Vietnam and the United Kingdom have made remarkable achievements in bilateral cooperation for over 50 years. The governments of both committed to extending and levelling up the strategic partnership, and now business communities and individuals are more confident in working together for mutual benefit, for now and for generations to come.
The economic cooperation between Vietnam and the UK has increased and made great contributions to the socioeconomic development of both countries. Since Vietnam and the UK announced a strategic partnership in 2010, the bilateral trade exchange has increased more than three times to $6.84 billion in 2022.
|Nguyen Canh Cuong, former trade counsellor, Vietnam’s Embassy to the United Kingdom
According to figures from the General Department of Vietnam Customs, in the first 10 months of 2023, the figure hit $5.83 billion, with Vietnam’s goods exports of $5.27 billion and imports of $562 million, up 2.5 and 2.8 per cent, respectively. Vietnam earned a trade surplus of $4.7 billion.
The key exports items from Vietnam to the UK with a high growth rate included assorted mobile phones and spare parts (18.75 per cent); machinery, equipment, and spare parts (14 per cent), garments and textiles (13.25 per cent); assorted footwear (12.6 per cent); computers, electronics, and spare parts (6.8 per cent); aquatic products (5.2 per cent); and wood and wooden products (3.9 per cent).
Issues are expected to linger due to the global economy’s low growth, energy crisis, conflicts, and supply chain disruption. However, the bilateral cooperation in investment and trade between Vietnam and the UK is expected to expand thanks to the well-established investment protection treaty 2003 and the UK-Vietnam Free Trade Agreement (UKVFTA).
The increasing popular usage of English in Vietnam and Vietnamese graduates from the UK universities are also supporting economic cooperation between the two countries. In addition to that, the economic situation and market demands are recovering in the UK while consumption trends are more city lifestyle with higher expectation in Vietnam will be positive factors in 2024.
The British economy should overcome the difficult time and recover steadily in 2024 to help restore market demands and consumer confidence. Those increasing demands are opportunities for Vietnamese businesses who are capable of meeting UK standards and British consumer’s evolving expectations.
Since 2021, Vietnamese businesses have benefited the preferential market access to export their products to the UK and vice versa thanks to the UKVFTA. Certain additional tariff quotas for selected agri-commodities from Vietnam such as perfume rice, honey, and tuna will be provided when the UK officially joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The UKVFTA is on route to become a highway for businesses to reach the other side’s markets faster and stronger thanks to its extensive tariff reduction roadmap. This agreement creates advantages for many products of both sides to access the other side’s markets. The UK’s service sectors including finance, transport, and retail are also entitled to benefit in Vietnam. What is more, the deal also sets up an important framework for green development cooperation through the commitments to sustainable development.
The UKVFTA has established a tax-free roadmap for almost all Vietnamese products exported into the UK and vice versa. As a result, many Vietnamese products have a superior competitive advantage in the UK market compared to similar products originating from countries that do not have FTAs with the UK.
During the least 10 years, British distributors have paid more attention to products made in Vietnam and to Vietnamese suppliers. This is because of good product quality, committed business performance and significant improved infrastructure in Vietnam. Meanwhile, more Vietnamese businesses chose the UK as one of their important markets.
Seafood, pepper, cashew, coffee, rice, textiles and garments, and footwear products from Vietnam are available almost in every distribution channel in the UK.
In 2024, after the UK joins the CPTPP, some Vietnamese products with big potential such as fragrant rice, tuna, and honey will be able to increase their market share in the UK thanks to more tax-free quotas.
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