Vietnam and the U.K. concluded a free-trade agreement that will eliminate virtually all tariffs between the two countries by the time it’s fully implemented.
Vietnam will see 114 million pounds ($151 million) in tariff savings from the deal, the British Embassy in Vietnam said in a statement at Friday’s ceremony in Hanoi, while the U.K. stands to save 36 million pounds.
The two sides had been negotiating the agreement since August 2018, Vietnamese 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 deal taking effect the following day.
The U.K. is Vietnam’s third-largest trading partner in Europe. The Southeast Asian nation exported $5.76 billion of goods to the U.K. last year and imported $856.8 million, according to General Department of Vietnam Customs data.
The agreement comes as the countries’ bilateral trade has tripled since 2010, reaching 5.7 billion pounds ($7.6 billion) last year, according to a statement Thursday from the U.K. Home Office. However, that trade had declined 15% in the first 10 months of this year to $4.7 billion amid the coronavirus pandemic, according to a posting on Vietnam’s government’s website.
Friday’s agreement 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,” International Trade Secretary Liz Truss said in Thursday’s statement. “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. ”
