How will Vietnamese exports be affected once the UK joins the CPTPP?
How will Vietnamese exports be affected once the UK joins the CPTPP?
Vietnamese exports to the British market will have to face off with robust rivals from other CPTPP nations.
According to the Ministry of Industry and Trade (MoIT), the United Kingdom joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on July 16, marking the country's largest trade agreement since Brexit.
President of the Vietnam Timber and Forest Product Association Do Xuan Lap told VIR on July 17, "The fact that the UK is now the CPTPP's 12th member could have an adverse effect, so Vietnam has to sustain its exports to this country to avoid missing out."
"Various Vietnamese products entering the UK market will have to compete with formidable rivals from other CPTPP countries," said Lap.
Vietnam's export commodities, such as electrical components, cabinetry, textiles, footwear, furnishings, fish, and vegetables, are popular in the UK market.
"Vietnam's timber products account for 7.2 per cent of the UK's total wood imports," commented Lap.
This is positive, as the British market is made up of customers who demand high technical standards and exercise restraint in their spending.
However, domestic experts have reservations about whether Britain's accession to the CPTPP signifies that it is willing to open its market to numerous products from the 11 participating member nations in exchange for preferential market access for British exports.
Numerous analysts are also contemplating the possibility that the UK government will enact new trade regulations with higher technical standards in order to achieve the objective of a green economy. If this occurs, Vietnamese exporters will be faced with additional difficulties.
Nonetheless, trade opportunities will expand in the future. The effective implementation of the Vietnam-United Kingdom Free Trade Agreement grew bilateral trade to $6.84 billion in 2022, a rise of 3.4 per cent from 2021, according to MoIT data.
Nonetheless, MoIT statistics indicate that Vietnam's exports to the UK account for less than 1 per cent of this market's import demand, and Vietnam's imports from the UK account for less than 0.2 per cent of the value of British exports.
The UK is presently ranked 16th among the nearly 140 countries and territories with investment initiatives in Vietnam, despite being one of the five countries with the largest foreign investment.
At the end of October last year, Nguyen Canh Cuong, commercial counsellor at the Vietnamese Embassy in the UK said, "Technical barriers are nothing new. Now, exports to the UK must meet the market expectations for each industry."
The export procedures for the UK differ from those of the EU. Since January 1, the UK Conformity Assessed mark has been required for the majority of industrial products in circulation and use in the UK.
In addition, the Trade with Developing Countries Programme, which went into effect in early 2023 and covers 65 countries, provides exporters with reduced tariffs and simplified rules of origin. Cuong is concerned that this may reduce Vietnam's competitive edge."
