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UKVFTA is the third such agreement for Vietnam in 2020, after the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August and the Regional Economic Comprehensive Partnership (RCEP) has been signed in November.

Vietnam’s Potential to Attract More FTA from UK is Huge, HSBC CEO Vietnam Says
CEO of HSBC Vietnam - Tim Evans
Recently, UK and Vietnam finally signed up the UKVFTA. This can be seen as a big achievement and will pave the way for further cooperation between the two countries, according to the latest remarks from CEO of HSBC Vietnam, Tim Evans. 
As from the viewpoint of HSBC’s CEO, yet another piece of good news for Vietnam despite the challenges of a year where the Coronavirus has had a material impact both economically and financially.
Yesterday, the United Kingdom (UK) and Vietnam have concluded a Free Trade Agreement (FTA), providing essential continuity to the close trading relationship between the UK and Vietnam. This is the third such agreement for Vietnam in 2020, after the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August and the Regional Economic Comprehensive Partnership (RCEP) has been signed in November.
Vietnam and  the UK have a long established diplomatic and economic relationship. We have seen the ties between the two countries continue to positively evolve for many years now. Embracing global integration has been a key priority for Vietnam’s government and is an integral part of their strategy to drive future economic growth. With this ‘open door’ strategy, the country’s trade turnover has reached USD489,1 billion in eleven months of  2020, representing an increase of 3.5% year-on-year (source: GSO). In addition, Vietnam has also been emerging as a destination for foreign direct investment given its market size, growth story, stable political environment, willing and able workforce in addition to having access to important export markets through its comprehensive list of FTAs.
The UK is currently ranked 16th among countries from an ‘investing into Vietnam’ perspective with total registered capital of nearly US$4 billionas of September 2020.The UK had 402 valid investment projects in Vietnam with combined registered capital of USD3,6 billion(source: GSO). In return, Vietnam has increased its share of ASEAN’s total merchandise tradewith the UK from 8.1% to 14.4% between 2010–2014 and this has increased further to 18.6% in 2019. The UK’s trade with ASEAN and Vietnam has also recorded strong growth in recent years. In particular, merchandise trade with Vietnam has grown at a rate of 9% per annum between 2014–2019 (source: Báo Công thương).
Looking at the dynamics of the relationship between the two countries, and especially in the context of an economic recovery post COVID-19, we believe that there is still room for Vietnam to attract additional foreign investment from the UK, given its position as the fifth largest global investor, and the fact that the country is now also pursuing its ‘Global Britain’ strategy. The UKVFTA is an important step for the UK but also a major boost to Vietnam in terms of export opportunities, FDI and engaging UK firms in the country’s efforts to move up the value chain. 
Vietnam’s current major advantage is in the export of electronics, footwear, garments and textiles, woodwork, and aquamarine products. This FTA will also create more opportunities for UK businesses in the services sectors, such as finance, insurance, education, consulting, high tech, renewable energy, and pharmaceuticals to name a few.
As HSBC Vietnam is one of the longest serving British financial institutions operating in Vietnam with 150 yearsof presence in the market, we are very excited about what this means for the future of the country. We welcome this FTA which signals Vietnam’s continued rise as an active participant in global trade. 
A formal FTA will definitely further promote the bilateral relationship between the two countries and also play an important role for both countries’ as they  embark on their post COVID-19 economic recovery strategies. Furthermore, the FTA will allow even greater rapprochement between the two countries besides creating exciting opportunities for both Vietnamese and British companies in the years ahead.
“For the financial services sector, we believe that the FTA will contribute to the further development of the industry and also help push the digital transformation agenda. The opening of new markets and easing of cross-border transactions are expected to increase capital funds and promote foreign direct investment into Vietnam, CEO of HSBC Vietnam predicted. 
Financial institutions will need to lead the way in developing new technologies and methods to adapt to the new open economy. They will also be relied on to ensure changes are quickly and efficiently executed. Lastly, the FTA should create a more favourable environment for investors and therefore we can expect the Vietnamese financial services sector to embark on further reforms to capitalise on this opportunity and facilitate ongoing growth and development.

DIEP NGUYEN