Anticipating the impact of the UK's accession to the CPTPP on Vietnamese exports
The United Kingdom’s recent accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on July 16, following Brexit, has raised concerns about its potential impact on Vietnamese exports, according to the Ministry of Industry and Trade (MoIT). President of the Vietnam Timber and Forest Product Association, Do Xuan Lap, expressed the need for Vietnam to sustain its exports to the UK to avoid missing out on opportunities. Lap highlighted that Vietnamese products entering the UK market will face tough competition from other CPTPP member countries.
Vietnam’s export commodities, including electrical components, cabinetry, textiles, footwear, furnishings, fish, and vegetables, are popular in the UK market. Lap noted that Vietnam’s timber products alone account for 7.2% of the UK’s total wood imports. However, experts have reservations about whether the UK’s participation in the CPTPP indicates a willingness to open its market to products from other member nations in exchange for preferential market access for British exports. There are also speculations that the UK government may introduce new trade regulations with higher technical standards to achieve its green economy objectives, which could pose additional challenges for Vietnamese exporters.
Despite these concerns, trade opportunities are expected to expand in the future. The Vietnam-United Kingdom Free Trade Agreement, which has been effectively implemented, led to a bilateral trade increase of 3.4% to $6.84 billion in 2022, according to MoIT data. However, Vietnam’s exports to the UK account for less than 1% of the market’s import demand, and imports from the UK represent less than 0.2% of British exports’ value. The UK currently ranks 16th among the countries with investment initiatives in Vietnam, despite being one of the top five countries with significant foreign investment.
Export procedures to the UK differ from those of the EU, with the UK Conformity Assessed mark being required for most industrial products since January 1. Additionally, the Trade with Developing Countries Programme, covering 65 countries and effective since early 2023, offers reduced tariffs and simplified rules of origin. Concerns have been raised that these changes may reduce Vietnam’s competitive edge in the UK market.