The UK and Vietnam have both joined the CPTPP and UKFTA, 99% of import and export goods between the two countries are duty-free. Vietnam and the UK can take advantage of the benefits from these agreements to accelerate trade in goods, especially agricultural trade...

Recently, in Ho Chi Minh City, the British Consulate General in collaboration with Redfern Digital and The Sentry Company organized a business meeting with the participation of reputable importers, distributors and retailers in Vietnam, to explore opportunities to import consumer goods from the UK under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam - UK Free Trade Agreement (UKFTA).

The event attracted more than 50 businesses in the city and industry experts to discuss how Vietnamese importers can take advantage of the benefits of CPTPP and UKFTA to import UK products.

AGRICULTURAL PRODUCTS, FOOD AND BEVERAGES ACCOUNT FOR A LOW PROPORTION IN TRADE

According to the British Consulate General in Ho Chi Minh City, in 2024, the exchange of goods between Vietnam and the UK will reach 8.5 billion USD; of which Vietnam's exports to the UK will reach 7.7 billion USD. On average, each year, the UK spends 85-95 billion USD on importing agricultural products, and the export value of agricultural products is about 30-35 billion USD. Meanwhile, Vietnam's agricultural, forestry and fishery exports will reach 62.5 billion USD in 2024 and its agricultural imports will reach nearly 50 billion USD, with a trade surplus in this sector of 12.07 billion USD.

Although the exchange of goods is diverse, the group of agricultural products, food and beverages accounts for a relatively small market share in the total bilateral trade turnover between the two countries. Drinks, mainly whisky, account for a significant proportion of UK exports to Vietnam, with a turnover of US$77.6 million in 2023. However, the absence of key UK agricultural exports such as salmon, shellfish, chocolate and cheese from the export portfolio shows the gap that UK exporters need to fill in the Vietnamese market.

Similarly, Vietnam is exporting a variety of products to the UK: telecommunications equipment, footwear, clothing. These items are dominating Vietnamese agricultural exports to the UK. Agricultural products currently account for only 4.8% of total exports from Vietnam to the UK. “This is not necessarily a disappointment, but rather shows the huge and important growth opportunities in the agricultural sector of each country, which is expected to play a significant role in shaping the trade relationship between the UK and Vietnam,” said Alexandra Smith, British Consul General in Ho Chi Minh City. Ho Chi Minh commented.

"To date, the UK has invested in Vietnam with a total of 567 projects, with a total registered capital of nearly 4.5 billion USD. Currently, the UK ranks 15th out of 143 countries and territories with direct investment in Vietnam." Mr. Alexandra Smith - British Consul General in Ho Chi Minh City.

Some of the areas in which British businesses are interested in investing and increasing cooperation in Vietnam include: renewable energy such as wind power, energy transmission and storage; financial services, insurance, machinery, equipment, technology transfer and education, beverage and food, and automotive industries.

“Famous British brands such as Jo Malone, Lush, The Body Shop, Mothercare and Unilever already have a presence in Vietnam, and through the UK Government’s trade policy and export support, we look forward to expanding the market and helping more British retail brands, especially small and medium-sized enterprises, access this expanding market,” said Alexandra Smith, British Consul General in Ho Chi Minh City.

OUTLOOK FOR NUTRITIONAL FOODS AND BEVERAGES

Mr. David Johnstone - Head of the UK Government's Free Trade Association Implementation Department, said that the UK has signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). At the same time, the Vietnam - UK Free Trade Agreement (UKFTA) has been implemented for many years.

Under these agreements, up to 99% of UK exports to Vietnam are now duty-free, making products in sectors such as fast-moving consumer goods (FMCG), consumer retail, food and beverage (F&B), and healthcare more accessible and competitive, giving domestic consumers more choices of high-quality products.

In addition to reducing tariffs, these agreements also bring many significant non-tariff benefits. For example, the CPTPP ensures faster customs clearance times, with standard commercial clearance occurring within 48 hours of arrival, and urgent shipments cleared within 6 hours of submitting the necessary customs documentation, provided the shipment has arrived. The CPTPP also simplifies registration procedures for cosmetic products from the UK, removing the requirement for a Certificate of Free Goods.

In addition, under the CPTPP, UK exporters can self-certify the origin of their goods, no longer requiring third-party certification. When these measures are fully implemented, the costs and administrative burden will be reduced and will be well received by the business community.

The UK is home to many consumer and retail brands that are popular around the world, making British products a trusted choice for their quality and food safety standards. From tea, chocolate, seafood, meat, vitamins, nutrition brands and home products to perfumes and fashion, Vietnamese consumers now have access to a wide range of British products in traditional retail stores as well as booming e-commerce platforms.

The implementation of the UK-Vietnam Free Trade Agreement in 2019 has strongly boosted bilateral trade, especially in the agricultural, food and beverage sectors. According to the report “Connecting the UK and Vietnam in Agriculture, Food and Drink” conducted by Edelman Public & Government Affairs (EGA) in 2024, with funding from the British Embassy in Hanoi, UK food and beverage exports to Vietnam increased by 97% from 2020 to 2023, reaching US$154 million.

Head of the UK Government’s Free Trade Association, David Johnstone, shared: The UK’s accession to the CPTPP in December 2024 is expected to bring more attractive opportunities for businesses to bring the UK’s rich portfolio of consumer products to Vietnamese consumers.

“Tariff cuts on food and drink, cosmetics and consumer goods, along with commitments to improve customs procedures, will make importing goods from the UK easier and more cost-effective. In 2024, UK exports to Vietnam increased by 9.9%, and with the new opportunities that the CPTPP agreement brings to importers, retailers and distributors of goods from the UK to Vietnam, we expect this trend to continue to increase in 2025,” Mr. David Johnstone expected.

Source: VnEconomy