Enjoying incentives from the UKVFTA and CPTPP will help Vietnamese goods have more advantages and increase competitiveness in the UK market.

Vietnamese goods "double" the advantage

It is expected that on December 15, 2024, the agreement on the UK's participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will come into effect. Thus, in addition to the Vietnam - UK bilateral Free Trade Agreement (UKVFTA), Vietnam will have additional policies under the CPTPP with the UK market.

According to the Ministry of Industry and Trade, the highlights of the UK's commitments in the CPTPP accession document bring benefits to Vietnam. "Vietnam has achieved its goal of requiring the UK to commit to opening the market at a high level according to the standards of the Agreement and higher for Vietnam in some important contents for us compared to the commitments for other member countries, as well as higher than the commitments in the bilateral FTA between Vietnam and the UK" - Minister of Industry and Trade Nguyen Hong Dien spoke at the 7th Session of the 15th National Assembly on June 8, 2024.

Accordingly, when joining CPTPP, the UK committed to eliminating 94.4% of tariff lines for Vietnam as soon as the Agreement comes into effect (other CPTPP member countries are 93.9%). Basically, many agricultural products with export potential and strengths of Vietnam such as rice, seafood, cassava starch, etc. enjoy better commitments from the UK than those in the UKVFTA.

For example, for rice - Vietnam's main export item, within the framework of CPTPP, the UK committed to giving Vietnam a tariff quota that gradually increased from 3,300 tons/year in the first year, to 17,500 tons/year from the 8th year (ie 2030) onwards, with a tariff rate in the quota of 0%, nearly double the amount of rice quota that the UK committed to in general for other CPTPP countries.

The UK also committed to allocating quotas on a “first come, first served” basis and not requiring administrative procedures such as issuing rice variety certificates as in the previous bilateral FTA.

Another export item that is Vietnam's strength is tuna, which the UK has committed to completely eliminate import quotas and taxes as soon as the Agreement comes into effect or after 7 years with a few tax lines, a big improvement compared to the tariff quota of only over 1,500 tons/year in the previous bilateral FTA.

Notably, Minister of Industry and Trade Nguyen Hong Dien said that along with joining the CPTPP, the UK has officially recognized Vietnam as a market economy, which is very favorable for our country in trade defense investigations, especially anti-dumping investigations. With this result, Vietnam's export goods will not be discriminated against and will be subject to more reasonable anti-dumping taxes.

Promoting strong bilateral trade growth

Currently, the UK is Vietnam's third largest export market in Europe after the Netherlands and Germany. According to the General Department of Customs, in the first 8 months of 2024, Vietnam's exports to the UK reached more than 5.05 billion USD, an increase of 23.5%. This shows that the UKVFTA has been opening the door for Vietnamese goods to access the world's potential export market. In addition, relatively large tariff incentives are advantages for Vietnamese goods to increase their competitiveness in the UK market.

In fact, the impressive export growth to the UK in recent times clearly demonstrates the competitiveness and proactiveness of Vietnamese enterprises in taking advantage of the market space and incentives from the UKVFTA. Currently, many Vietnamese products are gradually dominating the UK market, typically textiles, footwear, consumer electronics, spare parts and equipment, and many products with growth prospects are healthcare products, iron and steel.

With the tariff reduction roadmap of the UKVFTA, along with policy incentives under the CPTPP for the UK market, Vietnamese goods are gradually gaining a prominent advantage over similar products from other countries that do not have an FTA with the UK such as China, India, Pakistan, Thailand, Malaysia, Indonesia or some South American countries.

In addition, the UK's accession to the CPTPP will contribute to connecting the Asia-Pacific region, the Americas with Europe, helping to elevate the CPTPP from a regional agreement to a global agreement, while contributing to the development of peace, stability and prosperity in the Asia-Pacific region.

Economically, the UK's accession to the CPTPP will help promote and attract more economies to join this regional FTA, expanding market access opportunities for Vietnamese goods and contributing to increasing Vietnam's attractiveness in the eyes of foreign investors.

British Ambassador to Vietnam Iain Frew said that the UK joining the CPTPP will further boost bilateral trade growth. “Joining the CPTPP demonstrates the UK’s strategic commitment to the Indo-Pacific region. This is particularly significant as our two countries celebrate the 50th anniversary of diplomatic relations. I look forward to working closely with the Vietnamese Government, partners and businesses to make the most of this new partnership,” Ambassador Iain Frew added.

Source: Vietnamexport