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.