Enterprises exporting Vietnamese goods to the UK need to prepare a suitable roadmap to meet the carbon tax regulations that this country plans to apply to imported goods from the beginning of 2027.
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| Footwear exports to the UK in the first 8 months of 2024 increased by 25% over the same period. |
This information was shared by First Secretary, Ms. Hoang Le Hang, Vietnam Trade Office in the UK (concurrently in Ireland) at the seminar: "Strategy for approaching and building brands in the UK market" organized by the Industry and Trade Newspaper on the morning of October 14.
Vietnamese manufactured goods exported to the UK have grown impressively since the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) came into effect.
The UK is currently Vietnam's third largest export market in Europe after the Netherlands and Germany.
According to the General Department of Customs, in the first 8 months of 2024, Vietnam's exports reached more than 5.05 billion USD, an increase of 23.5%.
Laws on combating deforestation and forest degradation may affect the export of timber, coffee, rubber, vegetable oil, soybeans, etc. The UK government is currently studying the legislative process to establish the Carbon Border Adjustment Mechanism (CBAM), according to which, carbon tax will be applied in the UK from 2027, businesses need to prepare a suitable roadmap for CBAM.First Secretary Hoang Le Hang - Vietnam Trade Office in the UK (concurrently Ireland)
This result is significantly supported by the UKVFTA, which has been in effect for more than 3 years. Thanks to that, Vietnamese goods have more advantages in penetrating a market with a consumption scale of up to 700 billion USD/year.
At the same time, it also demonstrates the competitiveness and proactiveness of Vietnamese enterprises in taking advantage of market space and incentives from the UKVFTA Agreement.
Up to now, many Vietnamese products are gradually dominating the UK market, typically textiles, footwear, consumer electronics, spare parts and many products with growth prospects are health care products, iron, steel...
According to Ms. Phan Thi Thanh Xuan, Vice President of the Vietnam Leather, Footwear and Handbag Association (Lefaso): "Before leaving the EU, the UK was the main export market for the leather and footwear industry. However, in the period 2019-2020, exports decreased slightly, but since then, footwear exports to the UK have increased quite impressively."
As evidence, Ms. Xuan said: "During such a difficult period of the Covid epidemic, the supply chain was also severely affected, but footwear exports to the UK still increased by 6%, especially in 2023 when exports to most markets declined, especially sharply in the EU, the export turnover to the UK still increased quite well, contributing significantly to the export of the whole industry with 28 billion USD (Footwear exports in 2023 reached 765 million USD, an increase of over 40% over the same period, accounting for nearly 13% - PV).
In the first 8 months of 2024, footwear exports to the UK grew by 25%, accounting for nearly 8% of the EU's total export turnover. Ms. Xuan emphasized that the UK is currently a very important market for the footwear industry.
Wood and wood products are also an industry with rapid growth in export turnover to the UK thanks to the UKVFTA. Mr. Ngo Sy Hoai, General Secretary of the Vietnam Timber and Forest Products Association (Viforest) said: "In the first 9 months of 2024, the wood industry exported 165 million USD to the UK, an increase of over 17% over the same period. With the current growth rate, the whole year can export 230 million USD".
The figure of 230 million USD expected to be achieved in 2024, according to Mr. Hoai, is very modest compared to the total export turnover of over 16 billion USD of the whole industry, but plays a very important role, because it accounts for over 40% of the total export turnover of wood and wood products of Vietnam to the EU market.
According to the Ministry of Industry and Trade, with the tariff reduction roadmap of the UKVFTA, Vietnamese goods are gradually gaining a distinct advantage over similar products from other countries that do not have an FTA with the UK such as China, India, Pakistan, Thailand, Malaysia, Indonesia or some South American countries.
In particular, recently, the value of Vietnamese brands has grown positively in the UK market thanks to the recovery of the economy, production, and import and export, bringing very good spreading signals.
However, the current market share of Vietnamese goods in the UK market accounts for less than 1% of the total import volume into the UK. One of the reasons is that the brand recognition of Vietnamese goods in this market is still low, and Vietnam does not have a reputable manufacturing enterprise to participate in this demanding market.
Pointing out the "bottlenecks" that cause Vietnamese goods to still have a small market share in the UK, Mr. Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department (Ministry of Industry and Trade) said: "The key to going the long way and having export products that are highly competitive with goods from other countries is to build a business brand, associated with the national brand."
"Each business must have its own strategy for brand building. I note that outsourcing is fine, but you must determine how long it will take. For example, China is the "factory" of the world, outsourcing everything, but they do so according to a direction and then choose strategic industries to invest in building a national brand," Mr. Khanh emphasized.
Source: https://baodautu.vn/vuong-quoc-anh-ap-thue-carbon-tu-nam-2027-d227405.html
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