Vietnam directs resources to promote agricultural trade with the UK

Useable fiscal space

Within the framework of a working visit to the UK from November 11-13, a delegation of MARD led by Deputy Minister Phung Duc Tien attended the Seminar on Connecting Vietnam - UK businesses and meeting with associations and businesses of the two countries.

Attending the forum were many Vietnamese and UK businesses as well as leaders of British Poultry Associations, the British Meat Producers Association, International Market Trade Association...

At the beginning of the meeting, Deputy Minister Phung Duc Tien announced the main contents of his talks with Ms. Tamara Finkelstein, Permanent Deputy Minister of the Ministry of Environment, Food and Rural Affairs of the United Kingdom. He said that the two sides had agreed on the priority contents of cooperation in the field of agriculture in the coming time. And at the same time, they signed a Memorandum of Understanding on cooperation between the two ministries. 

Under the witness of businesses of the two countries, the Deputy Minister announced that the growth rate of Vietnam's agricultural sector reached 2.9%, 2.58% higher than the growth rate of the whole economy. Export turnover of agricultural, forestry, and fishery products in 2021 reached a record of $48.7 billion, up 15% compared to 2020.

Regarding cooperation in the agricultural field with the UK, leaders of MARD assessed that there has been important progress, laying the foundation for future development. 

“The UK and Northern Ireland are one of the strategic and important partners for Vietnamese agriculture in trade and investment, especially through the UKVFTA Agreement”, said the Deputy Minister.

Bilateral trade turnover between Vietnam and the United Kingdom of Great Britain and Northern Ireland in 2021 reached more than $6.6 billion, an increase of more than 17%. In particular, the growth of agro-forestry-fishery trade between the two countries has grown steadily at 6%/year, reaching nearly $1 billion in 2021.

Regarding the prospect of cooperation, Deputy Minister Phung Duc Tien said that the two countries agriculture could effectively complement each other. Vietnam has strengths in tropical agro-products such as rice, vegetables, coffee, tea, cashew, pepper, aquaculture, wood and furniture processing.

Meanwhile, UK agriculture has strengths in temperate agricultural products, new-generation machinery, equipment and inputs, hi-tech for agricultural production, agro-product processing, and vaccine research.

The fiscal space to promote agricultural trade between the two countries is still very large. Vietnam's agricultural exports to the UK only reached about $800 million, accounting for more than 1% of the total value of food imports (about $60 billion) of the UK.

Similarly, the UK's agricultural exports to Vietnam are less than 1% of the total import value of Vietnam's agricultural, forestry and fishery products (over $30 billion).

Regarding investment, FDI from the UK poured into Vietnam's agriculture is still modest (about 40 projects, total capital of $240 million) but has increased by over 10% per year over the past time.

In particular, Vietnam and the UK both share strong commitments to green, sustainable economic development and emission reduction at major international forums such as COP26 and the United Nations Summit on Food Systems.

“I hope that at this seminar, businesses from the two countries will have many common voices, connect, link with each other, share information, and build a long-term and in-depth business cooperation plan. This includes building confidence in developing a greener, more sustainable, and more prosperous agricultural sector", said the Deputy Minister.

Create maximum conditions

At the meeting, several Vietnamese businesses accompanied the delegation of MARD to introduce key agro-products such as coffee, and fruit... to the UK market. In particular, they committed to production according to international standard processes, ensuring food hygiene and safety. 

On the UK side, representatives of businesses and associations of agricultural product manufacturers noted Vietnam on issues such as chemical residues and plant quarantine with exported products. And at the same time, they promised to closely coordinate in dealing with and removing difficulties.

In addition, the UK partner welcomed Vietnam for transforming its agricultural production thinking towards sustainability.

The UK side also noted that more and more Vietnamese businesses are deeply concerned about the effects of development on the environment and society, and ensuring the life of workers.

British businesses mostly consider the UKVFTA Agreement as a lever to promote trade, by taking advantage of preferential tax rates. At the same time, when the UK is expected to join the CPTPP Agreement, they classified Vietnam as a country of special interest.

The UK side also recommended the Vietnamese partner to further enhance the technology content - a strength of British businesses. This is to meet the increasing requirements of the international market.

Listening to opinions, Deputy Minister Phung Duc Tien committed to spending maximum resources to support the businesses of the two countries for the common benefit.

He also expressed his desire to attract and cooperate with businesses to invest and apply high technology for agricultural production. This includes processing, preserving, and distributing agro-products and food.

“In trade and investment activities, we expect UK businesses to create joint venture partners and a close and reliable association with businesses and farmers in Vietnam. The product of the cooperation between the two sides includes not only economic efficiency, but also the value of friendship, technology sharing, and cultural interference between the two countries", Deputy Minister shared.

MARD aims towards the 50th anniversary of the establishment of diplomatic relations between Vietnam and the UK (in 2023) and the implementation of the Memorandum of Understanding signed between the two Ministries. The ministry will organize many conferences, seminars, and forums to promote trade between the two countries.

In the agricultural sector, Deputy Minister Phung Duc Tien promised to act as a bridge to connect more Vietnamese businesses to survey and learn about the UK market.

With the potential to be the gateway to ASEAN, and one of the pillars of a market of 650 million people, Vietnam affirms that it always manages agricultural issues based on international standards and regulations and in harmony with WTO regulations.

Particularly, the agricultural sector has 9 related laws, and dozens of sustainable development plans and strategies, aimed at green development and sustainable development.

Vietnam currently uses only 1.62 kg of pesticides per ha on average (ranked 80th in the world), built many large raw material areas, and successfully produced more than 3 million tons of organic fertilizers. The Deputy Minister emphasized: “Vietnam orients management according to a closed cycle from production, cultivation, to preservation, processing, transportation, and distribution. At the same time, we are also actively linking production with digital transformation, ensuring traceability of agricultural products and transparent disclosure of product information".

Mr. Nguyen Quoc Toan, Director of the Department of Agricultural Product Processing and Market Development, said that businesses exporting to the UK need to pay more attention and raise awareness about issues related to SPS, especially in the livestock sector.