Vietnam, UK conclude bilateral FTA negotiations
An agreement on concluding negotiations of the Vietnam-UK Free Trade Agreement (UKVFTA) will be signed on December 11, according to the Ministry of Industry and Trade (MoIT).
The deal is significant for both countries in the current context as it meets the demands of the two sides.
According to the MoIT, the FTA between the EU and Vietnam (EVFTA), which has been effective from August 1, will not be applied on the UK after December 31, 2020.
Both Vietnam and the UK hope to finalise the agreement as soon as possible to promote economic recovery after the COVID-19 pandemic. Meanwhile, the majority of the content in the UKVFTA are similar to those of the EVFTA, saving negotiation time for the deal.
The UKVFTA is expected to help boost tourism cooperation between the two countries, while encouraging partnership in other fields such as development cooperation, defence, security, culture, and education and training.
It also spreads a positive message of the bilateral relations, especially after their recent Joint Statement on bilateral cooperation vision on the occasion of the 10th anniversary of strategic partnership.
Vietnam and the UK set up diplomatic relations in 1973. Over the past 47 years, bilateral ties have unceasingly developed. According to the General Department of Vietnam Customs, two-way trade reached US$6.6 billion in 2019.
The UK has been the third largest trade partner of Vietnam in Europe after Germany and the Netherlands in recent years.
Vietnam mainly exports garments, footwear, wood and wooden furniture and seafood to the UK, while importing pharmaceuticals, machineries and equipment from the UK.
Due to the impact of the COVID-19 pandemic, by late October two-way trade reached only US$4.7 billion, down about 15%, with Vietnam’s exports to the UK hitting US$4.1 billion, a decline of 14.19% year on year.
In the first eight months of 2020, the UK run 400 valid projects in Vietnam with total registered capital of US$3.6 billion, ranking 16th among countries and territories investing in Vietnam.
However, the investment scale has yet to match the potential of the UK – one of the largest countries in terms of investing abroad with about US$300 billion each year. The UKVFTA is expected to bring about more investment and cooperation opportunities for the two sides, supporting them in post-pandemic recovery.
Areas which the UK is strong in and Vietnam needs include renewable energy, consumer goods production, and greenhouse gas emission mitigation.
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