HANOI: Although there are few trade defence investigations initiated by the United Kingdom on imported products originating from Vietnam, exporters should actively prepare for the risk of more of them, as exports are expected to grow rapidly thanks to the UK-Vietnam Free Trade Agreement (UKVFTA).

The UKVFTA has greatly improved trade between the two countries since the deal took effect on May 1, 2021.

Vietnamese enterprises have successfully taken advantage of the opportunities brought by the UKVFTA to expand exports to the United Kingdom.

Statistics from the Industry and Trade Ministry showed that bilateral trade jumped by 17.2% over 2020 to reach US$6.6bil in 2021.

In 2022, despite a drop in two-way trade due to the global economic slowdown, Vietnam’s exports to the United Kingdom rose by 1.9% and by 11% in 2023, while exports to most markets saw decreases.

In the first 10 months of this year, two-way trade reached more than US$7bil, up by 19.9% over the same period last year.

Thanks to the UKVFTA, Vietnam’s exports to the United Kingdom are expected to hit US$10bil in the next few years.

However, along with rapid export expansion, there will be a corresponding increase in the use of trade defence instruments to protect local production industries, requiring manufacturers and exporters to actively prepare for investigation risks.

According to the Trade Remedies Authority of Vietnam, there is only one trade defence investigation initiated by the United Kingdom on Vietnamese products to date, on steel products.

The authority noted that the UKVFTA and the United Kingdom’s official participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership from Dec 15 are creating significant opportunities for Vietnam to expand exports to the United Kingdom.

The United Kingdom is a large market with a population of around 68 million and a diversified consumption demand.

The risk of trade defence investigations from the United Kingdom on Vietnamese export goods is always present.

According to the authority, steel and aluminium products face a high risk of trade defence investigations. Ceramics, tiles and garments are at low risk of being investigated, but caution is still needed.

After Brexit, the United Kingdom has remained a member of the World Trade Organisation (WTO). Thus, the United Kingdom’s trade defence regulations are still based on the WTO’s.

However, there are some notable differences from European Union regulations.

The United Kingdom’s trade defence policy focuses on three main measures: anti-dumping, anti-subsidy and safeguard.

Former trade counselor of Vietnam to the United Kingdom Nguyen Canh Cuong, said that the United Kingdom had developed its own trade defence mechanism to protect its domestic industries from unfair competition.

Therefore, to export sustainably to the United Kingdom, manufacturers and exporters needed to be careful in managing prices and cooperate closely with relevant parties to avoid investigation risks in the United Kingdom. He also urged enterprises to keep a close eye on updates to UK trade policies to minimise the risk as well as maintain a reasonable pricing strategy.

The Trade Remedies Authority of Vietnam said that dealing with trade defence investigations was a problem for a majority of Vietnamese exporters. — ANN