Opening up opportunities to access important export markets

The UK concluded negotiations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on March 31, 2023 and signed the Accession Protocol on July 16, 2023. Along with the Vietnam-UK Free Trade Agreement (UKVFTA), how will the CPTPP affect bilateral trade relations between the two countries?

Ambassador Iain Frew: The agreement reached with the CPTPP is built on the strong relationship between the UK and Vietnam.

The good strategic partnership between the two countries is demonstrated through growing trade relations in recent years. The value of bilateral trade between the UK and Vietnam has doubled, from GBP3 billion (US$3.8 billion) in 2013 to GBP6 billion (US$7.6 billion) in 2023. This is thanks to the UKVFTA.

UK Ambassador to Vietnam Iain Frew. Photo: VGP

When the UK joins the CPTPP, trade between the two countries will have more room to develop. I think that the CPTPP brings many benefits to bilateral trade in a number of areas, especially in the fields of agriculture and digital trade. These are areas where we want to see further growth.

Therefore, we hope that British and Vietnamese businesses will take advantage of the opportunities that the CPTPP brings, and develop our value chains in the linked area in the UK and Vietnam.

What opportunities have bilateral and multilateral free trade agreements brought to Vietnam?

Ambassador Iain Frew: The network of trade agreements and Vietnam's development over the past two decades are directly linked. Vietnam is becoming more prosperous as it opens and trades more with the world. Vietnam currently has a network of 16 trade agreements in effect, and many more are under negotiation. Thanks to that, Vietnam attracts huge foreign investment capital into the economy. Trade is an important part of Vietnam's economy, with a value of twice the gross domestic product (GDP), which is a high figure globally.

Vietnam is clearly an attractive destination for investors thanks to a network of trade agreements, as well as solid investment conditions, and a stable investment environment.

At the same time, these agreements have opened up opportunities to access important export markets for Vietnamese agricultural producers to export to the UK, EU, US, and other markets. This is helping Vietnamese companies and manufacturers reach new markets and sell products to consumer markets that they had not been able to reach before. Therefore, free trade agreements bring great benefits to the Vietnamese economy.

Taking advantage of FTAs

What efforts have the UK and Vietnam made to support the two countries' businesses in overcoming barriers and challenges when implementing the UKVFTA?

Ambassador Iain Frew: The UKVFTA has now been in effect for three years and during that time, we had regular conversations about how to implement, operate and improve this agreement to maximize its benefits. During those discussions, we identify barriers and obstacles that we can overcome together.

As for challenges in certain areas, the two sides are working together to identify them. We hold annual meetings to address each challenge, and establish an executive committee, consisting of many subcommittees, to look at different areas.

The British and Vietnamese authorities had many dialogues. Dialogue with businesses is important. Therefore, we recognize the importance of understanding the challenges businesses face by regularly communicating with them and encouraging them to participate in events. However, some challenges remain in several areas and we still need to work more.

Photo: Savills

What does Vietnam need to do to make the most of the opportunities and advantages that trade agreements bring, as well as promote the early signing of agreements under negotiation?

Ambassador Iain Frew: First of all, Vietnam has an excellent network of trade agreements and as these grow, it is necessary to ensure that both Vietnam and the countries it is working with make the most of these benefits.

We need to ensure that companies understand the benefits and opportunities that trade agreements bring by encouraging businesses to increase coordination with the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry ( VCCI).

Regarding the UKVFTA, we recently conducted a study to consider the implementation of this agreement, the benefits that are being taken advantage of, and the benefits that businesses have not yet taken advantage of.

Through this, we will be able to take full advantage of future trade agreements and set out the next stages of development cooperation.