MINISTRY OF EDUCATION AND TRAINING

NATIONAL ECONOMICS UNIVERSITY

----------

INTERNATIONAL ECONOMICS
Lecturer: Tran Hoang Ha

TOPIC: EVFTA AND UKVFTA

Participants: Le Anh Vu - 11226951

Pham Chau Anh - 11220521
Nguyen Ngoc Linh - 11223603
Bui Thi Minh Phuong - 11225160
Cap Thi Thanh Hang - 11222066
Nguyen Duc Manh - 11224124

Class: International Business Administration 64B

School of Advanced Education Programs (AEP)
 MINISTRY OF EDUCATION AND TRAINING
NATIONAL ECONOMICS UNIVERSITY

----------

INTERNATIONAL ECONOMICS
Lecturer: Tran Hoang Ha

TOPIC: EVFTA AND UKVFTA

Participants: Le Anh Vu - 11226951

Pham Chau Anh - 11220521
Nguyen Ngoc Linh - 11223603
Bui Thi Minh Phuong - 11225160
Cap Thi Thanh Hang - 11222066
Nguyen Duc Manh - 11224124

Class: International Business Administration 64B

School of Advanced Education Programs (AEP)
 TABLE OF CONTENTS

ABSTRACT.......................................................................................................1

I. EVFTA............................................................................................................2
1. Circumstances Leading to Formation..........................................................2
2. Content.........................................................................................................5
2.1.Trade in Goods.......................................................................................5
2.2.Trade in Services and Investment...........................................................5
2.3.Government Procurement.......................................................................6
2.4.Intellectual Property................................................................................6
2.5.State-Owned Enterprises and Subsidies.................................................7
2.6.Trade and Sustainable Development......................................................7
2.7.Dispute Settlement Mechanism..............................................................8
3. Influences.....................................................................................................8
3.1.Influence on Vietnam..............................................................................8
3.2.Influence on the European Union...........................................................9
3.3.Broader Economic and Political Impact...............................................10
4. Opportunities..............................................................................................11
4.1. Enhanced Market Access and Export Growth.....................................11
4.2. Attraction of Foreign Direct Investment (FDI)....................................12
4.3. Diversification of Supply Chains.........................................................13
5. Challenges..................................................................................................14

II. UKVFTA.....................................................................................................17
1. Circumstances Leading to the Formation..................................................17
2. Content.......................................................................................................17
2.1. Trade in Goods....................................................................................18
2.2. Trade, Investment and Services, Government Procurement, Intellectual
Property, Rules of Conduct.........................................................................18
3. Influences...................................................................................................18
3.1. Influence on United Kingdom.............................................................18
3.2. Influence on Vietnam...........................................................................19
4. Opportunities..............................................................................................20
5. Challenges..................................................................................................22
5.1. For the UK...........................................................................................22
5.2. For Vietnam.........................................................................................22
III. EVFTA AND UKVFTA...........................................................................26
1. Similarities.................................................................................................26
2. Key Differences.........................................................................................27

IV. IMPLEMENTATION STATUS..............................................................31

1. EVFTA.......................................................................................................31
2. UKVFTA....................................................................................................33

V. CONCLUSION...........................................................................................36

REFERENCES................................................................................................37
 ABSTRACT
Trade deals shape economies, and the UK - Vietnam Free Trade Agreement
(UKVFTA) and the EU - Vietnam Free Trade Agreement (EVFTA) are game-
changers. The EVFTA opens Europe’s market to Vietnam with lower tariffs
and stronger investment ties. After Brexit, the UKFTA kept flowing while
creating new opportunities.
This report provides an in-depth analysis of the EVFTA and the UKVFTA,
examining their economic, regulatory, and strategic implications for Vietnam.
It explores how these agreements have boosted Vietnam’s exports, particularly
in key sectors such as agriculture, seafood, and manufacturing, by eliminating
or reducing tariffs and improving market access. The report also highlights the
role of these FTAs in strengthening intellectual property protections, enhancing
digital trade provisions, and fostering greater foreign investment. Furthermore,
it discusses how compliance with these agreements has accelerated Vietnam’s
domestic reforms, particularly in labor laws and environmental standards,
aligning the country with European expectations. As implementation
progresses, these trade agreements are not only expanding Vietnam’s economic
opportunities but also reinforcing its position as a crucial manufacturing and
export hub, strengthening its role in global supply chains and deepening its
trade ties with Europe.

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I. EVFTA
The European Union-Vietnam Free Trade Agreement (EVFTA) is a
comprehensive trade pact between Vietnam and the 27 European Union
member states, aimed at reducing and eventually eliminating tariffs,
improving market access, and enhancing economic cooperation between the
two parties.
1. Circumstances Leading to Formation
 Vietnam’s Economic Transformation and the Need for Deeper
Trade Integration
Vietnam’s transition from a centrally planned economy to a market-
oriented one played a crucial role in setting the stage for the EVFTA.
Since the Đổi Mới (Renovation) economic reforms of 1986, Vietnam
had achieved rapid economic growth, largely driven by export-oriented
manufacturing. However, by the early 2010s, Vietnam faced challenges
related to sustaining its growth momentum. Rising labor costs,
increasing competition from neighboring economies like Cambodia and
Bangladesh, and concerns over industrial productivity necessitated
deeper integration into global trade networks. The EVFTA emerged as a
solution that could help Vietnam solidify its position in global supply
chains, ensuring continued access to high-value markets.
Additionally, Vietnam’s reliance on preferential trade schemes, such
as the EU’s Generalized System of Preferences (GSP), was a temporary
arrangement subject to unilateral revisions by the EU. With Vietnam’s
economic development progressing, it was expected to graduate from
GSP benefits. The EVFTA provided a long-term, legally binding trade
framework that could guarantee stability in Vietnam’s export access to
the EU.
 Vietnam’s Need for Institutional and Regulatory Upgrades
As Vietnam’s economy grew, its regulatory framework needed
significant modernization to meet the standards of high-income
economies. The EVFTA negotiations provided a structured pathway for

2
Vietnam to implement legal and institutional reforms in key areas such
as labor rights, environmental sustainability, intellectual property
protection, and competition policy.
The EU, known for its high regulatory standards, required Vietnam
to make substantial commitments in these areas. By aligning its
regulations with EU norms, Vietnam not only secured market access but
also positioned itself as a reliable and attractive destination for foreign
investment. This reform-driven approach was essential in preparing
Vietnam for a more competitive global economy.
 The Influence of Regional Trade Agreements on Vietnam’s
Strategy
The successful negotiation of other high-standard trade agreements,
such as the Comprehensive and Progressive Agreement for Trans-
Pacific Partnership (CPTPP), influenced the circumstances leading to
the EVFTA. Vietnam’s participation in CPTPP demonstrated its
commitment to economic liberalization and adherence to international
trade standards, which strengthened its credibility as a trade partner for
the EU.
At the same time, Vietnam had already benefited from ASEAN’s free
trade agreements with major economies like China, Japan, and South
Korea. However, these agreements were primarily focused on Asia-
Pacific trade and did not provide direct access to the EU market. The
EVFTA complemented Vietnam’s existing trade agreements by
expanding its reach into one of the world’s largest consumer markets.
 The EU’s Shift Toward Bilateral and Regional Trade
Agreements
The EU’s approach to trade negotiations underwent significant shifts
in the early 2000s. Historically, the EU had prioritized multilateral trade
agreements through the World Trade Organization (WTO). However,
the stagnation of the WTO Doha Round negotiations and the slow

3
progress in achieving comprehensive global trade liberalization led the
EU to pursue bilateral and regional trade agreements instead.
Vietnam became a key target for the EU’s trade expansion in Asia, as
the EU aimed to strengthen economic ties with emerging markets. The
EU had already signed free trade agreements with South Korea, Japan,
and Singapore, and Vietnam was seen as a strategic partner within the
Association of Southeast Asian Nations (ASEAN). The EVFTA was
part of a broader EU strategy to enhance trade engagement with
ASEAN, especially after negotiations for an EU-ASEAN region-wide
FTA stalled due to the diverse economic structures and policy
differences among ASEAN members.
 The Changing Landscape of Global Supply Chains
By the late 2010s, shifts in global supply chains further contributed
to the formation of the EVFTA. Rising production costs in China,
coupled with trade tensions between the U.S. and China, prompted
multinational corporations to diversify their manufacturing bases.
Vietnam emerged as a top alternative for companies seeking to relocate
production to maintain cost efficiency and reduce geopolitical risks.
The EVFTA provided additional incentives for European firms to
invest in Vietnam as a regional manufacturing hub. The agreement’s
trade facilitation measures, such as reduced tariffs and streamlined
customs procedures, made Vietnam an even more attractive destination
for European businesses looking to establish production bases for both
Asian and global markets.
 Global Economic Uncertainty and the Need for Trade
Diversification
The years leading up to the EVFTA were marked by global economic
uncertainties, including the lingering effects of the 2008-2009 financial
crisis and the increasing unpredictability of international trade policies.
Countries around the world sought to hedge against risks by diversifying
their trade relationships.

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 For Vietnam, excessive reliance on the Chinese and American
markets posed potential risks, particularly considering rising
protectionism and trade disputes. Expanding trade with the EU provided
a strategic counterbalance, reducing Vietnam’s vulnerability to external
economic shocks.
Similarly, for the EU, trade diversification was a key priority. With
growing uncertainties surrounding its trade relations with the United
States and the United Kingdom (due to Brexit negotiations), the EU
sought to strengthen economic ties with dynamic and fast-growing
markets like Vietnam. The EVFTA was part of the EU’s broader effort
to solidify trade partnerships beyond its traditional allies.

2. Content
The EVFTA is structured into 17 chapters, 2 protocols, and several
memorandums of understanding, encompassing a wide range of areas.
2.1. Trade in Goods
The EVFTA aims to eliminate tariffs on nearly all goods traded
between Vietnam and the EU. Upon entry into force, the EU removed
approximately 85% of its tariffs on Vietnamese goods, with the
remaining tariffs to be phased out over seven years. Conversely,
Vietnam eliminated about 48.5% of its tariffs on EU goods immediately,
with a roadmap to remove almost all tariffs over ten years. This
asymmetrical approach acknowledges Vietnam's developing economy,
providing it with a longer adjustment period. Key Vietnamese exports
such as textiles, footwear, and agricultural products benefit significantly
from enhanced market access, while EU exporters gain improved access
for products like machinery, pharmaceuticals, and dairy.

2.2. Trade in Services and Investment

The agreement liberalizes various service sectors, allowing EU
companies greater access to Vietnam's market and vice versa. Vietnam

5
has committed to higher standards of openness in sectors like finance,
telecommunications, and transportation, surpassing its commitments
under the World Trade Organization (WTO). For instance, in the
banking sector, Vietnam permits EU credit institutions to acquire up to
49% ownership in certain Vietnamese banks, a notable increase from
previous limits. Additionally, the EVFTA establishes a robust legal
framework for investment protection, including provisions on fair
treatment, protection against expropriation without compensation, and
free transfer of capital. These measures aim to create a stable and
predictable investment environment, encouraging foreign direct
investment flows between the two regions.

2.3. Government Procurement

The EVFTA includes commitments to ensure transparency and non-
discrimination in government procurement processes. Vietnam has
agreed to adhere to principles that allow EU businesses to compete for
public contracts on equal footing with domestic firms. This includes
access to procurement by central government entities, state-owned
enterprises, and certain public utilities. The agreement specifies
thresholds above, which procurement procedures must be open to EU
bidders and outlines detailed procedural rules to ensure fairness and
transparency. By opening government procurement, EVFTA aims to
enhance competition, improve the quality of public services, and provide
better value for taxpayers.

2.4. Intellectual Property

The EVFTA strengthens the protection and enforcement of
intellectual property rights (IPR), aligning Vietnam's standards more
closely with those of the EU. This includes enhanced protections for
trademarks, patents, copyrights, and geographical indications (GIs).
Notably, Vietnam has agreed to recognize and protect over 160 EU GIs,

6
such as Champagne, Parmigiano Reggiano, and Roquefort, ensuring that
only products genuinely originating from these regions can use these
names. This protection extends to Vietnamese GIs as well, with the EU
recognizing prominent Vietnamese products like Phu Quoc fish sauce
and Buon Ma Thuot coffee. Strengthening IPR protections encourages
innovation, attracts investment, and ensures consumers receive
authentic, high-quality products.

2.5. State-Owned Enterprises and Subsidies

The agreement addresses the role of state-owned enterprises (SOEs)
and subsidies to ensure a level playing field in trade relations. Both
parties commit to ensuring that SOEs operate in accordance with
commercial considerations and that any advantages granted do not
distort competition. The EVFTA includes provisions that require
transparency in the operations of SOEs and the reporting of subsidies,
aiming to prevent practices that could unfairly advantage domestic
companies over foreign competitors. These commitments are designed
to promote fair competition and market efficiency, benefiting both
consumers and businesses.

2.6. Trade and Sustainable Development

The EVFTA incorporates comprehensive commitments to promote
sustainable development, covering labor rights and environmental
protection. Both parties have committed to implementing international
labor standards as outlined by the International Labour Organization
(ILO), including the freedom of association and the elimination of
forced and child labor. Environmentally, the EVFTA includes
provisions to uphold existing international environmental agreements,
promote biodiversity, and combat illegal logging and trade in
endangered species. These commitments are enforceable through a
dedicated dispute resolution mechanism, emphasizing the importance of

7
 balancing economic growth with social and environmental
responsibility.

2.7. Dispute Settlement Mechanism

To ensure effective implementation and compliance, the EVFTA
establishes a structured dispute settlement mechanism. This system is
designed to resolve disputes amicably through consultations and
mediation. If these efforts fail, an independent arbitration panel can be
convened to make binding decisions. The mechanism covers disputes
arising from the interpretation and application of the agreement's
provisions, providing a clear and predictable process for addressing
conflicts. This framework enhances the stability and reliability of the
trade relationship, giving businesses and investors greater confidence in
the agreement's enforcement.

3. Influences
3.1. Influence on Vietnam
 Boost to Export Growth and Market Expansion
One of the most significant benefits of the EVFTA for Vietnam is
improved market access to the EU, one of the world's largest economic
blocs. Under the agreement, 99% of tariffs on Vietnamese exports to the
EU will be eliminated over time, with many key sectors benefiting
immediately. Vietnamese products, such as textiles, footwear, seafood,
and agricultural goods (e.g., coffee, rice, and fruits), now enjoy
preferential treatment, giving them a competitive edge over exports from
other countries that lack similar agreements with the EU. This has led to
higher export volumes, increased foreign exchange earnings, and greater
economic diversification.
 Attracting Foreign Direct Investment (FDI)
The EVFTA enhances Vietnam’s attractiveness as an investment
destination, particularly for European companies looking to diversify

8
their supply chains. With the trade agreement in place, Vietnam has
positioned itself as a stable and strategic hub in the ASEAN region for
EU businesses. The elimination of tariffs, stronger intellectual property
protections, and regulatory improvements encourage European firms to
set up manufacturing and sourcing operations in Vietnam. Sectors such
as automobile manufacturing, pharmaceuticals, and high-tech industries
have seen increased investment as a result.
 Industrial and Regulatory Upgrades
To comply with EVFTA standards, Vietnam has undertaken
extensive reforms in labor rights, environmental protection, and
corporate governance. The agreement requires Vietnam to improve
working conditions, adopt international labor standards, and strengthen
sustainability practices in industries like fishing, forestry, and
agriculture. These reforms not only enhance Vietnam’s global reputation
but also facilitate its integration into higher-value supply chains.
However, Vietnamese businesses must also adapt to stricter EU
regulations on product quality, sustainability, and intellectual property
protection.

3.2. Influence on the European Union

 Enhanced Market Access for EU Exports
The EVFTA provides European businesses with greater access to
Vietnam’s growing consumer market, which has a population of nearly
100 million people with increasing purchasing power. The deal
eliminates 65% of tariffs on EU exports to Vietnam immediately,
with the remainder being phased out over the next decade. This benefits
key EU industries, such as automobiles, machinery, food and beverage,
and pharmaceuticals. European companies now have a competitive
advantage in Vietnam compared to exporters from non-EVFTA
countries.
 Increased Opportunities for EU Investors

9
 Vietnam's commitment to transparent investment regulations and
improved legal frameworks under the EVFTA has created a more
favorable environment for European investors. The agreement includes
investment protection provisions, ensuring that European companies
operate under fair and predictable conditions. This has encouraged more
EU investments in manufacturing, renewable energy, financial services,
and infrastructure projects in Vietnam.
 Strengthening the EU’s Strategic Presence in Asia
Through the EVFTA, the EU has strengthened its economic
influence in the ASEAN region, reinforcing its position as a key trade
partner in Asia. The agreement helps the EU diversify its supply chains
and reduce overreliance in China for manufacturing. Vietnam, as one of
the fastest-growing economies in ASEAN, provides the EU with an
alternative production hub and a gateway to other Asian markets.
 Ensuring Compliance with High Standards
EVFTA upholds strict labor, environmental, and intellectual property
standards, ensuring that EU businesses operate in a legally protected
environment. The agreement mandates Vietnam to adopt stronger
corporate governance rules, labor rights, and sustainable development
practices. This aligns with the EU’s commitment to fair trade and ethical
business practices, ensuring that European firms engage in responsible
and sustainable trade.

3.3. Broader Economic and Political Impact

 Strengthening Bilateral Trade and Cooperation
The EVFTA serves as a foundation for deeper economic cooperation
between Vietnam and the EU, paving the way for future partnerships in
technology transfer, education, research, and innovation. As trade and
investment flows grow, both sides benefit from stronger diplomatic and
political ties, reinforcing Vietnam’s status as a strategic partner of the
EU in Asia.

10
  Diversifying Supply Chains Amid Global Uncertainty
The EVFTA helps both Vietnam and the EU reduce trade
dependencies on other global players, particularly in the context of
rising protectionism, trade tensions, and supply chain disruptions. The
agreement provides a stable and diversified trade framework, ensuring
resilience in global trade.
 Potential Challenges in Implementation
Despite the many advantages, implementing the EVFTA requires
continuous efforts from both sides. Vietnam must ensure compliance
with EU standards, while European businesses must navigate Vietnam’s
evolving regulatory landscape. Moreover, geopolitical and economic
fluctuations, such as currency exchange rates, inflation, and global
economic downturns, may impact the agreement's full potential.

4. Opportunities
4.1. Enhanced Market Access and Export Growth
4.1.1. For Vietnam
The EVFTA has substantially improved Vietnam's access to the
EU market, leading to notable export growth. In 2023, Vietnam's
export turnover to the EU reached approximately $43.5 billion,
marking a 21% increase compared to the same period in the previous
year. Notably, exports of iron and steel surged by 739%, cameras,
camcorders, and components by 260%, and machinery and
equipment by 82.3%. This surge is attributed to the elimination of
tariffs on key Vietnamese products such as electronics, textiles,
footwear, agriculture, and seafood.
4.1.2. For the EU
European exporters have gained significantly better access to
Vietnam’s dynamic market due to the EVFTA’s progressive tariff
reductions. Upon the agreement’s implementation, 48.5% of
Vietnamese tariff lines were immediately eliminated, covering

11
 64.5% of EU export value to Vietnam. Over a seven-year period,
91.8% of tariff lines (97.1% of EU export turnover) will be tariff-
free, with full elimination of 99.8% of tariffs within ten years
(Deloitte, 2024).
This reduction has particularly benefitted key EU export sectors.
Machinery and appliances, previously subject to import duties of up
to 35%, saw immediate tariff elimination upon EVFTA’s activation.
The pharmaceutical sector, which faced Vietnamese import tariffs of
up to 8%, now enjoys duty-free access for 50% of its exports, with
full elimination expected by 2027 (European Commission, 2024).
Similarly, automotive tariffs, which stood at 78% for cars, 75% for
motorcycles (over 150cc), and 32% for auto parts, will be phased out
entirely by 2030 and 2027, respectively (Bureau Veritas, 2024).
This trade liberalization has strengthened the EU’s economic
presence in Southeast Asia, making European goods more
competitive in Vietnam’s growing consumer market while offering
businesses a strong foothold in regional supply chains.

4.2. Attraction of Foreign Direct Investment (FDI)

4.2.1. For Vietnam
The EVFTA has significantly increased European investment in
Vietnam, making the country a more attractive destination for
foreign direct investment (FDI) due to its commitment to a
transparent and predictable investment environment. Since the
agreement’s implementation in August 2020, European FDI in
Vietnam has experienced steady growth. As of July 2024, EU
investors have committed over $27 billion in 2,400 projects,
focusing on key industries such as renewable energy, high-tech
manufacturing, finance, and telecommunications (Vietnam Ministry
of Planning and Investment, 2024).

12
 Vietnam’s key export industries, including textiles, footwear, and
electronics, have seen substantial benefits. For example, in 2023
alone, Vietnamese exports to the EU reached $50.3 billion, marking
a 15% increase compared to 2019 (pre-EVFTA period). The textile
and garment sector, which previously faced EU tariffs of 12%, now
enjoys zero tariffs for 77% of exports, leading to a 20% surge in EU-
bound textile shipments (Vietnam Customs, 2024).
Additionally, the EVFTA has facilitated greater access to
European equipment, technology, and advanced techniques, helping
Vietnam upgrade its production capabilities. European enterprises,
particularly from Germany, France, and the Netherlands, have
expanded operations in high-tech manufacturing and renewable
energy, with wind and solar power projects receiving over $3.5
billion in new EU investments in 2023 alone (European Chamber of
Commerce in Vietnam, 2024).
This investment diversification is helping Vietnam transition to a
more sustainable and high-value economy, leveraging EU expertise
in areas such as green energy, digital transformation, and financial
services.
4.2.2. For the EU
European companies benefit from expanded investment
opportunities in Vietnam, leveraging the country's strategic location
within ASEAN to access broader regional markets. The agreement's
provisions on investment protection and dispute resolution further
enhance the confidence of EU investors.

4.3. Diversification of Supply Chains

The EVFTA enables both Vietnam and the EU to diversify their
supply chains, reducing reliance on traditional trading partners and
enhancing economic resilience. For instance, European firms can

13
 mitigate risks associated with over-dependence on other Asian markets
by increasing their engagement with Vietnam.

5. Challenges
 Intensified Market Competition
The EVFTA’s intensified market competition requires Vietnamese
manufacturers to upgrade technology and improve productivity to
compete with high-quality European goods. Many local firms still rely
on outdated machinery and low-cost labor, which puts them at a
disadvantage against EU manufacturers that operate with advanced
automation and innovation-driven production processes. Without
modernization, Vietnamese enterprises risk losing their domestic and
export market share to European firms with superior quality control,
efficiency, and economies of scale.
Additionally, Vietnamese companies may struggle to compete on
both price and quality. While Vietnam traditionally has a cost advantage
due to lower wages, EU products often benefit from higher production
efficiency, established brand reputation, and stringent quality assurance
standards. Sectors such as automotive, pharmaceuticals, and high-end
consumer goods could see EU imports gaining ground, challenging
domestic producers that lack the same level of technological
sophistication and global credibility.
 Implementation and Administrative Hurdles
For Vietnam, aligning domestic policies with EU regulatory
frameworks requires comprehensive institutional reforms, particularly in
areas such as customs procedures, intellectual property rights
enforcement, and technical standards compliance. Many small and
medium-sized enterprises (SMEs) in Vietnam struggle to navigate these
complex regulations, limiting their ability to fully utilize the agreement’s
benefits.

14
 A major administrative hurdle is Vietnam’s complex and often
inefficient customs system. Although the EVFTA mandates streamlined
customs procedures, delays in cargo clearance, inconsistent enforcement
of rules, and corruption risks still pose significant barriers to trade.
According to a 2023 report by the Vietnam Chamber of Commerce and
Industry (VCCI), 30% of businesses cited complicated customs
procedures as a major obstacle to maximizing EVFTA benefits. The lack
of digitalized and automated customs systems further slows trade flows,
making it difficult for companies, especially exporters, to meet tight
delivery schedules required by European buyers.
Furthermore, EU regulations impose high standards on product
quality, environmental protection, and labor rights, which many
Vietnamese businesses lack the resources or expertise to comply with.
For example, the EU’s strict sanitary and phytosanitary (SPS) measures
require agricultural exports to meet stringent food safety and traceability
standards. In 2022, over 15% of Vietnam’s seafood exports to the EU
faced rejections due to non-compliance with SPS regulations, leading to
financial losses for exporters. Similar challenges arise in
pharmaceuticals, textiles, and electronics, where companies must adhere
to technical barriers to trade (TBT), such as eco-labeling and
sustainability requirements.
On the European side, businesses also encounter administrative
difficulties when operating in Vietnam. Despite commitments to greater
market openness, inconsistent policy enforcement, lack of transparency
in public procurement, and complicated licensing procedures remain
concerns. According to the European Chamber of Commerce in Vietnam
(EuroCham) Business Climate Index, in 2023, 45% of EU businesses
operating in Vietnam expressed frustration over regulatory
unpredictability and unclear investment procedures. The slow adoption
of international best practices in dispute resolution further discourages
EU investors from entering Vietnam’s market.

15
 Impact on Domestic Industries
The EVFTA's tariff reductions make European goods more affordable
in Vietnam, leading to a surge in imports, particularly in high-tech
machinery, pharmaceuticals, and luxury consumer products—sectors
where Vietnam's domestic industries struggle to compete. This influx of
EU imports could widen Vietnam’s trade deficit, as local producers face
challenges in matching the quality, technology, and branding strength of
European firms. For example, Vietnam imported over €14 billion worth
of goods from the EU in 2023, a significant portion of which were high-
value products like medical equipment and automobiles. Without
adequate government support and industrial upgrading, some domestic
businesses may lose market share, deepening Vietnam’s reliance on
imported goods and straining trade balance sustainability.

16
II. UKVFTA
1. Circumstances Leading to the Formation
The UK-Vietnam Free Trade Agreement (UKVFTA) was swiftly brought
into effect to ensure continuity of trade relations following the UK's
departure from the European Union. Signed on December 29, 2020, it
provisionally entered into force on December 31, 2020, the very day the
Brexit transition period concluded. This provisional application allowed
businesses to immediately benefit from the preferential trade terms, largely
mirroring those of the pre-existing EU-Vietnam Free Trade Agreement
(EVFTA) which the UK was no longer party to. Following the completion
of necessary ratification processes by both the UK and Vietnam, the
UKVFTA officially came into full force on May 1, 2021, solidifying the
long-term legal basis for the enhanced trade and economic partnership
between the two nations.

2. Content
The UKVFTA was negotiated based on the principle of inheriting the
commitments already established in the Free Trade Agreement between
Vietnam and the European Union (EVFTA), with necessary adjustments to
ensure its suitability for the bilateral trade framework between Vietnam and
the UK. Accordingly, the Agreement consists of 9 articles; 01 Annex
amending certain provisions of the EVFTA text; 01 Protocol; and 01
bilateral letter exchanged between Vietnam and the UK. Fundamentally, the
content areas subject to adjustment under the UKVFTA are similar to those
of the EVFTA, including: trade in goods (comprising general provisions and
market access commitments), rules of origin, customs and trade facilitation,
sanitary and phytosanitary (SPS) measures, technical barriers to trade
(TBT), trade in services (comprising general provisions and market access
commitments), investment, trade remedies, competition, state-owned
enterprises, government procurement, intellectual property, trade and

17
sustainable development, cooperation and capacity building, and legal -
institutional matters.
II.1. Trade in Goods
After 6 years from the UKVFTA's entry into force, the UK will
eliminate import duties on 99.2% of tariff lines, equivalent to 99.7% of
Vietnam's export turnover. Regarding Vietnamese goods imported from
the UK, Vietnam inherits all the commitments made in the EVFTA.
II.2. Trade, Investment and Services, Government Procurement,
Intellectual Property, Rules of Conduct
The two sides have fundamentally agreed to inherit all the
commitments made in the EVFTA. In addition, the UKVFTA
introduces certain adjustments.

3. Influences
3.1. Influence on United Kingdom
Currently, the UK is Vietnam's 10th largest export market and 15th in
total number of trade turnover globally. More importantly, Vietnam
consistently maintains a significant trade surplus with this market.
Vietnam primarily imports products such as machinery and equipment
for production, pharmaceuticals, and chemicals from the UK. The goods
traded between the two countries are complementary rather than
competitive.
As of 2021, the United Kingdom has 400 investment projects that are
still valid in Vietnam. These projects have a total registered capital of
US$3.6 billion, ranking the UK 16th among the 137 countries and
territories with investment projects in Vietnam.
It's worth noting that more recent data in mid-2024, indicated that the
UK had 569 active investment projects in Vietnam with a total registered
capital of $4.37 billion. While the 2025 information specifies "still
valid," the discrepancy in project numbers might reflect projects that
have concluded or been terminated.
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 The UK is a significant investor in Vietnam, and the UK-Vietnam
Free Trade Agreement (UKVFTA), along with the UK's recent accession
to the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership (CPTPP) in December 2024, are expected to further boost
trade and investment between the two countries. Key sectors attracting
UK investment include renewable energy, digital transformation,
advanced manufacturing, and finance.
The Agreement makes a significant contribution to ensuring the best
interests and trade terms for the United Kingdom with one of the fastest
growing and most open economies in Asia. The Agreement is therefore
also considered a model new-generation FTA between the UK and
ASEAN in the future. The UKVFTA creates a comprehensive, long-
term, and stable economic and trade cooperation framework between
Vietnam and the UK, thereby providing impetus for strengthening and
deepening the multifaceted cooperative relationship between the two
sides, contributing to the diversification of export markets and products.
3.2. Influence on Vietnam
The UKVFTA will help Vietnam improve its large-scale
manufacturing sector after the Covid-19 pandemic, opening the door for
goods exports to the UK:
 Regarding rice specifically, the Ministry of Industry and Trade
assesses that the UK is a very potential rice export market for
Vietnam. With the opportunities brought about by this Agreement,
rice originating from Vietnam will have a competitive advantage
over products from Thailand, China, and India. In addition, the
UK has committed to reviewing and increasing the tariff rate quota
(TRQ) for Vietnamese rice after 3 years from the date the UKVFTA
takes effect. This will also be an opportunity to boost rice exports to
the UK market.
 For vegetables and fruits, the UKVFTA, once effective, will
immediately eliminate 94% of the total 547 tariff lines for

19
 vegetables and fruits and processed vegetable and fruit products,
including many products where Vietnam has strengths such as
lychee, longan, rambutan, dragon fruit, pineapple, and melon.
 Under the UKVFTA, import duties on most raw shrimp (fresh,
frozen, chilled) imported into the UK are reduced from the basic
tax rate of 10-20% to 0% immediately upon the Agreement's entry
into force.
 According to forecasts by the Ministry of Planning and Investment,
the export turnover of textiles and garments to the EU market
will increase rapidly by about 67% by 2025 compared to the scenario
without the EVFTA. In terms of output, the EVFTA generally has a
positive impact on output with an increase rate of 6% (for the textile
industry) and 14% (for the garment industry) by 2030.
 Regarding wood and wooden products, the Ministry of Industry and
Trade analyzes that Vietnam is one of the largest exporters of wood
and furniture to the UK. Specifically, in 2019, it was the 6th largest
wood exporter to the UK market with a value of over $421.8
million. With the UKVFTA, many wood and wood products will
have a 0% tax rate within 5 years (raw timber currently has a tax rate
of 2-10%). Therefore, Vietnam's wood industry will also benefit from
this Agreement. The UKVFTA will help Vietnam sign more free
trade agreements, as well as help domestic manufacturers avoid
import duties.

4. Opportunities
Basically, the Vietnam-United Kingdom Free Trade Agreement (UKVFTA)
was negotiated based on the principle of inheriting the commitments already
established in the Vietnam-European Union Free Trade Agreement (EVFTA),
with necessary adjustments to ensure its suitability for the bilateral trade
framework between Vietnam and the United Kingdom (UK) and to ensure a
balance of benefits for both sides.

20
 The UKVFTA is expected to help reduce import duties on goods imported
from the UK into Vietnam. On Vietnam's side, building on the foundation of the
progressive and high-standard commitments of the EVFTA, the UKVFTA is
expected to continue the momentum of promoting trade and investment
relations between the two sides in the coming years. The biggest opportunities
and benefits created by this Agreement include promoting the export of
Vietnam's key products.
Regarding export promotion, the export sectors that greatly benefit from the
UKVFTA are seafood, rice, textiles and garments, wood, vegetables and fruits,
and footwear.
During the COVID-19 pandemic, the UK market saw an increasing demand
for agricultural products, food, electronic products (computers, internet
equipment), hygiene products, personal protective equipment, medical
equipment (ventilators, blood filtration machines), testing kits, and hospital
protective gear (nitrile gloves, masks, clothing for medical staff and patients).
Therefore, combined with the market access opportunities from the UKVFTA,
the export of goods to the UK market will continue to be strongly promoted.
In addition, commitments on services and investment, government
procurement, as well as specific regulations on market opening and technical
measures in certain specific sectors, will also create opportunities for UK
businesses, goods, and services to access Vietnam's market of nearly 100
million people more easily, while also helping Vietnamese consumers access
high-quality products and services from the UK in areas such as
pharmaceuticals, healthcare, infrastructure development, and clean energy.
Furthermore, the opportunities to improve the business investment environment
towards transparency and facilitation, as well as institutional reforms, will
continue to be enhanced by the EVFTA when implementing the UKVFTA.

21
5. Challenges
5.1. For the UK
The significant impact of the COVID-19 pandemic may reduce the
advantages of the UKVFTA for both Vietnam and the UK in attracting
investment from foreign businesses. Official data released on February 12,
2021, indicated that the UK economy contracted by 9.9% in 2020, marking
the largest annual decline since records began. Economists surveyed by
Refinitiv had initially projected an 8% contraction. The UK was among the
economies most severely affected by the pandemic, largely due to the
emergence of new coronavirus variants. This raises concerns about whether
the UK's foreign direct investment (FDI) inflows into Vietnam will grow as
anticipated, given the economic challenges the UK continues to face.
Consequently, UK FDI inflows may experience a significant slowdown.
5.2. For Vietnam
 The first is the technical barriers and regulations to imported
goods into the UK, which are infamously strict, especially for
agricultural products. For instance, in the agricultural sector, although
the UKVFTA inherits preferential treatment and flexible SPS
(Sanitary and Phytosanitary) regulations from the EVFTA, most of
Vietnam's agricultural sectors, such as tea and fruits and vegetables,
still face limitations due to a lack of uniformity in shipments,
inadequate post-harvest preservation, and overall quality issues.
Another challenge arises from some more traditional goods, such as
textiles and garments. Although the agreement facilitates the
expansion of supply sources through rules of origin in the UKVFTA,
Vietnam's current export production relies heavily on raw materials
imported from China or ASEAN. As a result, Vietnam needs to shift
the import of raw materials in this sector to take advantage of the
commitments under the agreement.
Another issue is that the UKVFTA includes "non-traditional"
commitments related to labor and environmental standards. Although

22
 Vietnamese laws already specify regulations on minimum wages,
working hours, occupational safety and hygiene, child labor, and
environmental protection that align with international standards, in
practice, some of our businesses have yet to comply fully. This could
lead to the risk that an entire industry may lose preferential benefits
due to violations by a small number of enterprises. Therefore, during
implementation, businesses must pay close attention to these
commitments.
 The second challenge is the intense competition the Vietnamese
products will face both externally and internally.
For starters, commitments to market access for goods and services
from the UK will create certain competitive pressures on the
economy, businesses, and domestic goods and services of Vietnam,
particularly in industries where the UK has strengths, such as
financial services, pharmaceuticals, and chemical products.
For textiles and garments, in the past five years, the UK has primarily
imported apparel from Vietnam. The top 10 apparel exports to the
UK include suits, jackets, and blazers for women or girls; outerwear
and coats for women or girls; pullovers, cardigans, vests, and similar
items made of knit or crochet fabric; coats, shirts, and shirt-like
garments designed for men but used by women or girls; T-shirts, tank
tops, and other undergarments.
Although China holds the largest market share, its export growth rate
for textile and garment products to the UK has declined by 8% over
the past five years. Besides China, the UK also imports textile and
garment products from Bangladesh, Cambodia, and Pakistan, which
have tax advantages over Vietnam (Bangladesh benefits from duty-
free imports under the EBA program, while Pakistan also enjoys
duty-free imports under the GSP+ program).
For footwear, thanks to double-digit export growth for several
consecutive years, Vietnam is now the world’s second-largest

23
footwear exporter. Vietnam’s footwear export revenue grew steadily
from $5.1 billion in 2010 to over five times that amount, reaching
$27 billion in 2022. However, despite being the second-largest
exporter, Vietnam only accounts for 8% of global footwear export
value, while China holds nearly 40%.
The UK is a promising but highly competitive footwear export
market. The UK footwear market is diverse, featuring a wide range of
materials (textiles, plastic, rubber, and leather) and various products,
including men's, women's, and children's footwear, as well as
specialized products such as snow boots and safety shoes. Compared
to competitors such as China, the Netherlands, Italy, Belgium, and
Germany, Vietnam faced the second-highest tariff rate among the top
15 footwear-exporting countries to the UK before the UKVFTA, with
an average tariff of 6.7%. With the UKVFTA, Vietnam now enjoys
equal tax competition, but it still lags behind China in terms of
economies of scale, as well as European nations like the Netherlands,
Italy, Belgium, and Germany in terms of design capabilities, product
variety, and cultural alignment with UK consumers.
For rice, the UK’s rice market is substantial, with an import demand
exceeding 700,000 tons in 2022. Despite being one of the world’s
leading rice exporters, Vietnam’s rice exports to the UK remain
modest, accounting for just 0.2% of the total, ranking 22nd among
the largest rice suppliers to the UK (source: UN Comtrade statistics).
Currently, Vietnamese rice faces stiff competition from leading rice
exporters to the UK, including India (22%), Pakistan (18%), Spain
(11%), Italy (10.9%), and Thailand (9.2%).
For seafood, one of Vietnam’s key export industries, the country has
strong advantages in experience, production capacity, and abundant
supply. The UK has a significant demand for seafood imports, valued
at approximately $4.4 billion annually (source: ITC statistics).
However, Vietnam's seafood exports to the UK only account for

24
around 6.7% of this market. Vietnam's main competitors in seafood
exports to the UK include China, Ireland, and Sweden. Not to
mention, our still imminent yellow card for exporting seafood to the
EU can hinder our effort despite Brexit.

25
III. EVFTA AND UKVFTA
1. Similarities
With many similarities, the UK - Vietnam Free Trade Agreement
(UKVFTA) could be called a direct copy of the EU - Vietnam Free Trade
Agreement (EVFTA).
 Content and Structure
The UKVFTA was negotiated based on the commitments in the
EVFTA, with necessary bilateral adjustments post-Brexit. Both
agreements encompass the following areas:
- Trade in goods and services
- Rules of origin
- Customs procedures
- Sanitary and Phytosanitary Measures (SPS)
- Technical Barriers to Trade (TBT)
- Investment
- Intellectual Property Rights (IPR)
- Sustainable development
 Tariff Commitments
“The commitments to reduce import tax according to the roadmap in
EVFTA and UKVFTA are the same.” (Nguyen Canh Cuong – Vietnam
Commercial Counselor in the UK).
Under both agreements, Vietnam commits to eliminating import
duties on a significant portion of tariff lines over a scheduled period. The
EU and the UK also agree to remove import duties on Vietnamese
products, thus enhancing Vietnam’s export potential.
 Banking Services
Vietnam allows foreign credit institutions to increase their ownership
in joint-stock commercial banks up to 49%. This commitment excludes
four state-controlled banks: BIDV, VietinBank, Vietcombank, and

26
 Agribank. The 49% ownership cap applies equally in both agreements
for a limited period of five years.

2. Key Differences
The EU - Vietnam Free Trade Agreement (EVFTA) and the UK -
Vietnam Free Trade Agreement (UKVFTA) share foundational similarities
but also exhibit distinct differences tailored to the specific bilateral
relationships between Vietnam and each partner.
 Regulatory Specificity
In some areas, EVFTA is more specific than UKVFTA. For example,
there are some notes on fruit and vegetables under the common customs
tariff outlined in the European Commission Implementing Regulation
and Successor Acts, setting out detailed rules. Binding Vietnam to more
specific rules is a perceptive strategy of UKVFTA to ensure high-quality
products and prevent substandard products from entering the UK.
 Tariff Rate Quota (TRQ)
Both agreements provide TRQs for specific Vietnamese products,
allowing certain quantities to be exported at reduced or zero tariffs.
However, the UK’s quota-free commitments for 12 Vietnamese
agricultural products differ from those under the EVFTA.
For example, under the EVFTA, the EU allocates a quota of 500 tons
for eggs and egg yolks, while the UKVFTA provides an additional 68
tons. Similarly, for milled rice, the EVFTA offers a quota of 20,000 tons,
and the UKVFTA adds 3,356 tons.

27
 (Data source: Ministry of Industry and Trade of Vietnam)
 Market Access Specifics
While both agreements are similar, there are subtle differences in
market access commitments. The strengths and needs of UK businesses
in accessing the Vietnamese market differ from those of the EU.
For example, in the UKVFTA, the UK allows Vietnam to export
certain products at a 0% tax rate within specific quotas, including egg
yolk, poultry meat, garlic, sweet corn, milled rice, tapioca starch, tuna,
surimi, sugar, mushrooms, ethanol, mannitol, sorbitol, dextrin, and other
modified starches.
 Financial and Service Market Access
Both agreements permit foreign institutions to own up to 49% of bank
charter capital, but UKVFTA does not provide exclusive rights to
specific banks like HSBC or Standard Chartered.

 Subsidy Policy
28
 EVFTA allows subsidies for public policy objectives provided they
do not distort trade. UKVFTA is more restrictive, generally prohibiting
trade-distorting subsidies.
 Commitments on Agriculture and Globalization Strategy
The EVFTA includes more detailed regulations on the import of fruits
and vegetables, showing flexibility and adaptation to European
standards, while the UKVFTA may lack similar details.
Post-Brexit, the UK needs to re-establish trade relations with
countries outside the EU, including Vietnam. The UKVFTA is part of
Britain's "Global Britain" strategy to expand global partnerships, not just
within Europe.
 Environmental and Labor Standards
Both the agreements emphasize adherence to high standards for
environmental protection and labor rights. However, the UKVFTA may
have specific adjustments to align with the UK's domestic policies post-
Brexit, ensuring these commitments are not only international standard-
compliant but also suitable for the rapidly evolving legal and policy
framework in the UK.
 Institutional Framework and Review Mechanisms
EVFTA provides a framework for periodic review of agreement
terms, especially in trade and investment, to ensure the agreement
reflects the true objectives and socio-economic realities of both sides.
Includes similar review provisions as the EVFTA but UKVFTA may
have specific adjustments better suited to the unique relationship
between the UK and Vietnam, especially post-Brexit.
 Commitments on Trade in Services and Investment
EVFTA focuses on expanding market access for services and
investment, establishing a fair and transparent competitive environment.
UKVFTA also aims to expand market access but may include minor
adjustments to reflect specific priorities of the UK and Vietnam,

29
 especially in public procurement and services where the UK has a
competitive advantage.
 Investment and Procurement Priorities
While EVFTA provides broader market access frameworks for EU
member states, UKVFTA reflects UK-specific competitive priorities in
public procurement and digital services.
 Impact on Businesses Practices
EVFTA promotes sustainable trade integration across the EU bloc.
UKVFTA emphasizes technological transformation and the need for
Vietnamese businesses to meet high professional standards of the UK
market.
Commercial Attache Nguyen Canh Cuong highlights the need for
Vietnamese enterprises to meet the high professional expectations of
British businesses, demonstrating a difference in approach and
expectations between the two agreements.
 Strategic Cooperation Outlook
EVFTA Represents a step forward in the relationship between
Vietnam and the EU, not only economically but also politically and
socially. UKVFTA is expected to be part of the UK's post-Brexit
globalization strategy, emphasizing not just trade but also a solid basis
for strategic partnership relations, especially after the UK's departure
from the EU.

 The EVFTA and UKVFTA both offer substantial economic opportunities

for Vietnam. Understanding their similarities and differences is vital for
businesses and policymakers to fully leverage these frameworks. While
structurally similar, each agreement reflects the distinct bilateral trade
philosophy and economic strategy of the EU and the UK, respectively.

IV. IMPLEMENTATION STATUS

30
 1. EVFTA
1.1. Highlights
• Significant export growth to the EU: After more than three years in
effect (since August 2020), the EVFTA has continued to serve as a critical
driver for Vietnam’s exports to the EU. According to Vietnam’s Ministry of
Industry and Trade (MOIT), total bilateral trade turnover between Vietnam and
the EU reached over 73.6 billion USD in 2023, with Vietnam’s exports
accounting for 62.2 billion USD.
• Increased utilization of preferential tariffs: The utilization rate of
EVFTA tariff preferences by Vietnamese exporters has shown a consistent
upward trend. In 2022, it was nearly 26%, and in 2023, this figure continued to
grow, reflecting better awareness and adoption by businesses.
• Key beneficiary sectors: Sectors such as textiles and garments, footwear,
seafood, agricultural products, and furniture have seen substantial benefits from
tariff reductions and improved market access under the agreement.
• EU investment in Vietnam: Investment in Vietnam remains on the rise,
particularly in areas like renewable energy, high-tech industries, logistics, and
manufacturing. The EVFTA has helped enhance Vietnam’s appeal as a
strategic production and investment destination for European firms.
1.2. Vietnam and EU Import - Export situation
Four years into the agreement, Vietnam has established itself as the leading
exporter to the EU within ASEAN, driving economic growth, job creation, and
greater consumer access to premium European products.
1.2.1. 2020 – 2023
In 2020, Vietnam's exports to the EU reached $35.1 billion, a 1.8%
decrease compared to the same period in 2019. The main export products from
Vietnam to the EU included mobile phones and components, computers,
electronic products and components, footwear, textiles and garments,
machinery, equipment, and spare parts, as well as coffee and seafood.
Vietnam's imports from the EU market reached approximately $14.65 billion,
marking a 4.3% increase compared to 2019. Vietnam primarily imported goods

31
from traditional markets such as Germany, Italy, France, the Netherlands,
Spain, Belgium, Sweden, and Ireland. Imports from these eight major markets
accounted for about 85% of Vietnam’s total imports from the EU in 2020.
The main imported products from the EU included computers, electronic
products and components, machinery, equipment, tools, and spare parts,
pharmaceuticals, chemical products, animal feed and raw materials.
In 2021, Vietnam's exports to the EU increased by 14.2% compared to 2020,
reaching $40.12 billion. Exports to most major EU markets recorded growth
compared to 2020, except for France, Hungary, Romania, Lithuania, Estonia,
and Malta, where exports declined. Meanwhile, Vietnam's imports from the EU
reached $16.89 billion, marking a 15.3% increase compared to the same period
in 2020. Imports from most major EU markets also grew, while imports from
Sweden, Slovenia, Latvia, Cyprus, Malta, and Estonia declined. as well as
textile, garment, leather, and footwear materials.
In 2022, Vietnam's exports to the EU27 maintained a growth trend for most
of the year but slowed down and declined toward the end of the year. Export
turnover to the EU increased by 16.7% compared to 2021, reaching
approximately $46.83 billion, accounting for 12.6% of Vietnam's total export
turnover. In terms of markets, exports to most EU27 countries recorded strong
growth compared to 2021, except for Austria, Slovakia, Portugal, and Finland,
where exports declined. In contrast, Vietnam's imports from the EU27 in 2022
decreased by 8.7% compared to 2021, amounting to $15.42 billion. This
decline was mainly due to reduced imports from Germany, Ireland, the
Netherlands, Spain, and Poland. Notably, imports from Ireland dropped by over
$1.1 billion, a 24.6% decrease from 2021, primarily due to a sharp reduction in
imports of microprocessors used in electronics manufacturing.
In 2023, Vietnam's exports to the EU reached $43.68 billion, marking a
6.7% decrease compared to 2022. While exports to the Netherlands, Spain,
Slovakia, and the Czech Republic showed positive growth, exports to
Germany, Belgium, France, Sweden, and other markets continued to decline.
Meanwhile, Vietnam's imports from the EU totaled $14.9 billion, a 3.1%

32
decrease from 2022. Most major imported goods from the EU saw a decline in
2023. However, some product categories recorded growth compared to the
previous year, including machinery, equipment, tools and spare parts,
chemicals, seafood, milk, and dairy products.
1.2.2. 2024
Vietnam's exports to the EU made an impressive recovery in 2024, reaching
nearly US$51.7 billion, an increase of $8.08 billion compared to 2023.With
total two-way trade reaching nearly $68.4 billion in 2024, Vietnam recorded a
trade surplus of $35 billion with the 27 EU member states - higher than the
$28.7 billion recorded in 2023. Vietnam exported nearly $51.7 billion to the
European Union, marking an 18.5 percent increase, equivalent to an additional
$8.08 billion compared to the previous year. Vietnam’s imports from the EU in
2024 totalled $16.7 billion, up 12 per cent, an increase of $1.8 billion from the
previous year.
2. UKVFTA
The UK - Vietnam Free Trade Agreement (UKVFTA), which came into
effect on May 1, 2021, has been actively implemented by both nations,
fostering bilateral trade and economic cooperation.
3.1. Highlights
• Tariff Reductions: The agreement has facilitated the elimination or
reduction of tariffs on a wide range of goods. For instance, the UK has
committed to removing tariffs on 99.2% of tariff lines within six years, while
Vietnam will eliminate 92.7% of tariff lines over the same period.
• Trade Growth: Since the UKVFTA's implementation, bilateral trade has
seen growth. In the first ten months of 2024, Vietnam's exports to the UK
reached $6.4 billion, marking a 22% increase compared to the same period in
2023.
• Diversification of Exports: Vietnam has expanded its export portfolio to
the UK, with significant increases in sectors such as electronics, textiles,
footwear, and agricultural products.
3.2. Ongoing Efforts

33
• Regulatory Alignment: Both countries continue to work on aligning
regulations and standards to fully capitalize on the agreement's benefits. This
includes addressing technical barriers to trade and ensuring compliance with
sanitary and phytosanitary measures.
• Support for Businesses: Initiatives have been introduced to assist
businesses in understanding and utilizing the UKVFTA's provisions, including
workshops, informational resources, and advisory services.
3.3. Vietnam and UK Import - Export situation
3.3.1. 2021 – 2023
In 2021, two-way trade between the two countries was 6.6 billion USD, up
17.2% from 2020, with a trade surplus of 4.8 billion USD.
For the UKVFTA Agreement, in 2022, trade turnover between Vietnam and
the UK reached 6.8 billion USD, up 3.3% from 2021. Vietnam's export
turnover to the UK reached 6.1 billion USD, up 5.2% compared to 2021.
Import turnover from the UK reached 771 million USD, down 9.8% compared
to 2021.
In 2023, while Vietnam’s exports to several markets declined, with some
dropping to 30%, exports to the UK still grew by 11%. The total trade
exchange between Vietnam and the UK reached $8.4 billion, marking an 18%
increase compared to 2022.
3.3.2. 2024
In October alone, the country’s export turnover to the UK hit 687.2 million
USD, up more than 13% from the previous month.
The 10-month growth has been driven by some key export items with large
turnover such as machinery, equipment, spare parts, computers, electronics,
footwear and textiles.
The leading export category in the last 10 months was machinery,
equipment and spare parts, with a turnover of 1.14 billion USD, up 39.7% year-
on-year and accounting for 17.9% of total exports.

34
Next was mobile phones and components with over 1.03 billion USD in
turnover, down 12.9% compared to the same period last year and accounting
for 16.3% of total exports so far.
Some other categories saw significant growth in exports compared to 2023:
- Computers, electronics, and components increased by 30.7%. Handbags,
suitcases and umbrellas rose by 18%. Seafood increased by nearly 10%.
- Base metals grew by 30.2%, wood and wood products by 15.5%, steel
products by 34%, and transportation means and spare parts by 35.7%.
The Vietnam–UK Free Trade Agreement (UKVFTA), which has been in
effect since 2021, has been a key driver of this growth. For three consecutive
years since the agreement's implementation, Vietnam’s exports to the UK have
seen significant improvement, with large trade surpluses.
Meanwhile, Vietnamese seafood is in fifth place and garments in sixth place
in terms of market share.
Last year, many additional agricultural products of Vietnam were allowed to
officially sell in the UK, such as orange, pomelo, lychee and durian. Nguyen
Hoai Nam, Deputy Secretary General of the Vietnam Association of Seafood
Exporters and Producers (VASEP) said that thanks to preferential tax rate in
the British market, so far, shrimp products account for 70 percent of the total
turnover of Vietnamese seafood exported to the UK, followed by tra fish
products at 20 percent.
Nguyen Canh Cuong, former Minister Counselor to the UK said that
businesses need support from authorities in order to improve the effectiveness
of the market approach strategy as well as increase business access to market
information.

35
V. CONCLUSION
The EU-Vietnam Free Trade Agreement (EVFTA) and the UK-Vietnam
Free Trade Agreement (UKVFTA) represent significant milestones in
Vietnam’s economic integration and trade liberalization efforts. Both
agreements open vast opportunities for economic cooperation, market access,
and sustainable development, fostering closer ties between Vietnam and its key
trading partners.
The EVFTA has paved the way for robust economic collaboration between
Vietnam and the European Union, promoting sustainable growth through the
elimination of tariffs, reduction of non-tariff barriers, and the enhancement of
investment opportunities. Meanwhile, the UKVFTA has built upon the
foundation laid by the EVFTA, ensuring continuity in trade relations between
Vietnam and the United Kingdom post-Brexit while also incorporating specific
provisions to address bilateral interests.
Despite similarities in tariff reductions and commitments to sustainable
development, the two agreements differ in various areas, including rules of
origin, technical standards, and specific sectoral commitments. Understanding
these differences is essential for businesses and policymakers to optimize the
benefits of both agreements while navigating potential challenges.
Overall, the successful implementation of the EVFTA and UKVFTA will
continue to play a crucial role in advancing Vietnam’s economic position on the
global stage. By capitalizing on the opportunities presented by these agreements
and addressing emerging challenges, Vietnam can further solidify its role as a
dynamic and resilient economy, strengthening its partnerships with both the EU
and the UK.

36
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https://en.nhandan.vn/vietnam-uk-trade-grows-22-in-10-months-
post141410.html
14. Tcct. (2023). Nhận diện những thách thức trên thị trường UKVFTA.
Tạp Chí Công Thương. https://tapchicongthuong.vn/nhan-dien-nhung-
thach-thuc-tren-thi-truong-ukvfta-106551.htm
15. Khánh An (2025). Đòn bẩy cho thương mại Việt Nam – Anh. Báo Quân
đội Nhân dân Việt Nam. https://www.qdnd.vn/kinh-te/cac-van-de/don-
bay-cho-thuong-mai-viet-nam-anh-816924
16. Tcct. (2021). Tương đồng và khác biệt giữa UKVFTA với EVFTA. Tạp
Chí Công Thương. https://tapchicongthuong.vn/tuong-dong-va-khac-
biet-giua-ukvfta-voi-evfta-77833.htm
17. Hạnh N.T. (2023). Những điều cần lưu ý với các hiệp định thương mại
tự do thế hệ mới. Sở Công Thương Đắk Lắk.
https://socongthuong.daklak.gov.vn/vi/news/hoat-dong-nganh-cong-
thuong/so-sanh-noi-dung-cam-ket-cua-hai-hiep-dinh-thuong-mai-tu-do-
ukvfta-va-evfta-4224.html
18. Ministry of Industry and Trade of Vietnam (MOIT): https://moit.gov.vn/
19. UK Department for Business and Trade:
https://www.gov.uk/government/organisations/department-for-business-
and-trade
20. European Commission Trade Portal: https://ec.europa.eu/trade/
21. WTO RTA Database: https://rtais.wto.org/
22. UN Comtrade: https://comtrade.un.org/
23. ITC Trade Map: https://trademap.org/

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