The UKVFTA implementation plan has been approved

The implementation plan for the UK-Vietnam Free Trade Agreement (UKVFTA) was approved by the Prime Minister on May 19, 2021. The purpose is to assign tasks to relevant organizations and effectively implement this agreement.

Regarding guidelines, the Prime Minister directed relevant ministries, departments, agencies, and organizations to closely follow Decision No. 1201/QD-TTg dated August 6, 2020, and Official Letter No. 6548/VPCP-QHQT dated August 10, 2020, on the Implementation Plan of the EU-Vietnam Free Trade Agreement (EVFTA). The reason is because that UKVFTA inherits many contents of EVFTA.

Regarding communication, the Prime Minister requested the dissemination of information about UKVFTA and the UK market to relevant stakeholders, especially farmers, fishermen, industry associations, and cooperatives. Forms of information are various such as press publications, training classes, online training courses, seminars, etc.

As assigned by the Prime Minister, the Ministry of Industry and Trade will act as the focal point for information on UKVFTA. The Ministry is responsible for providing information, guidance, and clarification of commitments and issues related to the Agreement.

Regarding the mechanism, the Prime Minister suggested that relevant parties improve competitiveness, develop human resources, ensure social security policies, protect the environment, and develop sustainably.

Regarding implementation, the Prime Minister assigned state agencies to grasp information on the trade-investment forecast on the UK market. From there, Vietnamese businesses can promptly grasp information, technical requirements, regulations on import and export management of the UK.

Trade and investment promotion programs in the UK are encouraged by the Prime Minister.

In addition, programs to support and improve competitiveness for industries and businesses, especially small, medium and micro enterprises need more attention. The industries and goods directly affected by the Agreement need to prepare response solutions.

In the immediate future, the Prime Minister called for supporting Vietnamese businesses to participate in production networks, value chains, and supply chains with UK businesses. In addition, businesses with UK capital will be encouraged to connect with domestic businesses.

The Prime Minister hopes that Vietnam's strong goods exported to the UK will soon be recognized. Thereby, the recognition of the evaluation results between the two parties would be formed.

UKVFTA was officially signed on December 29, 2020, in the UK and takes effect from May 1, 2021. This agreement will help Vietnam and the UK maintain preferential trade conditions and economic benefits through the market opening commitments already in the EVFTA.

The Agreement consists of 9 articles; 01 Appendix amending a number of articles of the text of the EVFTA; 01 Protocol and 01 bilateral exchanged letter between Vietnam and the UK. Basically, the contents covered by UKVFTA are similar to EVFTA.

In the context that the UK has just left the EU and ends the transition period on December 31, 2020, UKVFTA ensures uninterrupted bilateral trade between Vietnam and the UK.

Thanks to EVFTA, Vietnam's export to the EU kept its growth rate, despite the impact of Covid-19. Specifically, export turnover to the EU market in August, September, and October 2020 respectively reached US$ 3.25 billion, US$ 3.07 billion, and US$ 3.3 billion, up 4.2%, 8.7 %, and 6.3% over the same period in 2019.

The UK is Vietnam's third-largest trading partner in Europe. In January 2021, the total import-export turnover between Vietnam and the UK reached more than US$ 657 million, up nearly 79% over the same period last year. In England alone, Vietnam's export turnover reached more than US$ 598 million, an increase of nearly 85% over the same period in 2020 and nearly 57% compared to December 2020.

The market growth potential in the UK for Vietnamese products is still very large because Vietnam's exports only account for no more than 1% of the market share in the total annual import turnover of nearly US$ 700 billion (2019) of the UK.

The items that are forecasted to have export growth potential after the UKVFTA comes into effect are textiles, footwear, rice, seafood, and wood products.

With a commitment to reduce taxes up to 99% as the route, UKVFTA is forecasted to help trade between Vietnam and the UK make a breakthrough in the near future.