U.K., Vietnam Reach Free-Trade Deal as Brexit Deadline Looms
Vietnam and the U.K. concluded a free-trade agreement that will see 99% of tariffs between the two countries eliminated after seven years.
Vietnam will see 114 million pounds ($151 million) in tariff savings on its exports by the time the deal is fully implemented, the two country’s trade ministers said in a joint statement Friday. The U.K. stands to save 36 million pounds on its exports.
The sides had been negotiating the agreement since August 2018, Vietnamese Industry and Trade Minister Tran Tuan Anh said. Vietnam’s trade deal with the EU will no longer apply to the U.K., which is leaving the common market, after Dec. 31, with the new agreement taking effect the following day.
“The U.K. and Vietnam share a strategic commitment to global trade, and the free flow of capital and investments,” the ministers said in the statement. “The bilateral Free Trade Agreement provides vital continuity for our fast-growing and dynamic trading relationship.”
The U.K. is Vietnam’s third-largest trading partner in Europe. The Southeast Asian nation sent around 4.6 billion pounds worth of goods to the U.K. last year, while U.K. businesses sent more than 600 million pounds worth of goods to Vietnam, according to the joint statement.
Bilateral trade was down 15% in the first 10 months of this year amid the coronavirus pandemic, according to a posting on Vietnam’s government’s website.
Friday’s ceremony comes a day after the U.K. signed a similar continuity deal with Singapore.
The deals with Singapore and Vietnam not only lock in billions of pounds’ worth of trade, “they also pave the way for new digital partnerships and joining the Trans-Pacific Partnership,” U.K. International Trade Secretary Liz Truss said in a statement Thursday. “This will play to the U.K.’s strengths, as we become a hub for tech and digital trade with influence far beyond our shores, defining our role in the world for decades to come. ”
Featured image credit: Bloomberg