UK-Vietnam FTA to become effective from 23:00 on December 31
UK-Vietnam FTA to become effective from 23:00 on December 31
Representatives from Vietnam and the United Kingdom signed a free trade agreement between the two countries in London on December 29 evening (Vietnam time).
Minister of Industry and Trade Tran Tuan Anh and UK Secretary of State for International Trade Elizabeth Truss sign the minutes on the conclusion of negotiations over the UKVFTA (Source: VNA)
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Representatives from Vietnam and the United Kingdom signed a free trade agreement between the two countries in London on December 29 evening (Vietnam time).
The two countries’ ambassadors were authorised to sign the deal as leading officials of the Vietnamese Government and Minister of Industry and Trade Tran Tuan Anh were unable to travel to the UK to sign directly amid the COVID-19 pandemic.
Earlier on December 11, Minister Anh and UK Secretary of State for International Trade Elizabeth Truss signed the minutes on the conclusion of negotiations over the UKVFTA to create a foundation for the two nations to conduct necessary legal documents for the official signing.
The UKVFTA was negotiated based on principles of commitments of the EU-Vietnam FTA with necessary adjustments to ensure the deal conforms with the Vietnam-UK bilateral trade framework.
Accordingly, the deal includes nine articles, one Appendix revising some articles of the EVFTA, one Protocol and one bilateral exchange letter between Vietnam and the UK.
Currently, the two sides are rushing to complete domestic procedures in accordance with the laws of each party so as to ensure the agreement can be implemented from 23:00 on December 31.
In the context that the UK official left the EU and the Brexit transition period is about to end on December 31, the signing of the free trade agreement will ensure the bilateral trade cannot be disrupted.
As it inherits the EVFTA, the UK-Vietnam Free Trade Agreement will create a comprehensive, long-term and stable economic-trade cooperation framework between the two countries, thus contributing to deepening their multifaceted cooperation, especially when the two sides just extended the maintenance of bilateral relations at the strategic partnership level.
Vietnam and the UK set up diplomatic relations in 1973. Over the past 47 years, bilateral ties have unceasingly developed. According to the General Department of Vietnam Customs, two-way trade reached 6.6 billion USD in 2019.
The UK has been the third largest trade partner of Vietnam in Europe (Source: VNA)
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The UK has been the third largest trade partner of Vietnam in Europe after Germany and the Netherlands in recent years.
Vietnam mainly exports garment and textiles, footwear, wood and wooden furniture and seafood to the UK, while importing pharmaceuticals, machineries and equipment from the UK.
Due to impacts of the COVID-19 pandemic, as of the end of October, two-way trade reached only 4.7 billion USD, down about 15 percent, with Vietnam’s exports to the UK hitting 4.1 billion USD, a decline of 14.19 percent year on year.
In the first eight months of 2020, the UK run 400 valid projects in Vietnam with total registered capital of 3.6 billion USD, ranking 16th among countries and territories investing in Vietnam.
However, the investment scale has yet to match the potential of the UK – one of the largest countries in terms of investing abroad with about 300 billion USD each year. The UKVFTA is expected to bring about more investment and cooperation opportunities for the two sides, supporting them in post-pandemic recovery.
Areas which the UK is strong in and Vietnam needs include renewable energy, consumer goods production, and greenhouse gas emission mitigation.
