Vietnam hopeful to benefit from UK’s pacific deal entry
Vietnam hopeful to benefit from UK’s pacific deal entry
Vietnam and the United Kingdom will soon have another tool for amplifying their trade and investment following Britain’s upcoming ratification of a mega multilateral trade deal.
As scheduled, on June 25, Vietnam’s National Assembly (NA) will vote to adopt a resolution on approving the UK’s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The NA has assigned the government to review all legal documents to “revise, supplement, or newly enact regulations in order to ensure the consistency of the country’s law system and ensure the right roadmap for the implementation of commitments in the UK’s document on joining the CPTPP,” stated the draft resolution on adopting the UK’s document on partaking in the CPTPP.
The government also tasks relevant ministries and sectors to complete the procedures on approving the UK’s document on access to the deal and announce the time of entry into force for Vietnam.
The government will also have to enact a decree on a new tariff or a new legal document to guide the implementation of commitments on public procurement and services and investment.
With this adoption, Vietnam will be among the first group of six nations to approve the CPTPP for the UK. Currently, Singapore, Japan, and Chile have announced their completion of procedures for passing the CPTPP for the UK.
According to the National Assembly Committee for External Affairs, it is likely that New Zealand, Brunei, Malaysia, and Peru will do the same in the coming few months.
“By October 16, 2024, if at last six CPTPP member states announce completion of adoption procedures, the deal will take effect within 60 days following the nations passing the deal, or December 16, 2024,” stated a committee report submitted to the Vietnamese legislature last week.
The UK access to the CPTPP will have specific impacts on Vietnam (see box). Under the British Embassy to Vietnam’s study on cooperation in agriculture between Vietnam and the UK released last month, for Vietnam, the benefits have already been clear. Exports of agro-forestry-fishery exports to CPTPP member countries rose 32 per cent from $2.2 billion in 2019 to $2.9 billion in 2022.
The UK is off to a strong start too. In 2022, the UK exported $63.5 billion of goods and services to the CPTPP countries (7.5 per cent of the UK total) and imported $54 billion (5.8 per cent).
Under the CPTPP, tariff rates for UK imports have already fallen. Tariff rates on pork have dropped from 22-25 to 8.1 per cent, while tariffs on seafood have largely disappeared. Long-term advantages will continue to develop. Vietnam is expected to benefit from increased exports of agricultural and seafood products, while the UK should see a boost to meat exports, according to the study.
UK trade commissioner for Asia-Pacific Martin Kent told VIR, “As a member of the CPTPP, we see Vietnam as an important partner with a rapidly growing economy in the heart of the Asia-Pacific region (with growth of over 5 per cent last year and is predicted to grow roughly 6 per cent this year). We are committed to continuing to grow our trade relationship joining this high standards and forward-thinking trade bloc enables us to work with Vietnam and other CPTPP members to shape the trading systems of the future, for example in areas like digital trade.”
Emily Hamblin, British Consul General in Ho Chi Minh City, also told VIR that boasting a combined population of half a billion people and a joint GDP expected to reach $15.2 billion or 15 per cent of global GDP once the UK joins, CPTPP membership includes some of the world’s most dynamic economies and stands as a hallmark of progressive trade.
“We were grateful for the support Vietnam, a founding member of CPTPP, provided to the UK throughout our negotiations,” Hamblin said.
Joining the CPTPP complements the existing UK-Vietnam Free Trade Agreement, she added, offering additional preferential tariffs and setting high standards for trade. The provisions for digital trade, e-commerce, and trade in services align with the needs of modern economies, providing substantial opportunities for UK businesses and facilitating broader consumer choices.
Under calculations by the British government on the impacts of the CPTPP on the UK economy, almost all British goods exports to CPTPP member countries will be eligible for zero tariffs, improving goods market access for British companies. Businesses selling key UK exports szuch as cars and machinery will benefit from the removal of tariffs. In the long run, joining the CPTPP could lead to a $2.16 billion boost to British exports to other CPTPP countries.
