The deal is significant for both countries in the current context as it meets the demands of the two sides.
According to the MoIT, the FTA between the EU and Vietnam (EVFTA), which has been effective from August 1, will not be applied on the U.K. after December 31, 2020.
Both Vietnam and the U.K. hope to finalize the agreement as soon as possible to promote economic recovery after the COVID-19 pandemic. Meanwhile, the majority of the content in the UKVFTA are similar to those of the EVFTA, saving negotiation time for the deal.
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Participants at a conference on Vietnam-U.K. trade and investment partnership outlook that takes place in Hanoi on December 6 |
The UKVFTA is expected to help boost tourism cooperation between the two countries, while encouraging partnership in other fields such as development cooperation, defense, security, culture, and education and training.
It also spreads a positive message of the bilateral relations, especially after their recent Joint Statement on bilateral cooperation vision on the occasion of the 10th anniversary of strategic partnership.
Vietnam and the U.K. set up diplomatic relations in 1973. Over the past 47 years, bilateral ties have unceasingly developed. According to the General Department of Vietnam Customs, two-way trade reached USD 6.6 billion in 2019.
The U.K. 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 U.K., while importing pharmaceuticals, machineries and equipment from the U.K.
Due to impacts of the COVID-19 pandemic, as of the end of October, two-way trade reached only USD 4.7 billion, down about 15 percent, with Vietnam’s exports to the U.K. hitting USD 4.1 billion, a decline of 14.19 percent year on year.
In the first eight months of 2020, the U.K. run 400 valid projects in Vietnam with total registered capital of USD 3.6 billion, ranking 16th among countries and territories investing in Vietnam.
However, the investment scale has yet to match the potential of the U.K. – one of the largest countries in terms of investing abroad with about USD 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 U.K. is strong in and Vietnam needs include renewable energy, consumer goods production, and greenhouse gas emission mitigation.
Source: VNA