What is the UKVFTA and when did it start?
- Full name: Free Trade Agreement between the Socialist Republic of Vietnam and the United Kingdom of Great Britain and Northern Ireland
- Abbreviation: UKVFTA (United Kingdom – Vietnam Free Trade Agreement)
- Members: Vietnam and the United Kingdom (including England, Scotland, Wales, and Northern Ireland)
- Date of signing: December 29, 2020 (in London)
- Date of entry into force: Provisionally applied from January 1, 2021, and officially effective from May 1, 2021
Why was the UKVFTA created?
The UKVFTA, or the United Kingdom – Vietnam Free Trade Agreement, was established to ensure the continuity of trade relations between Vietnam and the UK following Brexit. It largely inherits the commitments and benefits of the EU–Vietnam Free Trade Agreement (EVFTA), preventing a reversion to higher World Trade Organisation (WTO) tariffs. This agreement, signed on December 29, 2020, and provisionally applied from January 1, 2021, officially became effective on May 1, 2021, reinforcing the strategic partnership between the two nations.
The primary reasons for its formation include:
- Ensuring Continuity: To maintain the trade preferences, especially tariff reductions and eliminations, that both sides enjoyed under the EVFTA.
- Strengthening the Strategic Partnership: To reinforce the strategic partnership and establish a stable, long-term legal framework for trade and investment.
- Opportunities for Vietnam: To help key Vietnamese export sectors like seafood, textiles, footwear, and agricultural products maintain their competitive edge in one of Europe’s largest markets.
- Opportunities for the UK: To ensure continued access to Vietnam’s rapidly growing market and expand cooperation in emerging sectors.
What are the main benefits and commitments of the UKVFTA?
The UKVFTA largely replicates the EVFTA, offering significant benefits and commitments to both Vietnam and the UK. This comprehensive agreement, consisting of 14 Chapters, 1 Protocol on Rules of Origin, and several Joint Commitment Letters, includes key provisions designed to streamline trade and protect specific products, with certain technical adjustments tailored to the bilateral context.
| Commitment Area | Corresponding EVFTA Chapter | Key Contents |
|---|---|---|
| I. Trade in Goods | Chapter 2 | Commitments on tariff reduction and elimination (99% of tariff lines after 7 years). |
| II. Rules and Procedures | Chapters 3–4 | Rules of Origin (using EUR.1 Certificate of Origin or self-certification) and customs procedures. |
| III. Technical Barriers | Chapters 5–6 | TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary Measures) to facilitate trade. |
| IV. Trade Remedies | Chapter 7 | Rules on anti-dumping; anti-subsidy; and bilateral safeguard measures. |
| V. Services; Investment & Government Procurement | Chapters 8–9 | Market access commitments in services (finance; telecommunications; logistics); investment; and public procurement. |
| VI. Intellectual Property Rights | Chapter 10 | Protection of intellectual property rights; including the mechanism for Geographical Indications (GIs). |
| VII. Sustainable Development | Chapter 13 | Commitments on labor (implementation of ILO conventions) and environment (implementation of the Paris Agreement). |
| VIII. Other Provisions | Chapters 11; 14–17 | Competition policy; transparency; dispute settlement; and institutional/exemption provisions. |
Key Highlights (Inherited from EVFTA)
Tariffs: Both sides will implement tariff reduction and elimination schedules in line with the EVFTA. Over 99% of Vietnam’s export value to the UK will be exempted from tariffs after seven years.
Rules of Origin: Inherits the EVFTA rules, allowing Registered Exporters (REX) to self-certify the origin of goods—an important step in simplifying trade procedures.
Geographical Indications (GIs): The UK commits to protecting 169 Vietnamese GIs, similar to the EVFTA, safeguarding the reputation of iconic agricultural products such as Buon Ma Thuot Coffee, Phu Quoc Fish Sauce, and various tropical fruits.
Where can I find official information and guidelines for the UKVFTA?
To access the most complete and official information regarding the UKVFTA, including its full text and implementation guidelines, businesses can refer to Vietnam’s FTA Portal, managed by the Ministry of Industry and Trade (MOIT). This portal is the primary resource for Vietnamese enterprises seeking detailed insights into the agreement.
- Full text of the UKVFTA (in Vietnamese and English)
- Key annexes (tariff schedules, rules of origin)
- Link: Search “UKVFTA” on https://vntr.moit.gov.vn/
Who provides UKVFTA implementation guidelines and legal documents?
Ministry of Industry and Trade (MOIT): Lead agency; issues Circulars on Rules of Origin and procedures for issuing Certificates of Origin (Form EUR.1) or self-certification.
Ministry of Finance (General Department of Customs): Issues Government Decrees on Vietnam’s special preferential import tariffs to implement the UKVFTA.
Business Support Organisation: Vietnam Chamber of Commerce and Industry (VCCI) – WTO and Integration Center: Provides detailed handbooks, especially guidance on using the REX self-certification mechanism under the UKVFTA.
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