Ample room remains for cooperation
The U.K. joined the CPTPP with strong support from Vietnam. Through the CPTPP, the U.K. aims to expand its export markets to the member countries of the agreement, which are Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile, and Malaysia. With the CPTPP, many products exported from Vietnam to the U.K. will benefit from tariff reduction or exemption. The U.K. is committed to eliminating 94.4% of tariff lines for Vietnam once the agreement takes effect (while other CPTPP member countries are committed to 93.9%). This will also provide domestic businesses with opportunities to learn from sectors such as technology and clean energy, which will greatly contribute to boosting bilateral trade relations between the two countries.
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Rice is one of Vietnam’s strong export products with many opportunities to enter the U.K. market. In the photo: People in Thai Binh harvest rice. |
In 2024, the Vietnam - U.K. trade exchange value reached 8.4 billion USD, an 18% increase compared to 2023. The U.K. is currently Vietnam’s third-largest export market in Europe. However, there remains ample room for cooperation between the two countries. At present, the proportion of import and export turnover with the U.K. accounts for only about 6.8% of Vietnam's total import and export turnover with the world, while Vietnam represents only 0.4% of the total import turnover of the U.K. with its partners. This reveals that there are many opportunities for businesses from both countries to invest in each other's areas of strength.
Discussing the economic benefits for Vietnam from the U.K.’s joining the CPTPP, many opinions from the business community highlighted that the biggest benefit the CPTPP brings is the rules of origin. Businesses from both sides have more opportunities to expand material supply sources to enhance production, exports, and market expansion within the CPTPP. Deputy Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP) Nguyen Hoai Nam affirmed that the U.K. joining the CPTPP brings many benefits to seafood businesses in terms of tariffs and intra-bloc origin rules, especially for tuna products.
The U.K. is an important market for Vietnam's seafood industry, both for exports and imports.
According to CEO of Vinasamex Nguyen Thi Huyen, the U.K. is a potential market, however, it is not easy to penetrate. She underscored that when goods enter the U.K. market, they will bring higher added value compared to many other markets. As free trade agreements between Vietnam and the U.K. are strengthened, businesses will benefit greatly.
High demands on corporate responsibility
The U.K. is known for a choosy market, with world-leading standards in food safety, plant quarantine. Recently, the U.K. has been one of the pioneers in combating climate change, sustainable development, and circular economy. These demands have been integrated into the U.K.’s trade policies and directly affect market entry potential. Former Trade Counsellor of the Vietnamese Embassy to the U.K. Nguyen Canh Cuong shared that U.K. consumers highly value social responsibility, environmental protection, and transparent supply chains. "The trend of sustainable consumption is growing stronger and has been seen as one of the most important values and requirements by the Government, businesses, consumers, and the community in the U.K. Therefore, Vietnamese goods must build a green brand, invest in green technology, and understand the preferences of consumers," Mr. Cuong suggested.
According to Nguyen Thi Huyen, Vietnam has proactively prepared and taken clear steps to support Vietnamese businesses to meet the requirements of green economy and trade of the export market in general, and the U.K. market in particular. However, if businesses would like to export products to this market, they must first control quality and meet the quality standards required by importers. "Businesses should focus on the quality of their goods and increase the product’s value rather than quantity. This not only creates a competitive advantage for Vietnamese exports in the U.K. market but also builds a guarantee of quality, which can then be expanded to other large and key markets," Huyen shared.
As one of the most comprehensive and dynamic free trade agreements in the world, the CPTPP brings immense opportunities for economic growth and international cooperation. With the U.K.’s accession, the CPTPP will account for 15% of the world's total GDP and a population of over 500 million people. Along with the CPTPP, Vietnam and the U.K. also signed the Vietnam-U.K. Free Trade Agreement (UKVFTA), which took effect in 2021. Therefore, the opportunities to enter the U.K. market are vast; however, it is important to understand and take advantage of the tariff preferences from these agreements.
Translated by Quynh Oanh