UK’s CPTPP membership boosts bilateral trade

The manufacturing-processing industry has become the biggest attractor of the UK’s investment

Since Vietnam and the UK reached a strategic partnership in 2010, economic, trade and investment relations have become highlights in the bilateral cooperation. The UK has become the ninth largest importer of goods in the world and the fourth biggest European and American importer of Vietnamese goods.

In 2022 – the second year of the UKVFTA implementation, the bilateral trade reached US$6.8 billion, an increase of 3.3 percent over 2021, including Vietnam's exports worth US$6.1 billion (up 5.2 percent) and the UK’s exports worth US$771 million (down 9.8 percent).

The Vietnam Trade Office in the UK said the UK's accession to the CPTPP would create a positive psychological effect on UK consumers and distributors who are expected to be more interested in products from CPTPP countries, including Vietnam.

Economist Nguyen Minh Phong told Vietnam Economic News that this is a good sign and will encourage other countries to join CPTPP. The UK’s CPTPP membership will create favorable conditions for member countries to export to the UK and contribute to strengthening the brand of CPTPP, including Vietnam. It will also help strengthen Vietnam's position if the country implements the UKVFTA efficiently. In particular, it will reduce strict regulations and inspections and increase the reputation of Vietnamese goods in other foreign markets.

However, Vietnamese enterprises’ rate of taking advantage of incentives of the UKVFTA is only about 24 percent, while their market share in the UK remains modest. Phong attributed this to the fact that the number of Vietnamese product brands in the UK remains small and the quality of Vietnamese goods needs to be improved to meet the UK's import standards. Vietnamese businesses haven’t paid due attention to updating them on and meeting the UK’s standards, which is crucial for them to diversify lists of exports and expand market shares in the UK, he said.

Vietnamese businesses need to ensure stable product standards and well organize their supply chains. According to agricultural expert Hoang Trong Thuy, the State should support businesses in production and export through the adoption of appropriate laws and policies, including those on intellectual property, prepare adequate, convenient transport infrastructure in raw material growing areas, facilitate businesses’ access to credit, data construction and innovation, encourage enterprises to shift from quantity-based to quality-based development and pursue satisfaction of international standards. Meanwhile, businesses need to develop partnership with traditional and large satellite partners to learn about market and consumer needs, he said.

Vietnam’s representative agencies and trade offices overseas, including the Vietnam Trade Office in the UK, need to update Vietnamese businesses on the latest foreign market and consumer information, and provide timely market forecasts to help enterprises develop appropriate business strategies. It is necessary to support Vietnamese businesses to export to and protect their brands in the UK, Thuy said.