UKVFTA to take effect from 11 pm on December 31

	Differences between UKVFTA and EVFTA
	UKVFTA opens the door to export goods to the UK
	Businesses to save VND3,500 billion in taxes each year thanks to the UKVFTA

Vietnamese Minister of Industry and Trade Tran Tuan Anh and UK Secretary of State for International Trade Elizabeth Truss sign the minutes on the conclusion of negotiations of the UKVFTA on December 11.

The two countries’ ambassadors were authorised to sign the deal as leading officials of the Vietnamese Government and Minister of Industry and Trade Tran Tuan Anh was unable to travel to the UK to sign directly amid the COVID-19 pandemic.

The UKFTA inherits commitments made in the free trade agreement between the European Union and Vietnam (EVFTA), with amendments to ensure its compliance with the bilateral trade framework between Vietnam and the UK.

Both sides are completing procedures to ensure that the agreement will take effect from 11pm on December 31, 2020.

In the context that the UK left the EU and the Brexit transition period is about to end on December 31, the signing of the free trade agreement will ensure bilateral trade is not disrupted.

In addition, inheriting the EVFTA, the UKVFTA will create a comprehensive, long-term and stable economic trade cooperation framework between the two countries, contributing to promoting multifaceted cooperation, especially when the two sides have just extended the maintenance of bilateral relations at the strategic partnership level.

According to the Ministry of Industry and Trade, the EVFTA has beena huge boost to Vietnam’s exports, helping to diversify markets and export products. Since August 2020, although the disease development in the EU and other countries in the world has beenvery complicated, Vietnam's exports to the EU market have recorded a high increase.

Exports to the EU market in August, September and October reached US$3.25 billion, US$3.07 billion and US$3.3 billion, respectively, upby 4.2%, 8.7% and 6.3% compared to the same period in 2019. From August 1 to December 18, the competent agencies and organisations issued more than 62,493 sets of C/O form EUR.1 with a turnover of more than US$2.35 billion to the EU.

In addition, goods exporting enterprises to the EU also conducted self-certification of origin with total value of US$6 million entitled to tariff incentives under the EVFTA.

Motivated by the UKFTA, the benefits of the two sides in the EVFTA are maintained. This bilateral agreement marks the beginning of anew phase in the relationship between the two countries for the development of key trade areas.

The UKVFTA not only liberalises trade in goods and services but also integrates many other important factors, like moving towards green growth and sustainable development.

The UK is the third largest trading partner of Vietnam in the EU. According to the GDVC, in 2019, the total import and export turnover of the two countries reached US$6.6 billion, of which export turnover was US$5.8 billion and import turnover was US$857 million.

In 2011-2019, the growth rate of Vietnam - UK bilateral import and export turnover increased by an average of 12.1%/year, 10% higher than the average rate of Vietnam per year. Growth of total import-export turnover to this market is also high (more than 10%).

Vietnam mainly exports phones and components, garment and textiles, footwear, fishery products, wood and wooden products, computer and components, cashew, coffee, and pepper to the UK, while importing pharmaceuticals, machineries, equipment, iron, steel and chemicals from the UK.Import and export goods between the two countries are complementary rather than competitive.

The Ministry of Industry and Trade said the market growth space in the UK for Vietnamese products is still large because Vietnamese exported products only account for less than 1% of the total market share in total imports of nearly US$700 billion per year of the UK (in 2019)