UK's accession to CPTPP to bring more incentives for Vietnamese exports
The UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) will complement the existing UK-Vietnam Free Trade Agreement (UKVFTA) and help upgrade the bilateral relations thanks to additional preferential tariffs, Kemi Badenoch, Secretary of State for the Department for Business and Trade of the UK, reportedly said.
Dau tu (Investment) newspaper also quoted the official as saying the removal of trade barriers will support the common economic security between the two countries, as they join deeply in each other's supply chains and diversify trade activities, thus creating greater opportunities for businesses of both nations.
The UK has completed negotiations to join the CPTPP, which is expected to be signed in 2023 and ratified by member countries in 2024.
With 11 members, it is also one of the largest trade pacts in the world, covering 13.5% of global GDP and a market of about 500 million people. The UK’s participation in the agreement will help the bloc’s GDP increase by nearly 16%.
It is expected to open more trade cooperation opportunities between Vietnam and the UK, as well as bring about investment opportunities to each CPTPP member.
The UKVFTA, which was signed and took effect in early 2021, has created a boost to goods trade between the two nations. Two-way trade reached nearly US$6.6 billion in 2021. Vietnam's exports to the UK hit nearly US$5.8 billion in the year, and US$6.06 billion in 2022, up 16.4% and 5,2% year-on-year, respectively.
Regarding the UK's commitments to cutting tariffs for Vietnam’s goods within the CPTPP, UK Ambassador to Vietnam Iain Frew said this will bring more benefits to Vietnamese exporters.
Agriculture and fisheries, including vegetables and fruits, coffee, cashew nuts, seafood, textiles and footwear - Vietnam’s strong exports to the UK - are to benefit the most from the trade deal.
After the UK joins the CPTPP, Vietnamese businesses will have an opportunity to choose which FTA incentives are most beneficial and easiest to apply.
On the other hand, the UK can increase the export of its farm produce, equipment and technologies to Vietnam. Investment flows from the UK to CPTPP member countries, including Vietnam, will be also expanded thanks to this accession.
According to Vietnam Trade Counselor in the UK Nguyen Canh Cuong, new-generation FTAs will create more room for Vietnamese goods to make inroads into the UK.
However, he also advised Vietnamese exporters to pay heed to meeting the quality requirements of importers, and issues related to consumer trends in the European nation.