The United Kingdom – Viet Nam Free Trade Agreement (UKVFTA) has officially entered into force since May 1, 2021, marking a symbolic milestone for the ever-growing partnership between Viet Nam and the UK. The trade agreement covers £5.1bn in trade, establishing a platform for further development of trade and investment, as well as providing a solid framework for UK and Viet Nam businesses.

The UKVFTA secures access to staged tariff reductions between the UK and Viet Nam by locking in the 65% of all tariffs that have already been eliminated on UK-Viet Nam trade, which will increase to 99% within the next six years. This includes eliminating tariffs for UK exporters of machinery, mechanical appliances, and pharmaceutical products. The preferential tariffs of the FTA will provide similar opportunities for Viet Nam to expand exports of key products such as phones and components, garments, footwear, and fishery to the UK. Viet Nam continues to receive duty-free tariff quotas for its 14 products, including rice with improved market access.

Under the Agreement, trade in services may continue to flourish. Not only has Viet Nam opened additional sub-sectors for UK service providers, but it has also made commitments higher than those outlined in the WTO - offering the UK the favourable access to Viet Nam’s market. Sub-sectors with higher commitments include financial services, telecommunications, and education services.

On Intellectual Property Rights, both sides continue to commit to a high level of protection. Iconic British Products, including Scotch whisky, Scottish farmed Salmon, Irish whiskey and Irish cream, as well as 36 of Viet Nam’s agricultural products, including Moc Chau tea, Buon Ma Thuot coffee, Hai Hau rice and Phu Quoc fish sauce, continue to be protected.

The UK-Viet Nam FTA also maintains access to public procurement markets in Viet Nam, enabling UK firms to have more opportunity to bid for public procurement contracts.

This trade deal also serves as a stepping-stone towards the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a priority for the UK. Viet Nam supports and welcomes the UK’s application for accession to the CPTPP. This will bring the two economies closer to the CPTPP’s vision of advancing economic integration and supporting the liberalisation of trade and investment globally.

The UKVFTA’s official entry into force is the latest milestone in a year of strengthening bilateral and trading relations between the UK and Viet Nam. This will sit alongside and complement the Joint Declaration on Joint declaration on UK - Viet Nam strategic partnership, which was signed in September 2020. The UK is committed to deepening its engagement in the Indo-Pacific, including as an energetic and dependable partner in the growing prosperity of the region, and in this Viet Nam will be a key partner.