Vietnamese goods are able to expand presence in UK under trade deal

A garment factory near Hanoi. - Vietnam News/ANN

HANOI, June 12 (Bernama): The UK-Vietnam Free Trade Agreement (UKVFTA), which officially took effect on May 1, is believed to herald a new era for Vietnamese goods to gain a foothold in a market with strong purchasing power, according to Vietnam News Agency quoting the Dau tu (Vietnam Investment Review) newspaper.

Vietnam’s exports to the UK rose nearly 27.4 per cent year-on-year in the opening four months of 2021, to US$1.94 billion, data from the General Department of Vietnam Customs shows, which is considered an impressive result amid Covid-19’s impact on global trade.

The UKVFTA, which temporarily came into force on Jan 1 this year, is hoped to create more favourable conditions for exports to the UK now it is officially in effect.

During the first five months of this year, exports to the UK grew more than 20 per cent year-on-year to about US$2.4 billion.

The UK is currently Vietnam’s third-largest trade partner in Europe.

Data from Vietnam Customs also shows that bilateral trade reached US$6.6 billion in 2019, including US$5.76 billion worth of exports from Vietnam, placing the UK ninth among the country’s main export destinations.

Trade revenue fell slightly last year to US$5.642 billion, due to COVID-19.

Vietnamese goods currently make up no more than one per cent of the UK’s total annual imports of over US$700 billion, the newspaper pointed out.

For example, although Vietnam supplies the largest volume of coffee to the UK, the value accounts for just 10.9 per cent of the UK’s total imports, ranking Vietnam fourth after France, Germany, and Brazil.

Dau tu cited Nguyen Canh Cuong, Trade Counsellor of Vietnam to the UK, as recommending that businesses further tap into the market since Vietnamese coffee will become more competitive thanks to the UKVFTA, under which most coffee products from the country will benefit from an import tariff of zero per cent.

Meanwhile, the UK imported over US$1.6 billion worth of fruit and vegetables in 2019, with only some US$10 million coming from Vietnam.

Under the new trade pact, fruit and vegetables from Vietnam will receive a considerable advantage, as 94 per cent of the 547 tariff lines on fruit, vegetables, and related products will be slashed to zero per cent.

Cuong said that to expand their market share, fruit and vegetable exporters should sustainably meet the UK’s legal regulations on food safety, plant quarantine, and origin traceability.

Anh Dao Carrick, a trade specialist in the UK, suggested Vietnamese enterprises join hands with British distributors to develop their own brands and access the market, work to meet importers’ strict technical and quality requirements, and pay due regard to labelling issues. - Bernama

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