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| The UK has officially recognised Vietnam as a market economy . |
(PLVN) - The UK is one of the five markets that spend the most on imported goods. Currently, Vietnamese goods account for less than 1% of the country's imports, although the two sides have had a bilateral trade agreement since 2021. The UK's accession to the CPTPP (Comprehensive Trans- Pacific Partnership Agreement) is expected to further promote the increase of Vietnamese goods in this country.
Vietnamese goods only account for 1% of market share in the UK.
Total two-way trade turnover between Vietnam and the UK in 2023 reached 7.14 billion USD, up 4.39% compared to 2022. Of which, exports reached 6.35 billion USD, up 4.64% compared to 2022. Newly updated data shows that exports to the UK in 2024 are increasing. Specifically, in the first 4 months of 2024, the export turnover of goods to the UK reached 2.47 billion USD, up 30.04% over the same period last year.
The UK is always in the Top 5 largest import markets in the world with annual spending of up to 900 billion pounds. Meanwhile, goods originating from Vietnam currently account for less than 1% of the country's imports. This figure was achieved after 3 years of implementing the UKVFTA (Free Trade Agreement between Vietnam and the UK).
Sharing about the fact that Vietnamese goods have not appeared significantly in the UK market, Mr. Luong Hoang Thai - Director of the Department of Multilateral Trade Policy (Ministry of Industry and Trade) said that the rules of origin have always been the reason why Vietnamese goods have encountered difficulties when exporting to countries that have signed new generation agreements with Vietnam. Accordingly, this rule of origin always requires goods with pure Vietnamese origin to enjoy preferential tax rates (except for CPTPP, which allows the origin of member countries to be combined to enjoy incentives).
However, the commitment in the UKVFTA also has additional provisions on the mechanism of cumulation of origin rules if goods use raw materials originating from European member countries (because the UKVFTA inherits almost all the regulations committed in the Vietnam - EU Free Trade Agreement). Accordingly, only Vietnamese goods using raw materials and components imported from Europe will enjoy tariff incentives. But in reality, no enterprise has imported raw materials and components from Europe.
Strong advantages from CPTPP
Mr. Luong Hoang Thai affirmed that Vietnamese goods have many advantages when the UK officially joins the CPTPP. The first advantage is that there are up to 94.4 completely liberalized tariff schedules. Many agricultural products with export potential and strengths of Vietnam such as rice, seafood, cassava starch... all enjoy better commitments from the UK than those in the UKVFTA.
Next, the added advantage of the origin of raw materials and components from CPTPP countries for export to the UK is also considered a strength. For example, to enjoy preferential tax rates in the committed UKVFTA, Vietnamese products must prove their origin. The regulations on the rules of origin of the UKVFTA all require pure origin criteria. This means that to be eligible for preferential tax rates, Vietnamese goods must be produced and processed entirely in Vietnam and cannot be imported from a third country.
However, with the UK joining the CPTPP, the origin of goods is allowed to use raw materials from third countries in the same CPTPP region. In the CPTPP bloc, there are many countries with which Vietnam has a trade deficit, such as China and South Korea. This means that if raw materials and components are imported from these countries, they will meet the origin requirements to enjoy incentives.
Although there are additional advantages for Vietnamese goods to increase in the UK, Vietnamese businesses also need to prepare more carefully to enter the competition with many countries also in the CPTPP that have many similar types of goods when exporting to the UK such as China, Australia, New Zealand, etc.
Mr. Luong Hoang Thai - Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) emphasized that another noteworthy point is that along with joining the CPTPP, the UK has officially recognized Vietnam as a market economy. This is very favorable for Vietnam in trade defense investigations, especially anti-dumping investigations. With this recognition, Vietnam's export goods will not be discriminated against and will be subject to more reasonable anti-dumping tax rates than at present.
Source: https://baophapluat.vn/nhieu-loi-the-cho-hang-viet-khi-anh-gia-nhap-cptpp-post515612.html
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