Along with several achievements in investment cooperation, in recent years, bilateral relations between Vietnam and the UK have experienced high growth, bringing practical benefits for the development of both countries.
Currently, Vietnam ranks 43rd among 235 trade partners of the UK, with bilateral trade accounting for 0.34 percent of the total trade turnover of the UK. Vietnam's main export products to the UK market include mobile phones and electrical equipment, footwear, furniture, machinery and mechanical appliances, coffee, tea and other spices, plastics and plastic products. Meanwhile, Vietnam imports from the UK chemicals, machinery and mechanical appliances, pharmaceuticals, electrical machinery and equipment, steel, optical tools and equipment. In recent years, trade relations between Vietnam and the UK have seen continuous growth. In 2008, two-way exports and imports turnover only reached US$1.15 billion. This figure reached approximately US$2 billion, over US$3 billion and nearly US$3.5 billion in 2010, 2011 and 2012, respectively. In 2012, Vietnam ranked the 34th among 229 countries exporting to the UK and 73rd among 230 countries importing from it, the third largest economy in the Europe. Currently, Vietnam and the UK are trying to raise their two-way trade turnover to US$4 billion in 2013 according to the strategic partnership agreement signed by the two countries in 2010.
Ms Nguyen Thi Hong Thuy, Commercial Counsellor of the Embassy of Vietnam in the United Kingdom and Northern Ireland, said that despite the negative impact of the global economic and financial crisis in recent years, bilateral trade between Vietnam and the UK has been growing strongly with an average increase of over 20 percent a year. Because the economies of the two countries have many similarities, when UK’s businesses promote more of Vietnam’s products, bilateral trade turnover in 2013 will continue to maintain strong growth momentum.
However, it can be seen that even as trade turnover between Vietnam and the UK has seen considerable growth, it, in fact, occupies very modest proportion of the total trade of each country’s. This shows that the competitiveness of Vietnam's products remains low compared with that of other countries' exporting to the UK, especially that of China, Thailand and India. Moreover, Vietnam has yet to fully exploit its potential for agricultural products, which are very promising for the UK market. The main reason is the weakness of processing and post-harvest technologies, resulting in low-quality products and poor variety which make it tough to meet the high demands of the UK market, and the EU market in general. In addition, geographical distance and business traditions are important factors affecting exports of Vietnam.
Ms Thuy said that in fact, many Vietnamese businesses still put priority on developing markets in the Asian area and don’t pay enough attention to the chances this country offers. Besides, structure of Vietnam's exports to the UK concentrates in a few primary commodities. Therefore, if exports is not developed at a more balanced pace, maintaining the current growth rate will be very difficult.
It can be seen that Vietnam and the UK both have large trade potential but have yet to exploit this potential in an efficient manner. To improve bilateral trade turnover has become a common goal of the two countries. On 12 June, at the meeting with Mr Lord Green, UK Minister of State for Trade and Investment, Vietnamese Deputy Minister of Industry and Trade Ho Thi Kim Thoa suggested that the UK promote the implementation of the Memorandum of Understanding of economy and trade between the two countries (JETCO 6) so that JETCO 7 can soon solve existing issues. Besides, Vietnam and the EU signed the Framework Agreement on Partnership and Cooperation (PCA), and start negotiations on a free trade agreement. Therefore, Deputy Minister Ho Thi Kim Thoa expressed her desire that the UK assist Vietnam in the process of negotiating a free trade agreement with the EU. Once a FTA between Vietnam and the EU is signed, many new opportunities will open, contributing to boosting economic relations, trade and investment between Vietnam and the EU in general and the UK in particular.
Hong Hanh
Vietnamese
