Signing of the UK – Vietnam Free Trade Agreement (UKVFTA) has ensured continuity of mutual trade and will spark new opportunities for Vietnam as one of the few Asian countries to secure an exclusive FTA with the UK. As the representative of a leading UK company in Viet Nam, Mr Matthew Powell – Director of Savills Hanoi, attended the signing ceremony, and shared his outlook for Vietnam and economic development.
Minister of Industry and Trade, Mr Tran Tuan Anh, and UK International Trade Secretary, Ms Liz Truss, signed the deal to rapturous applause from delegates and representatives of both countries.
The agreement will facilitate extensive benefits and opportunities for both sides. The UK has been Vietnam’s third largest trading partner in Europe, with, as of August 2020, four hundred ongoing projects invested to over US$3.6 billion. With this new FTA, more investment capital, technology transfer, and transactions are expected from the UK.
Mr. Matthew Powell commented, “Savills is very pleased to see the UKVFTA ratified, as both business communities have developed mutually strong and lasting relationships. As the agreement comes into effect, we hope to see more UK investments into services, products, and more business expansions.”
“The UK is known for its consultancy expertise, particularly in real estate. Besides being the sector of choice for local investors, property remains the safest and most effective investment channel. Our 25 years in Vietnam has given us a greater understanding of the culture and business environment which will add value to strengthening and developing even greater business ties between the two countries,” Mr. Powell added.
The new UKVFTA will transition similar benefits from the EU – Vietnam Free Trade Agreement (EVFTA) as the UK will be out of the EU by the end of 2020. For Vietnam, the UKVFTA will primarily boost exports, while for the UK, it is considered an essential first step in gaining access to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Under the UKVFTA, the UK will first eliminate 65% of tariffs moving up to 99% after seven years to boost bilateral trade. Vietnam will first remove 48.5% of tariffs from UK imports, which after six years, will rise to around 91.8% or 97.1%. The tariff rate quotas provided in the EVFTA have been agreed to guide those in the UKVFTA, after the UK reviews their actual trade value with Vietnam.