Vietnam's CBAM Goods Export Situation to the UK
The United Kingdom is one of Vietnam's traditional export partners in Europe. According to ITC Trademap, in 2023, Vietnam's exports to the UK reached over US$9.22 billion, a 3.3% increase compared to 2022, and accounting for over 2% of Vietnam's total export turnover to the world.
With the UK-Vietnam Free Trade Agreement (UKVFTA) effective from January 1, 2024, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), of which the UK is a new member, expected to take effect from the end of 2024, the outlook for Vietnam's goods exports to the UK is also very bright. Also, according to ITC Trademap, during the 2020-2023 period, Vietnam's exports experienced relatively good growth in the UK market, with an average annual growth rate of 13.47% during this period.
Table 1: Export turnover of Vietnam's top 10 products to the UK market
Unit: 1,000$ US
|
Product (HS Chapter) |
Export Turnover 2021 |
Export Turnover 2022 |
Export Turnover 2021 |
|
Electrical machinery and equipment (HS 85) |
2,417,658 |
2,737,624 |
3,615,002 |
|
Footwear (HS 64) |
498,673 |
1,442,129 |
1,372,252 |
|
Machinery and mechanical appliances (HS 84) |
367,296 |
584,273 |
709,382 |
|
Non-knitted or crocheted garments (HS 62) |
254,724 |
606,700 |
519,668 |
|
Non-knitted or crocheted garments (HS 61) |
207,055 |
583,711 |
500,728 |
|
Furniture (HS 94) |
459,004 |
473,314 |
273,703 |
|
Toys, games, sports requisites (HS 95) |
160,391 |
262,768 |
238,357 |
|
Plastics and articles thereof (HS 39) |
188,009 |
195,728 |
182,746 |
|
Iron and steel (HS 72) |
352,683 |
250,189 |
177,498 |
|
Fish, crustaceans, molluscs (HS 03) |
183,712 |
176,356 |
169,953 |
|
Total Exports to UK Market |
6,285,574 |
8,927,517 |
9,224,810 |
Source: ITC Trademap accessed on October 21, 2024
For the 7 groups of goods expected to be subject to the UK's CBAM adjustments, Vietnam's exports to the UK are still relatively modest. However, with the relatively optimistic growth rate of export turnover of some products to the UK market, especially iron and steel (reaching 76%/year during the 2019-2023 period, more than 5 times higher than the export turnover growth of all products), the UK market is assessed as having much potential for these products in the future. Therefore, meeting the UK market's import standards and regulations, especially future CBAM requirements, will be an important condition for ensuring sustainable market access for these product groups in this market.
Table 2: Export turnover of CBAM product groups from Vietnam to the UK market
Unit: 1,000$ US
|
Commodity |
Exports to UK 2023 |
Average Export Growth 2019-2023 |
Total Exports to World 2023 |
UK/World Export Ratio (2023)) |
|
Iron and steel (HS 72) |
177.498 |
76% |
7.819.387 |
2,27% |
|
Ceramics (HS 69) |
27.667 |
4% |
742.166 |
3,73% |
|
Aluminum (HS 76) |
7.064 |
-1% |
1.970.269 |
0,36% |
|
Cement (HS 6810) |
6.357 |
-9% |
557.116 |
1,14% |
|
Glass (HS 70) |
3.858 |
8% |
952.010 |
0,41% |
|
Fertilizers (HS 31) |
38 |
-8% |
589.055 |
0,006% |
Source: ITC Trademap accessed on October 21, 2024
Source: Center for WTO and International Trade - VCCI