21/07/2020

Trade arrangements with Vietnam

Please find the UK government’s update on trading arrangements with Vietnam, here.

The EU-Vietnam FTA will come into force in the 1st of August 2020. From this date, duties on imports to and from Vietnam will either be immediately eliminated or phased out over a number of years. Imports of leather and leather goods from Vietnam to the EU will be duty-free from the effective date, while some footwear will be subject to phased reductions.

Duties on exports of leather, leather goods and footwear to Vietnam will be phased out over a period of 4 to 8 years (details of tariff changes can be found in Annex 2-A-1 and 2-A-2 of the FTA (here). The current standard GSP arrangements for export from Vietnam to the EU will be withdrawn 2 years after the entry date.

These arrangements will apply to the trade between the UK and Vietnam, until the end of the transition period, on the 1st of January, 2021. Thereafter, imports from Vietnam will be subject to UK GSP, which provides the same preferential market access as EU GSP. Exports from the UK to Vietnam will no longer benefit from conditions of the EU-Vietnam FTA.

This suggests that, after the 31st of December, 2020, UK exporters to Vietnam could be at a competitive disadvantage against exporters in the EU.

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