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UKVFTA will continue the Vietnam-UK trade relationship when EVFTA no longer applies to the UK after December 31, 2020 due to Brexit.
On the afternoon of December 11, the Minister of Industry and Trade, Tran Tuan Anh, and the British Minister of International Trade, Elizabeth Truss, signed a Memorandum of Understanding on the conclusion of the Free Trade Agreement between Vietnam and the United Kingdom ( UKVFTA).
“The signing of the minutes today is an important step for the two countries towards the anticipated signing of the UKVFTA in the near future,” said Industry and Trade Minister Tran Tuan Anh.
According to Tran Tuan Anh, the two countries have been discussing this agreement since August 2018. Due to Brexit, the Free Trade Agreement between the European Union and Vietnam (EVFTA), in force since August 1, will no longer apply to the Kingdom. United after December 31, 2020. The early presence of an FTA between the two countries will help maintain uninterrupted trade relations.
UK International Trade Minister Elizabeth Truss said UKVFTA is also an important step towards joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Currently, joining the CPTPP is a priority for the UK government, expected in early 2021.
Industry and Trade Minister Tran Tuan Anh and International Trade Minister Elizabeth Truss at the signing ceremony on the afternoon of December 11. Image: Many.
UKVFTA terms will be largely the same as EVFTA, therefore, the two countries do not need to go through a decade of negotiations. The two parties want to conclude the agreement as soon as possible to promote economic recovery after Covid-19.
The Ministry of Industry and Trade emphasized that through UKVFTA, Vietnam will have more competitive advantages compared to strong competitors from China, India, Thailand, Malaysia, Indonesia … who do not promise to sign. conclude an FTA with the United Kingdom for many years. On the other hand, Vietnam has more opportunities for cooperation, investment, technology transfer and attraction of British tourists after the end of Covid-19. The Agreement also created a positive message in the mutual relationship between Vietnam and the United Kingdom, especially as 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 entry into force of the UKVFTA, the United Kingdom will eliminate import tax on 99.2% of tariff lines, which is equivalent to 99.7% of export turnover from Vietnam. The EU has committed to granting Vietnam a tariff quota (TRQ) with a 0% import tax for some products. For its part, the UK said it will rely on EU statistics on actual bilateral trade between Vietnam and the UK in 2014-2016 to decide on a similar policy. The UK also commits to review and increase the amount of TRQs for Vietnam rice products after 3 years from the UKVFTA effective date.
The export industries that benefit greatly from this agreement are the sea, rice, textiles, wood, vegetables, footwear …
On the contrary, Vietnam will abolish the tariffs as soon as the agreement enters into force with 48.5% of the tariff lines, which represents 64.5% of the turnover of imports. After 6 years, the number of tariff lines will be eliminated, increasing to 91.8%, equivalent to 97.1% of the export turnover, and after 9 years it will be around 98.3% of the tariff lines ( representing 99.8% of the turnover).
In addition, the Agreement also includes commitments on rules of origin, customs and trade facilitation, food safety and hygiene measures, and technical barriers to trade and services. including general regulations and commitments to open markets), investment, trade defense, competition, state companies, public procurement, intellectual property, trade and sustainable development, capacity building, legal – institutional. UKVFTA commitments are basically based on EVFTA, but adjusted to suit the two countries.
The UK is currently Vietnam’s third largest trading partner in Europe (after Germany and the Netherlands). In terms of investment, as of the end of August 2020, the UK has 400 valid projects investing in Vietnam, with a total registered capital of USD 3.6 billion, ranking 16th among the countries and territories they have. investment projects in Vietnam. The fields in which the UK has strengths and Vietnam needs to cooperate in the near future are renewable energy, sustainable production and consumption, reduction of greenhouse gas emissions …
Phuong Anh
