FTAs - the driving force to promote two-way trade turnover
On November 24 in Hanoi, the Department of European - American Markets (Ministry of Industry and Trade) organized the "Vietnam - UK Business Forum 2023".
The “Vietnam - UK Business Forum 2023” continues to be one of many exciting and substantive activities in a series of events organized by the Joint Committee on Economic and Trade Cooperation between the two countries (JETCO) to celebrate the 50th anniversary of the establishment of diplomatic relations between Vietnam and the United Kingdom of Great Britain and Northern Ireland (1973-2023).
The dual impetus from new-generation FTAs will create more incentives for many groups of UK goods and services in the Vietnamese market, as well as increase investment attraction in each other's localities.
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| Mr. Ta Hoang Linh delivered the opening speech at the "Vietnam - UK Business Forum 2023" |
Opening the Forum, Mr. Ta Hoang Linh - Director of the European - American Market Department said that the event was held after the 13th meeting of the Joint Committee on Economic and Trade Cooperation between the two countries (JETCO13) which had just been very successful under the chairmanship of Deputy Minister of Industry and Trade of Vietnam Phan Thi Thang and Minister of State for Business and Trade of the UK Nigel Huddleston.
The forum is also one of many exciting and substantive activities in the year commemorating the 50th anniversary of the establishment of diplomatic relations between Vietnam and the United Kingdom of Great Britain and Northern Ireland (1973-2023).
Over the past 50 years, the good relationship and cooperation between the two countries have been formed, built and developed in many fields and levels; in which, economic and trade cooperation has always been a bright spot. Currently, the UK is the 9th largest export market in the world and the 4th largest of Vietnam in Europe and America. The relationship and trustful cooperation between the two countries is increasingly going into depth and substance.
Since Vietnam and the UK announced the elevation of their strategic partnership in 2010, according to Vietnam Customs, trade between the two countries has grown more than three times, reaching 6.84 billion USD in 2022.
Mr. Ta Hoang Linh said that the driving force for strong growth in import and export activities between Vietnam and the UK comes from the Vietnam - UK Free Trade Agreement (UKVFTA) which officially took effect from May 1, 2021 and most recently, the UK officially signed an agreement to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in July 2023. " These advantages continue to be the driving force for further development of two-way economic - trade - investment relations in the coming time ," Mr. Ta Hoang Linh emphasized and cited bilateral trade figures between the two countries in the first 10 months of 2023 reaching 5.87 billion USD, an increase of 1.6% over the same period last year.
In the context of Vietnam's trade with most key export markets in the European region witnessing a decline due to geopolitical tensions and general difficulties of the global economy, the fact that the two countries have maintained positive growth momentum is very encouraging.
According to Director Ta Hoang Linh, the export structure between the two sides is complementary. Since the beginning of the year, many of Vietnam's key export items have seen good growth: rubber products (up 66%), electric wires and cables (up 55.5%), telephones of all kinds and components (up 21%), machinery and equipment (up 15.5%)... Along with that, Vietnam has also increased the import of many items from the UK, especially pharmaceuticals and machinery, equipment, tools, and spare parts for production...
Vietnam - a reliable and sustainable investment destination
Considered a dynamic country with a stable political system and an attractive investment environment in the Asia-Pacific region, Vietnam has become a reliable and sustainable investment destination for the UK. As of October 20, 2023, the UK has 550 direct investment projects in Vietnam with a total registered investment capital of about 4.28 billion USD, ranking 15th out of 143 countries and territories with direct investment in Vietnam.
In the first 8 months of 2023, the UK had a total of 43 newly licensed investment projects in Vietnam with a total registered capital of 58.6 million USD. UK investment projects in Vietnam are quite diverse, in the fields of processing and manufacturing industry, renewable energy, industry, environmental treatment, banking and finance, real estate business, retail, education, healthcare, etc. On the contrary, Vietnam currently has 14 investment projects in the UK with a total investment capital of 17.3 million USD.
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| Currently, Vietnam has become a reliable and sustainable investment destination for the UK. |
“ The above figures are still very modest compared to the potential and expectations of investors from both countries ,” Mr. Ta Hoang Linh assessed and said that the UK’s recent official signing of the CPTPP opens up great opportunities for businesses from both countries to take advantage of incentives from this Agreement in the coming time. This is an important event, marking the expansion of the CPTPP Agreement with a new member, reaffirming the attraction, role and position of the Agreement - a high-standard and comprehensive free trade agreement.
“ In the context that the UK is always in the list of the 5 largest import markets in the world, with an attractive level of commitment, along with the existing bilateral FTA, we believe that trade and investment activities between the two countries will continue to grow in the coming time, especially creating conditions for Vietnamese exports to access the market with an annual import turnover of up to 900 billion pounds.
At the same time, the dual momentum from these two new-generation free trade agreements will create more incentives for UK goods and services in the Vietnamese market, as well as increase the room and attraction in the investment sector in each other's localities, " Mr. Ta Hoang Linh believes.
Sharing the same view, Mr. David Johnstone - Head of FTAs Implementation, UK Department of Business and Trade also said that, in addition to the obvious benefits in terms of tariffs, adding many attractive incentives compared to the existing bilateral Agreement, CPTPP also creates great benefits for both countries in integrating more deeply into each other's supply chains. At the same time, it facilitates the business process of enterprises on both sides and creates breakthrough growth potential with the prospect of expanding the Agreement in the future, as well as the two sides can directly participate in the process of establishing new rules and terms of the Agreement.
At the Forum, many speakers said that in the energy sector, Vietnam and the UK continue to show great potential for cooperation in the energy transition in Vietnam; especially after the National Power Development Plan for the 2021-2030 period, with a vision to 2050 (Power Plan VIII) was approved with a large space for renewable energy and the two countries are taking concrete steps in implementing the Just Energy Transition Agreement (JETP).
Within the framework of the Business Forum, two discussion sessions on energy and trade gathered many speakers who are experts, policy makers, researchers, and representatives of typical enterprises of the two countries to share many new perspectives and valuable experiences, as well as to analyze in depth, discuss in a focused and frank manner to seek new cooperation opportunities based on the foundation of currently implemented projects, and to further promote the huge potential between the two sides.
Mr. Ta Hoang Linh affirmed that the Ministry of Industry and Trade will continue to create favorable conditions for businesses and investors, including UK businesses, to realize their ideas and conduct effective production and business activities in Vietnam, contributing to making the economic cooperation relationship between the two countries more substantial and effective.
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