Vietnamese firms urged to foster raw material imports from the UK
Vietnamese firms urged to foster raw material imports from the UK
Vietnamese firms should foster their imports of raw materials from the United Kingdom (UK) to enjoy preferential tariffs brought by the UK-Việt Nam Free Trade Agreement (UKVFTA), trade experts have suggested.
Shoes are made at a factory in Hà Nội. Footwear raw materials are among items that accounted for a large proportion of Việt Nam's import turnover from the UK in the first half of this year. — VNA/VNS Photo |
According to experts, the UK can be a source of quality raw materials for Việt Nam especially because raw materials that Việt Nam needs to import for export production or domestic consumption are items that Việt Nam offers preferential tariffs to the UK.
Under the trade deal, Việt Nam commits to eliminate 48.5 per cent of tariff lines from January 1, 2021; 91.8 per cent of tariff lines from January 1, 2027 and 98.3 per cent of tariff lines from January 1, 2029.
The remaining 1.7 per cent of tariff lines are partially liberalised through tariff rate quotas (the quota volumes are consistent with Việt Nam’s WTO commitments and duties within quotas will be removed by 2031) or not entitled to preferential treatment.
Typically, 61 per cent of tariff lines for machinery and appliances imported from the UK have been removed since January 1, 2021, while import tariffs for all other products will be eliminated after nine years.
For pharmaceutical products, Việt Nam has eliminated 71 per cent of tariff lines from January 1, 2021. All other products will have import taxes eliminated after four to six years.
Meanwhile, the Southeast Asian nation has lifted 80 per cent of tariff lines imposed on raw materials for textiles, garments and footwear from January 1, 2021, while that of all other products will be eliminated after four to six years.
Statistics from the General Department of Customs revealed that Việt Nam imported nearly US$373 million worth of goods from the UK, equivalent to the same period in 2022.
Among staples recording high growth rate included seafood raw materials (233 per cent); iron and steel products (95 per cent); fabrics (72 per cent); plastic products (15 per cent) and machinery, equipment, tools and spare parts (6.4 per cent).
According to the department, items that accounted for a large proportion of Việt Nam's import turnover from the UK in H1 included machinery, equipment, tools, and spare parts (24 per cent); pharmaceuticals (11.8 per cent); chemicals (6.4 per cent); textile, garment, leather, and shoe raw materials (5.2 per cent); seafood and seafood materials 4.6 per cent.
These above-mentioned goods are what Việt Nam needs to import for export production and domestic consumption.
A recent survey by Vietnam Report, a market research company in Việt Nam, showed that a top priority among Vietnamese businesses is to diversify their supply sources, especially for imported raw materials.
According to the report, 72.7 per cent of all participants said they want to seek out new suppliers at lower prices and they want to do so in the near future.
