industry and Trade.

The negotiation started since August 2018 was concluded a few weeks before Britain completes its transition out of the European Union on December 31, when Vietnam’s trade deal with the EU will no longer apply to the UK.

The deal scheduled to be signed early next year help Britain to replace the existing EU-Vietnam Free Trade Agreement, ensuring its access to preferential tariffs in Vietnam, one of the fastest growing economies in Asia.

This will further boost the two nations’ bilateral trade volume which has tripled between 2010 and 2019 to $7.58 billion. Vietnam will see $151 million in tariff savings on its exports by the time the deal is fully implemented, according to a statement released on Friday.

The UK is Vietnam’s third-largest trading partner in Europe. The Southeast Asian nation sent around $6 billion worth of goods to the UK last year, while UK businesses sent $794 million pounds worth of goods to Vietnam, Bloomberg cited the joint statement.

Vietnam will have great opportunities and benefits to promote the export of its key products from the UKVFTA. The export sectors to benefit are seafood, rice, textiles, wood, vegetables, leather and shoes, according to a statement on Government’s website.

The country’s export to the UK has much room to grow since the Vietnamese goods account for less than 1 percent of Britain’s 2019 import value.

Currently, Vietnam's textile and garment exports to the UK account for only 2.77 percent of its total import. Therefore, this industry still has great room for development and increase in turnover.

Seafood is Vietnam's main export sector with abundant production capacity and supply. The demand for importing seafood from the UK is large, about $4.4 billion per year. Vietnam’s seafood export to the country accounts for 6.7 percent.

Britain has expressed its desire to join the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), that will slash tariffs across much of the Asia-Pacific, welcoming Vietnam’s support for that goal in September.

At the meeting with UK Trade Secretary Elizabeth Truss, Prime Minister Nguyen Xuan Phuc affirmed Vietnam always sees the UK as its major and friendly partner.

PM Phuc voiced his support for the UK to join the Comprehensive and Progressive Agreement for CPTPP and vowed to create favorable conditions for British investors to do business in Vietnam.

Trade Secretary Elizabeth Truss said she will sign an agreement to confirm the conclusion of talks on a free trade deal between the two countries during her ongoing Vietnam visit, expressing her belief that the trade pact will bring about practical benefits to both countries.

► Vietnam and Britain to conclude free trade agreement talks on Friday

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