The export of Vietnamese goods to the United Kingdom is currently facing several challenges, attributed to both unfavourable international conditions and shifts in the trade and economic policies of the United Kingdom. Overcoming these hurdles will require increased proactive efforts from domestic businesses and regulatory authorities.
Two years into the implementation of the Việt Nam-UK Free Trade Agreement (UKVFTA), bilateral trade between Việt Nam and the UK showed positive results. The total trade exchange reached US$6.8 billion in 2022, up 3.3 per cent growth compared to 2021.
However, due to the global economic downturn and challenges within the UK economy, the import-export volume between Việt Nam and the UK has experienced a downward trend in the early months of 2023. Although recent months have witnessed a slight upward trajectory, Việt Nam’s customs statistics reveal that the accumulated trade volume for the first eight months of 2023 reached $4.62 billion, a marginal 0.9 per cent decrease compared to the same period last year. Việt Nam’s exports to the UK amounted to nearly $4.1 billion, a slight 0.1 per cent decrease, while imports from the UK increased by 6 per cent, reaching $460.1 million.
Nguyễn Cảnh Cường, Trade Counsellor of the Vietnamese Embassy in the UK, said Vietnamese exporters are facing challenges arising from the UK’s intensification of its independent economic policies and the signing of additional free trade agreements (FTAs) with other partners.
Notably, the UK has been negotiating FTAs with India, Mexico, Israel, and the Gulf Cooperation Council (GCC), while also launching FTA talks with Switzerland, its 10th-largest trading partner with a bilateral trade volume of nearly GBP 53 billion.
On 31 May this year, two new FTAs between the UK and Australia and New Zealand also came into force.
Moreover, recent policy changes, such as the UK’s replacement of the Generalised Scheme of Preferences (GSP) with the Developing Countries Trading Scheme (DCTS), effective from 19 June 2023, pose additional challenges for Vietnamese exports. DCTS, being one of the most generous preferential schemes globally, offers duty-free and quota-free trade for Least Developed Countries (LDCs) and 85 per cent of eligible goods for Low and Middle-Income Countries (LMICs).
According to Cường, changes in the UK’s trade policies will make it challenging for Vietnamese exports to compete in the UK market due to strict requirements and regulations, intensifying competition with goods from other countries.
Additionally, the tightening of regulations, the impact of the UK’s anti-deforestation and forest degradation bill on wood and agricultural exports, and the rising popularity of specialised diets (vegan, gluten-free, sugar-free) contribute to the complexity and competitiveness of Vietnamese exports to the UK.
In light of these circumstances, Cường emphasises the importance of supporting businesses in effectively leveraging the UKVFTA. The Việt Nam Trade Office in the UK is actively establishing networks with the British business community and Vietnamese enterprises in the UK to facilitate partnerships. It provides updated information on quality standards, UK import regulations, and actively promotes market opportunities through various channels, including seminars and online workshops.
The trade office is also actively collaborating with the relevant agencies to organise online seminars, facilitate connections with experts and British traders in various sectors, and encourages Vietnamese businesses to participate in exhibitions and trade fairs while actively engaging with UK supermarket systems.
Source: Vietnam News
