Vietnam-UK trade turnover soars after post-Brexit free trade deal

By Duc Minh February 27, 2021 | 06:20 pm PT

Workers at a textile factory in Vietnam's southern province of Long An, February 2020. Textile is on the list of industries expected to benefit from the new free trade deal between Vietnam and the U.K. Photo by VnExpress/Quynh Tran.

Trade turnover between Vietnam and the U.K. in January increased by 78.6 percent from the same period in 2020, right after the UKVFTA came into effect.

Citing data from Vietnam Customs, the Europe-America Market Department under the Ministry of Industry and Trade said export-import turnover between Vietnam and the U.K. in January reached over $657 million.

Vietnam exported to the U.K. over $598 million worth of goods, an increase of 84.6 percent from January last year and 56.5 percent from December. This growth amid an ongoing Covid-19 pandemic showed the promise of Vietnam-U.K. Free Trade Agreement (UKVFTA), which came into effect on Dec. 31 last year, said the ministry.

As per the agreement, the U.K. would remove import taxes on 99.2 percent of tariff lines within six years, equivalent to 99.7 percent of Vietnam’s export turnover to the country. The EU had already promised Vietnam a tariff rate quota (TRQ) with an import tax of 0 percent for some products, while export industries expected to benefit greatly from this agreement include seafood, rice, textiles, wood, vegetables and footwear.

In January, the ministry said some major products exported from Vietnam to the U.K. included seafood, vegetables, phone parts, computers and electric components, all of which increased from the same period last year.

In return, imports from the U.K to Vietnam reached over $59.3 million, a 34.3 percent increase year-on-year. Some major products included metal, pesticide and textile materials, according to the ministry.

Last year, export-import turnover between the two countries reached $5.64 billion, in which Vietnam's exports to the U.K. reached $4.95 billion, resulting in a trade surplus of $4.27 billion. The U.K. continued to be Vietnam's third-biggest trade partner in Europe, behind Germany and the Netherlands.

By December last year, the U.K. had 411 investments projects in Vietnam with a total registered capital of $3.84 billion, ranking it 15th among countries and territories investing in Vietnam. Important projects include those regarding finance, banking and renewable energy.

The UKVFTA was signed in London on Dec. 29 last year to maintain Vietnam and the U.K.'s existing relationship once the Brexit transition period ends on Dec. 31.