UK committed to utilising fresh free trade benefits
UK committed to utilising fresh free trade benefits
Vietnam and the United Kingdom are set to celebrate 15 years of strategic partnership. British Ambassador to Vietnam Iain Frew spoke with VIR’s Thanh Tung about the cooperation outlook, with stress laid on trade and investment.
What were the highlights of the Vietnam-UK relationship last year, and what can we look forward to in 2025?
British Ambassador to Vietnam Iain Frew |
The trade relationship is now worth over £6 billion ($7.33 billion) a year, which is double what it was a decade ago. That’s been supported by the development of our bilateral free trade agreement which came into force in 2021 and, at the end of last year, the UK joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with Vietnam’s strong support throughout the negotiation process, for which we are grateful.
That represents another opening up of trade between our countries – and for those that trade between our countries and consumers in our countries, a broader set of relationships and access to wider markets. CPTPP accession for the UK is going to provide a boost to both of our countries, as businesses see tariffs reduced in a number of areas faster and further. We see greater opportunities for digital trade and for supply chains and value chains which operate between our countries and other members.
Our plan in 2025 is to make sure businesses and investors are apparent on what the provisions and advantages of the CPTPP are. We want them to understand what has changed, what’s new, and ensure they can access the right information and that they can see the opportunities that follow from that.
How can businesses of the world countries utilise the benefits of the CPTPP in terms of improving their capacities to further integrate into the global supply chain?
What businesses need to make sure they do is understand as much as possible the provisions of the trade agreements, and that’s something that the UK government and the Vietnamese government are here to support with. Throughout this period, we will be providing a number of information sessions, workshops, and sharing with businesses to help them understand those provisions.
Where there’s a reduced tariff, businesses need to see if there are opportunities to export and to trade as a result of that. I would encourage all businesses to keep a close eye on the information that’s shared to try and find out more about those changes.
What the CPTPP does is provide a basis which is long-term, predictable, and transparent for those businesses to consider how they want to trade and invest. The rules of the road that we have agreed to, not just between our two countries but also with other partners in the CPTPP, set out a very modern and progressive free trade agreement.
That means businesses know that they can rely on investing and that their investments will be secure and safe. It means that they know that the agreement will continue to keep up with technology and regulatory developments, and that we are looking at how the agreement can expand further.
What are the recommendations that you would make for Vietnam to further promote investment and trading relations with the UK, especially in terms of improvements for businesses of both countries to foster cooperation and utilise the CPTPP?
We will work together with the Vietnamese government through our annual trade dialogues and our committees regulating our free trade agreement to ensure that there is a level and open playing field.
But I’m very heartened by the positive message that Vietnam continues to send on open trade at a time when some countries are doubting commitments internationally, and doubting free trade and the benefits it brings our consumers and our countries. Our two countries are very committed to those benefits, so that’s something that we should both continue to stay committed to.
At the same time, we need to see both countries continue to benefit from increasing trade and prosperity through modernisation and development of our regulatory frameworks, whether that is around the energy sector, the consumer sector, or more modern technologies.
We allow businesses and entrepreneurs to take the greatest advantage of the opportunities that are there. And we need to make sure that those technologies develop, and AI is a brilliant example of something we need to pay very close attention to.
In terms of investment and trade, what are priority sectors that the UK will pay attention to further boost relations with Vietnam?
The sectors I’ve mentioned already are critical, but I’ll touch on two others which I believe are essential.
The first of those is the energy sector. A vital part of our partnership in the bilateral relationship is how we are supporting Vietnam’s path to net-zero, its development of a sustainable economy, and as part of that, the energy transition. Vietnam’s agreement and commitment to reach net-zero by 2050 is one that the UK supports strongly, and we’ve been supporting that through the Just Energy Transition Partnership.
The second area is agriculture. Vietnam’s developing agriculture exports have seen UK consumers benefit from exports of seafood, which you can find in British supermarkets, from pomelos and dragon fruits to rice and coffee, all of which are increasing volumes to the UK. The UK is also one of the top 10 markets for Vietnam’s cashew exports, so British consumers benefit hugely from this.
And we are seeing, alongside that, an increasing export of UK agricultural products to Vietnam, whether that be pork and poultry products, seafood, or a number of other products like whisky, cheese, chocolate, and other confectionery.
How can the UK support Vietnam in energy development?
We’re going to be working together very closely on supporting Vietnam’s development of new energy regulatory frameworks, and this is crucial. If investment is going to flow, in fact, tens of billions of US dollars of investment that is needed over the years to come will only flow if the right framework is in place. We’re committed to support Vietnam in doing that, but there is also a task ahead here for us together in the coming year to develop that.
That is going to open up opportunities for businesses to invest in the energy sector, to build brilliant new wind farms and solar farms, and this is a journey that the UK has been on over the past 10-15 years, where we have transitioned from having coal as about 40 per cent of our energy supply to now zero of our energy supply.
At the same time, wind energy has gone up to roughly 35 per cent, depending on the date of our energy supply, and going up further with hugely ambitious plans to build more.
One similarity between our two countries is a long coastline, where we have a lot of opportunities to build offshore wind in environments where the wind will, at one time or another, be blowing consistently and providing energy to our businesses and our communities. So, we’re going to work together in the energy sector, and I want to see us do that not just this year, but for the long term.
