CPTPP represents golden chance for Vietnam to achieve greater penetration in UK market

21/07/2023    126

With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) gaining the UK as a new member, more co-operation opportunities will open up for the nation and the European country, according to insiders

Following the signing of the protocol on the UK’s accession to the CPTPP last weekend, the number of CPTPP member states has grown to 12.

The UK's entry is projected to elevate the bloc’s gross domestic product (GDP) to nearly 16% of the world’s total from the previous figure of 12%. The CPTPP will be an additional agreement that runs alongside the Free Trade Agreement (FTAs) that the UK has with most member countries.

According to experts, investment between the UK and CPTPP member states is expected to increased thanks to terms that limit barriers and encourage more internal investment.

As of June, the UK recorded 530 foreign-invested projects worth more than US$4.26 billion in the Vietnamese market, ranking 15th among the 141 countries and territories investing in the country. Last year saw the European nation finance 53 new projects worth US$64.3 million in Vietnam.

After the UK-Vietnam FTA officially took effect on May 1, 2021, last year’s two-way trade grew to US$6.84 billion, up 3.4% on-year. Of the figure, the figure of US$6.07 billion was Vietnamese exports to the UK, up 5.2%, resulting in a trade surplus of roughly US$5.3 billion, higher than the figure of US$4.8 billion recorded in the previous year.

On the back of the UK joining the CPTPP, the two countries are seeing ample opportunities to swiftly achieve the target of reaching US$10 billion in bilateral trade. The Vietnamese agro-aquatic products, including fruits and vegetables, coffee, and cashew nut, are set to benefit the most. Several export items to the UK, which have not been granted tax exemptions based on bilateral agreements, will enjoy more favourable taxes under the terms of the CPTPP.

Meanwhile, products such as whisky and automobiles, which are among 99% of the UK’s current exports to CPTPP countries, will qualify for tax exemptions. At the same time, the UK is likely to export more agricultural products, pharmaceutical materials, advanced equipment, and technology to the Vietnamese market.

Thai Tran, CEO of UK-based TT Meridian Ltd, said Vietnamese farm produce such as durians, pomelos, and Cao Phong oranges have gradually conquered the UK market.

According to him, the UK has high requirements, as it pays attention to both prices and environmental, social, and governance standards.

Source: VOV