Experts are advising Vietnamese enterprises to boost their imports of raw materials from the UK to leverage the favorable tariffs provided by the UK-Việt Nam Free Trade Agreement (UKVFTA). Under the UKVFTA, Viet Nam can eliminate 48.5 per cent of tariffs starting from January 1, 2021; 91.8 per cent of tariffs from January 1, 2027, and 98.3 per cent from January 1, 2029. Additionally, 1.7 per cent of tariffs can be eased through tariff rate quotas or are not entitled to preferential treatment.

Since January 1, 2021, the agreement has allowed Viet Nam to remove 61 per cent of tariff lines for machinery and appliances imported from the UK, with plans to extend this benefit to all other products after nine years. Commencing from January 1, 2021, Viet Nam has already abolished 80 per cent of tariffs on raw materials for textiles, garments, and footwear, with intentions to eliminate tariffs on all other products within four to six years.

As per General Department of Customs statistics, Viet Nam imported goods worth nearly $373 million from the UK, comparable to the same period in 2022. Major imports from the UK included machinery, equipment, tools, and spare parts (24 per cent); raw materials for textiles, garments, leather, and shoes (5.2 per cent) among others.

A recent survey by Vietnam Report indicates 72.7 per cent of Vietnamese businesses are planning to diversify their supply sources, particularly for imported raw materials in the future. Their objective is to secure new suppliers offering competitive prices.