Representatives from Vietnam and the UK on December 29 signed a free trade agreement (FTA) between the two countries in London.
The two countries’ ambassadors were authorised to sign the deal as leading officials of the Vietnamese government and Minister of Industry and Trade Tran Tuan Anh were unable to travel to the UK to sign directly amid the Covid-19 pandemic.
On December 11, minister Anh and UK Secretary of State for International Trade Elizabeth Truss signed the minutes on the conclusion of negotiations over the UK-Vietnam FTA (UKVFTA) to create a foundation for the two nations to conduct necessary legal documents for the official signing.
The UKVFTA was negotiated based on principles of commitments of the EU-Vietnam FTA (EVFTA) with necessary adjustments to ensure the deal conforms with the Vietnam-UK bilateral trade framework.
Accordingly, the deal includes nine articles, one Appendix revising some articles of the EVFTA, one Protocol and one bilateral exchange letter between Vietnam and the UK.
Currently, the two sides are rushing to complete domestic procedures in accordance with the laws of each party so as to ensure the agreement can be implemented from 11pm on December 31.
In the context that the UK official left the EU and the Brexit transition period is about to end on December 31, the signing of the free trade agreement will ensure bilateral trade cannot be disrupted.
As it inherits the EVFTA, the UKVFTA will create a comprehensive, long-term and stable economic-trade cooperation framework between the two countries, thus contributing to deepening their multifaceted cooperation, especially when the two sides just extended the maintenance of bilateral relations at the strategic partnership level.
Vietnam and the UK set up diplomatic relations in 1973. Over the past 47 years, bilateral ties have developed continuously. According to the Vietnam General Department of Customs, two-way trade reached $6.6 billion last year.
The UK has been the third largest trade partner of Vietnam in Europe after Germany and the Netherlands in recent years.
Vietnam mainly exports garment and textiles, footwear, wood and wooden furniture and seafood to the UK, while importing pharmaceuticals, machineries and equipment from the UK.
Due to the impacts of the Covid-19 pandemic, as of the end of October, two-way trade reached only $4.7 billion, down about 15 per cent, with Vietnam’s exports to the UK hitting $4.1 billion, a decline of 14.19 per cent year-on-year.
In the first eight months of this year, the UK had 400 valid projects in Vietnam with total registered capital of $3.6 billion, ranking 16th among countries and territories investing in Vietnam.
However, the investment scale has yet to match the potential of the UK – one of the largest countries in terms of investing abroad with about $300 billion each year.
The UKVFTA is expected to bring about more investment and cooperation opportunities for the two sides, supporting them in post-pandemic recovery.
Areas which the UK is strong in and Vietnam needs include renewable energy, consumer goods production and greenhouse gas emission mitigation.
VIET NAM NEWS/ASIA NEWS NETWORK