New direction for Brits enables Vietnamese ties

The United Kingdom officially left the EU on January 31 and moved into a transition period until the end of 2020. What changes can you see in the trade relationship between Vietnam and the UK in the near future?

British Ambassador to Vietnam Gareth Ward

The script for trade between the UK and Vietnam is written by consumers in both our countries, not by the EU or our two governments. Britain exports lots of high-tech machinery to Vietnam – the wings and engines of many planes flown in Vietnam are built in Britain, and I see an increasing number of British made cars on the streets of Vietnam.

We also export pharmaceuticals to help Vietnamese people stay healthier as the population ages and there is an increase in diseases such as cancer and diabetes.

In the UK, my fellow Brits know that many of the clothes and shoes they wear are manufactured in Vietnam. What they don’t realise is that many of their mobile phones were also manufactured here.

With the growing popularity of Vietnamese cuisine, most Brits now know what a bowl of pho is, but they probably don’t know that the prawns they eat and the pepper they sprinkle on their food may come from Vietnam too.

Trade between our two countries is driven by the emergence of the middle class in Vietnam – people who want access to British services in education, law, and banking. So the fact that the UK has left the EU will not lead to any major change in the two countries’ trading relationship.

If the newly-ratified EU-Vietnam Free Trade Agreement (EVFTA) is soon adopted by the European Council and Vietnam’s National Assembly, trade activities between the UK and Vietnam will be able to benefit this year as the UK remains a member of the EVFTA. How will this period of time impact UK-Vietnam trade ties?

The UK has always been an advocate for free trade. When the country was a member of the EU, the UK supported free trade agreements as a way to drive economic growth in our own country, but also in developing countries around the world.

We are a strong supporter of the EVFTA, which is an ambitious reduction in tariffs and barriers to trade. This agreement is likely to come into force in this summer, and when it does it will apply to the UK during the transition period until the end of 2020. That gives us time to arrange for continuity for business and for us to complete a bilateral UK-Vietnam FTA.

Outside the EU, the UK will also continue to be a champion of free trade. We know that Vietnam, with 13 FTAs already in place including membership of the ambitious Comprehensive and Progressive Agreement for Trans-Pacific Partnership, shares many of our views on the value of free trade and the benefits that true internationalisation bring.

If the terms of the EVFTA do not apply to trade relations between the UK and Vietnam after this year, how will the two countries’ bilateral trade be impacted, and how will the trade mechanism between our two nations be modified?

After the transition period the UK will control its own trade. During 2020, we aim to agree a deeper trading relationship with the EU along the lines of the agreement the EU has with Canada. Irrespective of this, the UK and Vietnam are working to agree a bilateral FTA that will have the same benefits as the EVFTA.

So the mechanism for trade between the UK and Vietnam will continue to develop, with a focus on removing market access barriers. For instance, some of the best pork in the world is not available in Vietnamese shops at a time when pork prices are increasing due to lack of supply. We want to change that.

You said that a bilateral FTA is quite possible and necessary for Vietnam and the UK. What is your vision on the relations of the two countries with the support of this agreement?

Discussions on a UK-Vietnam FTA are now underway. We have a good basis for our discussions given that the UK was part of the negotiations of the EVFTA in recent years.

The UK-Vietnam bilateral deal will be just as ambitious in areas such as tariffs, services, and public procurement. There will be no competitive disadvantage to either Vietnamese or British consumers or producers – only gains. It really is a win-win situation for all.