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Taking advantage of UKVFTA to increase opportunities for Vietnamese goods to enter the UK market

08:08 - 02/10/2023

Like the EVFTA, the UK-Vietnam Free Trade Agreement (UKVFTA) is a new-generation FTA with high standards and a strong degree of liberalization. UKVFTA has a wide scope of commitments, covering traditional (such as opening markets for goods, services, investment...) and new (such as public procurement, state-owned enterprises, competition policy...). Incentives from UKVFTA help Vietnamese goods have more opportunities to continue expanding the market in the UK, especially those products where the UK's supply system has some gaps due to the impact of Brexit and the military conflict in Ukraine.

Vietnam's exports to the UK grew strongly thanks to the push from the UKVFTA

According to Vietnam Customs statistics, in the first 6 months of 2023, the total two-way trade turnover of Vietnam - the UK reached more than 2.3 billion USD, down 23.1% over the same period last year. In particular, Vietnam has a trade surplus of more than 5.2 billion USD. In the first 49 months of 6, the export value of Vietnamese goods to the UK reached more than 2023.2 billion USD, down slightly by 86.2% over the same period in 2022. This decline is low compared to the decline in Vietnam's average export turnover (-2022.8%) to European countries in the first 1 months of 6 and -2023.11% to the world.

Growth items include: paper and paper products increased by 104.9%; products from rubber 60.2%; phones and components of all kinds increased by 29.6%; vegetables and fruits increased by 28.3%; other machinery, equipment, tools and spare parts 24.4%; footwear of all kinds increased by 5.1%; cashew nuts increased by 2.7%; plastic products rose 1.4%.

Items accounting for a large proportion of export turnover include: phones of all kinds and components (22.3%); machinery, equipment, tools and spare parts (14.6%); footwear of all kinds (13.1%); textiles and garments (11.1%); computers, electronic products and components 4.9%; seafood products 4.9%; wood and wood products 3.2%;

In contrast, in the first 6 months of 2023, the import value of goods from the UK to Vietnam reached 372.5 million USD, equivalent to the same period in 2022. Imports increased sharply including: Seafood products 233.3%; iron and steel products 94.6%; fabrics of all kinds 71.9%; common metals 51.3%; garment materials 15.5%; products from plastics 15.4%; machinery, equipment, tools, other spare parts +6.4%. Imports fell sharply including: rubber (-82.8%); Scrap iron and steel (–58.5%) ; phones and components (-56.8%); cameras, camcorders and components (-31.2%); fabrics of all kinds – 32.1%; plastic materials – 29.9%, complete cars of all kinds – 17.7%.

Items accounting for a large proportion of import turnover include: Machinery, equipment, tools and spare parts (24%); Pharmaceuticals 11.8%; Chemical products 6.4%; Textile, garment, leather and shoe materials (5.2%); Fisheries (4.6%).

Mr. Nguyen Canh Cuong - Ambassador Counselor, Vietnam Trade Office in the UK said that Vietnamese goods are having opportunities from the preferential tariff basis under UKVFTA. In particular, Vietnamese enterprises have the opportunity to increase the export of paper and paper products, rubber, vegetables, food, leather shoes ... to England.

Meanwhile, the UK has a huge import demand for these commodities while the supply system has some gaps due to the impact of Brexit and the military conflict in Ukraine. In addition, the UK market is quite large (about 68 million inhabitants), the demand is diverse (the Asian community is more than 5.5 million people). Diplomatic relations Vietnam – UK continues to thrive. This is an opportunity for Vietnamese goods to continue to expand the market in this country.

Along with the opportunities, Vietnamese goods when accessing the UK market also face many difficulties. The Vietnam Trade Office in the UK said that international trade tends to decline when the global economy slows down and geopolitical conflicts escalate. Market demand fell due to high inflation and people tightening their spending. USD/GBP exchange rate fluctuations increase financial risks for Vietnamese exporters.

Besides, high quality requirements, competitive prices; regulation of the use of UKCA marking in lieu of CE for industrial products; The bill on combating deforestation and forest degradation will affect exports of wood products, coffee, rubber, vegetable oil, soybean.

The trend of products for dieters is more popular such as vegan, gluten abstinence (gluten allergy), sugar abstinence (diabetics) making the production and supply of agricultural foods need to be more specialized and complicated.

Facing the above difficulties, Mr. Nguyen Canh Cuong said that in the coming time, the deal will organize and build a network with the British business community and Vietnamese businesses in the UK to connect and introduce partners for Vietnamese businesses, find out and provide Vietnamese enterprises with up-to-date information on goods quality standards, import regulations into the UK, update and disseminate the e-book "UK market – what you need to know", as well as build a www.vietnamtradeoffice.co.uk website to disseminate policy information and market opportunities for businesses.

At the same time, in collaboration with the Trade Promotion Agency, the Department of European-American Markets organized online seminars to advise Vietnamese exporters, connect with UK experts and traders in the fields of agricultural products, textiles, furniture, UKCA, digital marketing..., participate in exhibitions introducing and promoting Vietnamese goods and export potential: Birmingham Furniture Show (T1-2023), Birmingham FOODS & Drink EXPO (T4-2023), Balmoral Show (T5-2023).

In the coming time, we will actively work with UK supermarkets to bring Vietnamese goods to supermarkets in the host country - Vietnam Trade Office in the UK information.