Vietnamese exports enjoy advantages in UK market

VOV.VN - The nation boasts plenty of advantages in the UK market, with Vietnamese exporters striving to capitalize on these advantages, according to Nguyen Canh Cuong, Trade Counselor of the Vietnam Trade Office in the UK.

Cuong said that the country is one of few places to have signed a free trade agreement (FTA) with the UK ( The UK-Vietnam Free Trade Agreement (UKVFTA). Indeed, only Singapore and Vietnam have so far signed an FTA with the UK.

Vietnam makes up a large commodity-producing economy in the region as it boasts a great advantage compared to ASEAN member states that have yet to sign an FTA with the UK when exporting goods to this market, largely thanks to preferential tax exemptions and reduction under the terms of the agreement.

The Vietnamese national brand value over recent years has increased dramatically throughout the world thanks to a range of outstanding achievements, not only in socio-economic development, but also in political stability, security, social order, and COVID-19 containment efforts, Cuong said.

He went on to affirm that these national brand values are creating very positive effects in the psychology of British businesses and consumers.

The UK may join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2023 and is in the process of doing. The UK has also expressed goodwill to make more commitments to open markets for some of Vietnamese products, thereby creating favourable conditions for local businesses to better compete in this market and boost local exports to the UK in the coming time.

The trade official emphasised that Vietnamese firms are making good use of these advantages, particularly with Vietnamese exports to the UK increasing significantly this year.

The past nine months of the year witnessed the total bilateral trade turnover reach more than US$5.22 billion, of which Vietnamese trade surplus and total export turnover to the UK hit US$4.07 billion and nearly US$4.65 billion, up 8.1% on-year.

The remaining months of the year will likely see exports to the UK continue to witness an upward trend, especially rice, including ST25 rice, which may increase sharply in the fourth quarter of the year and during the first two months of 2023.

Since the beginning of the year, the Vietnam Trade Office in the UK has organised many consultation sessions relating to trade connections in order to provide market information and give advice to Vietnamese enterprises on business practices in the UK. This is part of efforts to build trust and establish initial partnerships with British businesses, with this being viewed as a step to prepare for future export contracts.

The consultation sessions largely focus on the market for furniture, agricultural products, clothing, and some educational products, especially those that local businesses can benefit from the UKVFTA and those that the UK has high consumption demand. This is along with some traditional UK supplies from Ukraine, Russia, China, and some EU member states being disrupted.

The Trade Office has therefore organised a wide range of trade promotion events, such as supporting Vietnamese businesses in attending e-commerce fairs. In the coming year, the Trade Office will continue to promote the country’s trade and exports to the UK, including participating in the largest furniture fair in the UK January Furniture Show slated to take place in Birmingham in early 2023.

It will also participate in several events held to celebrate the 50th anniversary of Vietnam-UK relations, especially activities to promote national brands.

With regard to challenges facing the UK market, Cuong outlined that the geographical distance between the two countries makes transportation costs from Vietnam to the UK high, accounting for a significant proportion of the cost faced by Vietnamese exported products.

In addition, high fuel prices are also increasing the cost of shipping and marine insurance. Another challenge is the difference in business methods and practices between the two countries, he added.

Cuong stated that Vietnamese businesses must fully grasp and adjust their business methods and practices in order to suit the UK market and build up trust with British partners to sign contracts with major enterprises and distributors that have capable distribution systems throughout the UK.

Regarding these opportunities, Cuong affirmed that the UKVFTA continues to be a factor in creating competitive advantages for many Vietnamese products in the UK market.

Despite facing recent major political and economic upheavals, the UK remains a significant market with stable purchasing power. In the long run, British businesses have the trust of both customers and Vietnamese firms, thereby allowing them to build long-term co-operation ties, he added.

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