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In brief

Trade between Vietnam and the United Kingdom will continue to be able to enjoy preferential treatment post-Brexit via the UK-Vietnam Free Trade Agreement (UKVFTA), which is intended to replicate the benefits of the European Union – Vietnam Free Trade Agreement (EVFTA).


In more detail

Vietnam and the UK signed the UKVFTA on 29 December 2020, effectively preserving the UK-Vietnam preferential trading terms available under the EVFTA, which entered into force 1 August 2020. Without the entry into force of the UKVFTA, trade between Vietnam and the UK would have defaulted to non-preferential WTO Most Favored Nation (MFN) terms on 31 December 2020, due to the UK’s exit from the European Union’s single market and customs union following the expiry of the withdrawal transition period.

Specifically, Vietnam and the UK will continue to enjoy preferential trade benefits in the form of the following:

  • Eleven-year phase-out of almost 99% of tariffs, with approximately 65% of tariffs being eliminated in the first year.  Major tariff reductions apply to machinery and appliances, pharmaceutical, car, and food and beverage imports
  • Market access for trade in services between the parties.  Importantly, Vietnam has committed to phasing out the Economic Needs Test (ENT) applicable to secondary and subsequent retail establishments, five years after entry into force of the EVFTA.
  • Provisions on intellectual property, public procurement liberalization, as well as modern transparency, sustainable development and labor terms.

The UK also intends to apply for formal accession to the Comprehensive and Progressive agreement for Trans-Pacific Partnership (CPTPP) in 2021. Vietnam is a member of the CPTPP, along with Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand and Singapore.

Author

Frederick Burke is a member of Baker McKenzie’s Global Policy Committee, comprised of the Firm’s Managing Partners globally, responsible for driving the overall strategy of the Firm. He is also the Managing Partner of our Baker McKenzie offices in Vietnam, more particularly in Hanoi and Ho Chi Minh City. He has more than 30 years’ experience practicing in the areas of corporate law, real estate, international trade and is highly regarded for his work on foreign investment projects in Vietnam and China for key players in property development, trade, IT/C, and project finance, among other areas. Mr. Burke is the go-to advisor for big deals in Vietnam’s flourishing industries including: renewable energy, agribusiness, airlines, hotels, resorts and tourism and large scale infrastructure projects. He is currently the representative of the American Chamber of Commerce in Vietnam to the Prime Minister’s Advisory Council on Administrative Reform in Vietnam and he has been recognized by the Ministry of Justice of Vietnam for his “Outstanding contributions in the field of international legal cooperation”. Mr. Burke is consistently ranked as a Leading Lawyer in Corporate / M&A by leading legal publications in Vietnam (Legal 500 AP 2007-2018; Chambers and Partners AP 2012-2018; IFLR1000 2010-2018).

Author

Thanh Vinh Nguyen is a partner in Baker McKenzie's Ho Chi Minh City office. Prior to joining the Firm, he practiced tax and consultancy work for two international accounting firms and worked as a compliance counsel for an international insurance company. He has co-written Business Operations in Vietnam, published by The Bureau of National Affairs, Inc.

Author

Kevin's practice focuses on international trade compliance. He advises clients on compliance with EU and UK import matters, export controls, trade and economic sanctions, and anti-bribery and corruption issues. Kevin's experience includes advising clients on licensing applications, internal investigations and compliance audits, drafting and submitting voluntary disclosures to UK authorities, and on the development of trade and anti-bribery and corruption compliance programmes. His practice spans a number of industry sectors and includes energy and energy services, defence, aviation, pharmaceuticals and telecommunications.

Author

Rachelle Komarnisky is an Associate in Baker McKenzie Ho Chi Minh City office.