Out-Law News | 18 Dec 2020 | 12:32 am | 1 min. read
The UK and Vietnam announced the conclusion of the UK-Vietnam free trade agreement (UKVFTA), which will enter into force on 1 January 2021.
UK secretary of state of international Liz Truss and Vietnam's minister of industry and trade Tran Tuan Anh signed the conclusion of negotiations over the UKVFTA on 11 December in Hanoi, Vietnam.
The deal is based on the terms of the EU-Vietnam free trade agreement (EVFTA). Trade in goods on clothing, footwear, seafood and pharmaceutical products will continue, as well as in financial and e-commerce services.
Companies will be benefit from reduced tariffs on imports and exports. Currently 65% of tariffs are removed tariff on UK-Vietnam trade, but this will increase to 99% of tariffs over time. This is anticipated to deliver annual savings to Vietnam of £114 million on exports to UK and £36m on UK exports to Vietnam.
Trade expert Dr. Totis Kotsonis of Pinsent Masons, the law firm behind Out-Law, said: "The agreement provides for the elimination of 99% of tariffs after seven years. Like with the UK-Singapore free trade agreement, while this agreement is also a 'continuity agreement' based, as it is, on the existing EU-Vietnam free trade agreement, the UK sees its bilateral agreement with Asian countries as merely the first stepping stone towards much greater UK involvement in Asia, ultimately joining the Trans-Pacific trade agreement (CPTTP) and becoming an ASEAN Dialogue Partner, which, among other things, would enable the UK to attend ASEAN summits and ministerial meetings."
"In many respects therefore, these deals, important as they are, should not be seen as merely ends in themselves, but rather as the basis for a much more active strategic UK engagement in the wider Asia-Pacific region," he said.