Vietnam-UK agreement creates leverage for bilateral trade
Vietnam-UK agreement creates leverage for bilateral trade
The UK-Vietnam Free Trade Agreement (UKVFTA), effective since May 1, 2021, has created leverage for bilateral trade recovery following considerable declines in 2019 and 2020.
Bilateral trade recovery
According to the Ministry of Industry and Trade, after two years of COVID-19, trade between Vietnam and the UK recovered in 2021, reaching nearly US$6.6 billion. This included more than US$5.7 billion worth of Vietnam’s exports to the UK, an increase of 16.4 percent compared with 2020.
Vietnamese goods at a UK supermarket |
Products with high export growth included fruit and vegetables (up 67 percent); coffee (up 17 percent); pepper (up 49 percent); carpets and products made of bamboo, rattan and sedge (up 56 percent); iron and steel materials (up 1,269 percent); steel products (up 100 percent) and toys and sports equipment (up 19 percent).
The value of Vietnam’s imports from the UK reached nearly US$850 million, an increase of 23.6 percent compared with 2020.
In the first four months of 2022, Vietnam’s exports to the UK reached an estimated US$4.8 billion with key products including seafood, coffee, pepper, cashew nuts, plastic products, garments, footwear, iron and steel, phones, computers, machinery, equipment and spare parts, toys and sports equipment.
Nguyen Canh Cuong, Trade Counselor at the Vietnamese Embassy in the UK and North Ireland, said these results reflected the efforts of domestic companies in seeking new export opportunities, as many Vietnamese products have more competitive advantages than similar products made in China, India, Thailand, Malaysia, the Philippines, Indonesia and Brazil – countries that do not yet have free trade agreements with the UK.
Carving out niches in UK market
The UK government is promoting participation in a number of FTAs, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), increasing competition in the UK market. Therefore, Nguyen Canh Cuong said, Vietnamese companies should promote exports to increase their share of the UK market and build sustainable partner relations with UK businesses.
Vietnamese Trade Counselor Nguyen Canh Cuong (second from left) and Nam Jonny from the EUTEK Group – a farm produce and food importer and distributor (fourth from left) – visit the group’s Vietnamese supermarket in Nottingham |
To take advantage of the UKVFTA, in Cuong’s opinion, domestic companies should ensure that their products and manufacturing process meet UK standards; recruit graduates from UK universities to manage sales to the UK; participate in international fairs to introduce products and meet potential customers; and patiently strive to win the trust of discerning customers.
The Vietnam Trade Office in the UK said that Vietnamese companies already having partners in the UK will not encounter major barriers, but small-sized companies without UK partners will face difficulties in accessing this market. The Vietnam Business Association in the UK (VBUK) and local market experts are helping Vietnamese companies overcome export barriers.
Cuong said that from June 24-30, the Vietnamese Embassy in the UK will coordinate with Longdan Ltd, EUTEK Group and VBUK to organize the 2022 Vietnamese Goods Week event in the UK, in an effort to promote high-quality Vietnamese farm products and food enjoying tariff preferences under the UKVFTA.
Vietnamese products to be displayed at Home of Asia supermarket of Longdan Ltd and EUTEK Group’s Vietnamese supermarket in Nottingham include tea, coffee, fresh fruit, semi-dried fruit, canned fruit juice, dry noodles, rice paper, groundnuts and fragrant rice, among other farm products. The event is expected to create opportunities for Vietnamese companies to promote exports to the UK.
