More efforts needed for Vietnam firms to take advantage of UKVFTA
The challenges for local firms would be to utilize preferential treatment and complying with commitments set out in the UK-Vietnam Free Trade Agreement (UKVFTA).
While the UKVFTA is seen as a promising instrument to boost Vietnam’s exports to the UK market, local enterprises should be more active in gaining a greater understanding of the deal to further penetrate this market.
|Processing shrimps for exports. File photo|
Statistics from the Ministry of Industry and Trade (MoIT) revealed Vietnam’s exports to the UK rose sharply by 28% year-on-year in the five-month period to US$2.36 billion, in which phones and parts made up 23.3% of the total, or US$550 million; followed by equipment and machinery (US$306 million), an increase of 55.1%; and footwear with US$263 million, up 24.1%.
Such figures remained positive amid the Covid-19 pandemic continues to cause disruption to global trade, while showcasing the significance of the UKVFTA, which officially took effect on May 1, 2021.
Head of the MoIT’s European-American Market Department Ta Hoang Linh said the potential remains huge for Vietnam’s major staples, including garment, footwear, or seafood, to increase their shares in the UK market.
According to Linh, under the UKVFTA’s commitments, import tariffs for fresh or frozen shrimp products into the UK are now removed to 0% from the previous 10-20% tax base, while tax rate applied to 94% of 547 groups of vegetables are set to be 0%.
“These are both export products that could benefit significantly from the UKVFTA, while Vietnam’s fruits such as lychees, dragon fruit, pineapple, or watermelon would gain advantages in the UK market as Vietnam’s competitors for tropical fruits such as Brazil, Thailand, and Malaysia have not had any trade deal with the UK,” Linh continued.
A better understanding of UKVFTA a must
Experts, however, said the challenge for local firms would be to utilize preferential treatment and complying with commitments set out in the UKVFTA.
Among them, local firms would be under pressure from Vietnam’s commitment to opening the market for goods and services from the UK, including financial services, pharmacy, chemical products, those that the latter has strong expertise.
The UK also imposes strict technical barriers for imported products, especially the sanitary and phytosanitary (SPS) requirements with high standards on quality consistency and food hygiene.
To ensure greater utilization of the UKVFTA, the Director of the WTO Center under the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Thu Trang said Vietnamese firms should prioritize improving product quality and value for higher competitiveness.
“In line with optimizing the production process, local firms have to pay more attention to social responsibility and working environment standard as these are requirements set in the deal,” Trang said.
Trade Counsellor at Vietnam’s Embassy to the UK Nguyen Canh Cuong said major supermarkets and retailers in the UK are placing orders from credible suppliers to diversify sources and better control product quality and origin.
“Vietnamese firms could consider registering as suppliers for major UK supermarkets by following instructions on their websites,” Cuong noted.
|"Vietnam and the UK have agreed on the soon organization of the Vietnam-UK Joint Economic and Trade Committee (JETCO 12), scheduled to take place under virtual format by late September, to boost trade and investment after a period of disruption as a result of the Covid-19 pandemic,” said Minister of Industry and Trade Nguyen Hong Dien.|
- Vietnam spends US$9 billion on oil imports in 2022
- Vietnam set for robust economic growth in 2023: Experts
- Vietnam calls for int’l support in green development
- Switzerland to support Vietnam’s transition to green economy
- Vietnamese Govt to restructure real estate, bond markets in 2023
- Vietnam strives to become developed country by 2050
- Vietnam targets GDP per capita at US$32,000 by 2050
- Fresh Vietnamese longan to land in Japan this week
- Vietnam to benefit from China’s reopening
- Vietnam’s GDP growth hits 12-year high of 8.02% in 2022
Vietnam spends US$9 billion on oil imports in 2022
Hanoi makes people and businesses the center of digitalization
Tet in the eyes of foreigners in Hanoi
Hanoians show passion for flowers
Vietnam’s tourism forecast to strongly rebound in five years
Admiring 2,023 feline statuettes made by Hanoi artist
Overseas Vietnamese eagerly await Tet and spring
Switzerland to support Vietnam’s transition to green economy
Foreign ambassadors experience Vietnamese Tet in Duong Lam Village