Previously, only a few Vietnamese agricultural products such as cashews, coffee, and pepper could be seen at U.K.’s supermarkets, while rice, fruits and other products were mainly sold at small supermarkets that serve the Vietnamese and the Asian community.
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Vietnamese lychees are on sale at a supermarket in the U.K. |
This positive result is made possible through great efforts of Vietnamese agricultural exporters and relevant ministries, but it also reflects the benefits that the Vietnam - U.K. Free Trade Agreement (UKVFTA) has brought about after one year of implementation.
According to Nguyen Canh Cuong, Trade Counselor at the Vietnamese Embassy to the U.K., UKVFTA is a momentum to promote the recovery of Vietnam-U.K. trade which suffered a significant decline in 2019 and 2020. Two-way trade between the two countries reached more than 6.6 billion USD in 2021, up 17.2 percent compared to the previous year. Of which, Vietnam gained a trade surplus of approximately 4.92 billion USD, an increase of 15.2 percent compared to that of 2020. British exports to Vietnam also rose by 24 percent.
He said this is a very encouraging result in the context of the container crisis, high freight shipping costs and the U.K. economy not completely recovering from the COVID-19 pandemic.
Commenting on the benefits of UKVFTA, Luong Tuan Anh, a lecturer at Economics Faculty of U.K.’s Montfort Leicester University, said that Vietnam is a gateway to the huge markets of Asia-Pacific and Europe, the signing of UKVFTA helps Vietnamese companies become intermediaries for companies in the U.K. who are having difficulty accessing the European market after the country leaves the E.U..
Pham Trung Kien, General Secretary of the Vietnam Business Association in the U.K. said the agreement is really an "impetus" for Vietnamese businesses in the U.K. as well as in the domestic market in the context that the British Government is opening the door to create opportunities for cooperation and trade with other countries in the world, including Vietnam, a strategic partner of the U.K. in Southeast Asia.
Thai Tran, Director of TT Meridian Company, an enterprise engages in the import and export business in the U.K., said that the agreement has reduced import taxes for many types of goods that his company is trading such as fragrant rice, fruits, food and packaging which help it reduce the cost and increase its competitiveness, thereby can push up the import of many potential products from Vietnam to the U.K.
However, he pointed out that the UKVFTA sets high-quality technical standards, therefore only high quality products can enjoy preferential tax from the agreement.
In addition to quality issues and competitive prices, Vietnamese companies need to pay attention to business reputation to successfully penetrate the U.K. market, according to Tuan Anh.
He emphasized that Britain has long been famous as a country that respects the rule of law. To approach large British companies, Vietnamese businesses need to be transparent about information such as having a reliable website, good track records with reputable businesses, clear contracts and respecting all terms in the contracts.
Anh noted that U.K. consumers are particularly concerned about social issues such as child labor or sub-standard working conditions as well as activities that cause high emissions, thus, businesses must pay attention to corporate social responsibility.
Meanwhile, Ian Gibbons, Chief Executive Officer at U.K. - ASEAN Business Council (UKABC), stressed the importance of thorough market research when exporting to the U.K. to ensure the products are suitable and capable to compete in the market. He also highlighted the need to build trust and reputation with British partners through developing long-term and sustainable relationships.
According to Thai Tran, to be able to get a firm foothold in the U.K. market, it is necessary to build prestige and high quality national brand for Vietnamese goods with a strategy of using a pyramid model, in which leading businesses will be at the top. They are a group of large-scale enterprises with sufficient resources to manage quality and build brands that can convince British partners to sign contracts, he said, adding that the expansion of this model will help Vietnamese brands gain a foothold in the U.K. market, creating a foundation for other businesses to enter the U.K. market.
Source: VNA