Since Vietnam and the UK announced a strategic partnership in 2010, the bilateral trade exchange has more than tripled, reaching $6.84 billion in 2022.

Nguyen Canh Cuong, Trade counsellor Vietnamese Embassy in the UK

According to figures from the General Department of Vietnam Customs, in 2022 alone, Vietnam’s goods exports to the UK hit more than $6.06 billion, up 5.2 per cent on-year, with Vietnam earning a trade surplus of nearly $5.3 billion – up 7.7 per cent over the previous year.

The key exports items from Vietnam to the UK with a high growth rate included assorted mobile phones and spare parts (18.75 per cent); machinery, equipment, and spare parts (14 per cent), garments and textiles (13.25 per cent); assorted footwear (12.6 per cent); computers, electronics, and spare parts (6.8 per cent); aquatic products (5.2 per cent); and wood and wooden products (3.9 per cent).

In the first quarter of this year, total two-way trade turnover reached $1.58 billion, down 0.6 per cent as compared to the same period last year. Vietnam’s exports were worth more than $1.4 billion – down 0.3 per cent on-year, while Vietnam’s trade surplus hit $1.23 billion – up by $88,600 on-year.

The UK-Vietnam Free Trade Agreement (UKVFTA) has helped two-way trade increase by 3.3 per cent last year as compared to 2021.

The agreement is on route to becoming a highway for businesses to reach the other side’s markets faster and stronger thanks to its extensive tariff reduction roadmap. This agreement creates advantages for many products of both sides to access the other side’s markets such as smartphones, machinery, textiles, footwear, seafood, furniture, iron and steel, coffee, and cashew nuts from Vietnam as well as modern machinery, pharmaceuticals, chemicals, and leather and footwear materials from the UK.

The UK’s service sectors including finance, transport, and retail are also entitled to benefit in Vietnam. What is more, the UKVFTA also sets up an important framework for green development cooperation in the future by the commitments to sustainable development.

When it comes to investment cooperation, the UK is in 15th position among 141 countries and territories with investments in Vietnam. British funds have invested more than $4 billion in about 500 projects focusing on renewable energy, finance, banking, and oil.

At present, Vietnam is accelerating its technological innovation strategy, digital transformation, and supply chain diversification as well as focussing on developing foundation industries and supporting industries to improve the economy’s internal resources, competitiveness, and production efficiency.

Meanwhile, Vietnam’s industries are also making strategic shifts in production and increasing energy efficiency to promote sustainable development, contribute to better environmental protection, and achieve net-zero carbon emissions.

The UK-Vietnam strategic partnership supported by the UKVFTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and intergovernmental cooperation mechanisms such as the Just Energy Transition Partnership will open many new opportunities for businesses to enhance cooperation, beckon investment, and transfer technology in global trending development fields including renewable energy, environmental industry, green trade and financial services, green logistics, digital transformation, and fintech.

The UKVFTA has established a tax-free roadmap for almost all Vietnamese products exported into the UK and vice versa. As a result, many Vietnamese products have a superior competitive advantage in the UK market compared to similar products originating from countries that do not have FTAs with the UK such as China, India, Thailand, Malaysia, and more besides.

The Vietnamese government is committed to setting up a transparent and friendly environment for business and to creating stronger conditions for investors so that they may access resources and opportunities to run their business activities efficiently in Vietnam.

The UK government is meanwhile encouraging British enterprises to do more business with Vietnamese counterparts and supporting them to take part actively in the global production and supply chain.

A number of Vietnamese food and furniture exporters have actively participated in fairs in London, Birmingham, and Northern Ireland thanks to the support of the Vietnam Trade Office in the UK since 2021. They hope to have new customers and gradually expand their market share in the UK.

In 2024, after the UK officially joins the CPTPP, some Vietnamese products with big potential such as fragrant rice, tuna, and honey will be able to increase their market share in the UK thanks to more tax-free quotas.

Vietnam is also likely to be selected by large British businesses as one of the important links when they rearrange their production facilities and restructure their global supply chains in the face of fluctuations in international relations, especially the relationship between major countries.