UK-Vietnam trade pact already demonstrating value

In 2023, we worked together to leverage this opportunity and to forge new collaborations between British and Vietnamese businesses across a diverse range of sectors. The celebration became a catalyst for dialogue and cooperation in areas ranging from education and health to agriculture, technology, finance, energy, and infrastructure. The groundwork laid in 2023 set the stage for an even more robust economic partnership in 2024.

Emily Hamblin, British consul general in Ho Chi Minh City

The UKVFTA, a pivotal component of our partnership, has already demonstrated its efficacy. The removal of tariffs on a range of goods has led to a surge in bilateral trade volumes.

According to the Vietnamese Ministry of Industry and Trade, in the first 10 months of 2023, total trade in goods between the UK and Vietnam reached $5.92 billion, including Vietnam’s exports of $5.27 billion - up 2.5 per cent on-year, and imports of $652 million - up 2.8 per cent on-year.

Top exports from the UK to Vietnam include medicinal and pharmaceutical products, beverages, and cars. Going in the other direction, we see the UK importing goods such as telecoms and sound equipment, footwear, clothing, agricultural goods, and furniture from Vietnam.

The current upward trajectory in the two economies’ trade relationship is expected to persist into 2024: Alongside removal of 99 per cent of tariffs by full implementation, the UKVFTA includes a host of other measures which are collectively helping to lay the foundation for an increasingly resilient and dynamic economic partnership.

The UK successful accession to the CPTPP in 2023 also marked a seminal moment in our trade relations with Vietnam. This multilateral agreement encompasses 11 dynamic markets and offers the UK and Vietnam an expanded platform for trade liberalisation, market access, and regulatory harmonisation.

By joining this dynamic and diverse trade bloc, the UK has gained access to a market of over 500 million people. This strengthens our trade links with Vietnam and broadens the horizons for British businesses, enabling them to tap into new markets and forge supply chains across the Asia-Pacific region. The UK and CPTPP parties are now taking the steps needed to bring the agreement into force, which is expected in the second half of 2024.

Meanwhile, the UK and Vietnam are increasingly working together to explore joint initiatives that promote innovation and digitalisation.

For example, at Vietnam’s International Digital Week at the end of 2023, the UK’s head of the Southeast Asia Digital Trade Network shared the UK’s perspectives and experience in developing and governing AI and its applications. And we are now looking forward to hosting the UK-Southeast Asia Tech Week in Ho Chi Minh City in March.

The UK is firmly committed to working with Vietnam to shape a future where technology is a force for positive change, driving innovation, inclusivity, and sustainable global growth, and to building commercial partnerships across the tech sector.

Moreover, in 2023 The City UK, an industry-led body for financial and professional services, was appointed by the UK government to support Vietnam’s ambitions of developing a financial centre.

This commitment underscores the UK’s dedication to aiding Vietnam in achieving its ambitious goals, through further improving the business environment, and fostering a deeper financial and business connection between our two nations.

Foreign investors, including those from the UK, are increasingly attuned to sustainability issues and the UKVFTA requires attention to environmental and climate issues. To support Vietnam’s transition to a greener future, the Just Energy Transition Partnership, co-chaired by the UK and initiated in 2023, aims to mobilise more than $15 billion to expedite Vietnam’s shift to renewable energy, helping to position Vietnam as a regional leader in sustainability.

Investing in clean infrastructure and high-tech climate solutions attracts more UK investors and supports Vietnamese products in meeting stringent environmental and quality standards in markets like the UK.

Going forward, sustainability will need to be increasingly integrated into decision-making at all levels of government, and the commitment to sustainability is a key pillar in the UK-Vietnam relationship and is expected to unlock further avenues for trade and investment.

In 2024, the outlook for UK-Vietnam trade cooperation is brimming with promise. The commitments made through the aforementioned trade deals, coupled with the ongoing dialogue facilitated by our annual Joint Economic and Trade Committee, lay the foundation for a robust partnership. Challenges must be met with strategic foresight, while opportunities should be seized with innovation and collaboration.

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