Vietnam an important Southeast Asian partner: UK trade official

While on a trip to Vietnam, Britain’s Trade Commissioner for Asia Pacific, Martin Kent, spoke with Vietnam News about bilateral ties at a time when his country is becoming a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Please tell us about the UK’s accession to the CPTPP and what this means for the country?

The CPTPP is a large free trade area made up of some of the world’s most dynamic and rapidly growing economies across Asia-Pacific and the Americas. With the UK as a member, the bloc will account for 15% of global GDP.

We’re delighted that Singapore, Japan and Chile have formally ratified our accession to the CPTPP. The CPTPP Act also recently received Royal Assent in the UK Parliament – meaning we are one step closer to entry by the end of this year.

The CPTPP is a gateway to the wider Indo-Pacific and Americas regions, bringing new opportunities for British businesses in a region that will account for the majority of global growth and half of the world’s middle-class consumers in the decades to come.

Joining these high standards and this forward-thinking trade bloc enables us to work with Vietnam and other CPTPP members to shape the trading systems of the future, for example in areas like digital trade.

So the CPTPP will give us another opportunity for preferential trade with Vietnam and build on the UK-Vietnam Free Trade Agreement (UKFFTA), which entered into force in 2021.

UK-Vietnam trade has doubled in the past 10 years from £3 billion ($3.8 billion) in 2013 to over £6 billion ($7.6 billion) last year. As a rapidly growing economy in the heart of the Asia-Pacific region with growth of over 5% last year and predicted to grow at roughly 6% this year, we see Vietnam as an important partner and are committed to continuing to grow our trade relationship.

How has the UKVFTA boosted trade between the UK and Vietnam?

The UKVFTA has emerged as a cornerstone for enhancing trade between the United Kingdom and Vietnam, ushering in a new era of economic co-operation and opportunity for both nations. This landmark agreement, which came into effect on January 1, 2021, has already begun to yield tangible benefits, creating a significant boost for bilateral trade through various mechanisms and provisions aimed at fostering greater economic integration and collaboration.

Over the years, bilateral trade has witnessed significant growth and with bilateral commerce hitting all-time highs, Vietnam has become one of the UK's most important Southeast Asian trading partners.

To further capitalize on this momentum, both countries are focusing on promoting trade and investment through enhanced co-operation in key sectors, leveraging digital technology for trade facilitation, fostering closer economic ties through joint initiatives and agreements, and continuously updating and improving the terms of the agreement to adapt to changing economic landscapes. Additionally, efforts to promote awareness of the benefits of the UKVFTA among businesses and stakeholders in both countries would be crucial for maximizing its potential impact.

The ASEAN-UK Economic Integration Programme was launched last April. Could you tell us about its impact on Vietnam and bilateral trade relations?

The £25 million ($32 million) ASEAN-UK Economic Integration Programme launch highlighted our commitment to work together with ASEAN towards a more cohesive regional economy. The program will harness opportunities from the digital economy with a strong focus on women’s economic empowerment and small business development.

We look forward to bringing the best of UK expertise in regulatory reform, financial services, and trade policy to ASEAN for mutual prosperity.

Vietnam is a key market for the UK in ASEAN with rapid economic growth and a liberal trade policy. We want to continue to work closely together to boost trade and economic relations between the UK and Vietnam.

What is the outlook for further strengthening bilateral ties? What are the key factors involved here?

The outlook for further strengthening bilateral ties between the UK and Vietnam appears promising and holds significant potential for growth and collaboration in the coming time.

Several factors contribute to this positive outlook.

Firstly, the UK and Vietnam have complementary economies, with each country possessing strengths in different sectors. Vietnam is known for its competitive manufacturing sector, particularly in textiles, electronics and footwear, while the UK excels in services such as finance and technology and creative industries. This complementarity allows for mutually beneficial trade exchanges, with each country able to supply goods and services that the other demands.

In addition, there is room for further diversification of trade and investment between the UK and Vietnam. While certain sectors such as textiles, electronics and agriculture have traditionally dominated trade, there are opportunities to expand co-operation in emerging sectors such as digital technology, renewable energy, healthcare, and education. By tapping into these new areas of collaboration, both countries can broaden the scope of their economic partnership and unlock new sources of growth.

Furthermore, the existence of the UKVFTA provides a framework for facilitating trade between the two countries. By reducing tariffs, eliminating trade barriers and providing a stable legal environment, these agreements incentivize bilateral trade and investment, creating opportunities for businesses to expand their market access and competitiveness.

As a member of CPTPP, we see Vietnam as an important partner with a rapidly growing economy in the heart of the Asia Pacific region, we are committed to continue to growing our trade relationship by joining this high standards and forward-thinking trade bloc, which enables us to work with Vietnam and other CPTPP members to shape the trading systems of the future, for example in areas like digital trade.

Another factor is that the digital transformation and innovation agenda presents exciting opportunities for enhancing bilateral ties. Both the UK and Vietnam are prioritizing digitization and innovation as key drivers of economic growth and competitiveness. By sharing best practices, fostering collaboration between startups and tech companies and leveraging digital platforms for trade and investment, both countries can accelerate their digital economies and create new avenues for partnership.

As we celebrated the 50th anniversary of Vietnam-UK diplomatic ties last year. Cultural exchanges, educational collaborations, and people-to-people connections continue playing a crucial role in strengthening bilateral ties. Student exchanges, academic partnerships, and cultural events foster mutual understanding and trust between the people of the UK and Vietnam, laying the groundwork for deeper economic and diplomatic co-operation.

Both the UK and Vietnamese governments have implemented policies and initiatives to support bilateral trade and investment. This includes trade missions, business delegations, investment promotion activities, and diplomatic engagements aimed at fostering closer economic co-operation between the two countries. Government support provides businesses with the necessary resources and assistance to explore and seize opportunities in each other's markets.

Overall, the combination of complementary economies, trade agreements, diversification of trade and investment, government support, and cultural connections contributes to the strong trading relationship between the UK and Vietnam. By leveraging these factors and continuing to strengthen their economic partnership, both countries can further enhance bilateral trade and unlock new opportunities for mutual prosperity and growth.