By Dung Nguyen
HCMC – The United Kingdom-Vietnam Free Trade Agreement (UKVFTA) is expected to help Vietnam save 114 million pounds (US$150.8 million) in export duties, and the UK can save 36 million pounds.
On December 11, the two sides signed the agreed minutes on the conclusion of negotiations for the UKVFTA, which Minister of Industry and Trade Tran Tuan Anh affirmed as an important step for the early signing of the FTA in the upcoming time.
After Brexit, incentives under the European Union-Vietnam Free Trade Agreement will not be applied in the UK. Therefore, the signing of a bilateral FTA was necessary to ensure there would be no interruption to their bilateral trade.
Under the deal, 99% of tariffs are expected to be cut. The UK’s machinery, equipment, tools and parts and pharmaceutical product exports to Vietnam will also be entitled to preferential tax policies.
Enterprises from the UK can access Vietnam’s architectural and e-commercial services and continue providing financial consulting services and auxiliary services in Vietnam.
According to HSBC, the UKVFTA will not only boost bilateral cooperation between the two countries but also create opportunities for the enterprises of the two sides.
Vietnam holds high potential in exporting electronics, footwear, apparel, wooden and seafood products, for which the UK has high demand.
Meanwhile, the UKVFTA will open up many opportunities for the UK’s firms in the finance, insurance, education, consulting, hi-tech, renewable energy and pharmaceutical sectors.
Vietnam has high potential to attract more investment from the UK, which is considered the fifth largest investor worldwide, said HSBC Vietnam CEO Tim Evans.
The UK also attached much importance to the UKFTA as it is seeking to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership in early 2021.
Vietnam is considered an attractive destination for investors thanks to its high growth rate, stable politics, high-skilled laborers and strategy to open its market to investors.
According to statistics from the General Department of Vietnam Customs, the two sides’ bilateral trade reached US$6.6 billion in 2019.
The UK ranked 16th among the largest investors in Vietnam, investing in 402 projects with registered capital of nearly US$4 billion by September 2020.