Total trade in goods and services between Vietnam and the UK in 2022 amounted to £6.4 billion, in current prices, an increase of 20.5% or £1.1 billion from the four quarters to the end of 2021. This was the highest level of trade between the two countries on record.
The UK’s exports to Vietnam increased by 14.6% to £1.1 billion in 2022, while its imports from Vietnam increased by 25.3% to £5.3 billion. This resulted in a trade deficit of £4.3 billion for the UK, which was slightly higher than the trade deficit of £4.2 billion in 2021.
The major UK exports to Vietnam in 2022 were:
- Pharmaceuticals (£274 million)
- Machinery and equipment (£182 million)
- Chemicals and related products (£164 million)
- Transport equipment (£110 million)
- Electrical and electronic equipment (£106 million)
The major UK imports from Vietnam in 2022 were:
- Telecommunications and sound equipment (£1,050 million)
- Clothing and accessories (£892 million)
- Footwear (£442 million)
- Electrical and electronic equipment (£336 million)
- Machinery and equipment (£299 million)
The increase in trade between Vietnam and the UK in 2022 was driven by a number of factors, including:
- The implementation of the UK-Vietnam Free Trade Agreement (UKVFTA) in January 2021. The UKVFTA has eliminated or reduced tariffs on a wide range of goods traded between the two countries.
- The strong economic growth in Vietnam. Vietnam’s GDP grew by 8.02% in 2022, the fastest rate of growth in Southeast Asia.
- The increasing investment by UK companies in Vietnam. The UK is the fourth largest foreign investor in Vietnam, with total investment of over £4 billion.
The UK and Vietnam are also working together to promote trade in services. In 2022, the two countries signed a Memorandum of Understanding on Financial Services Cooperation. The MoU aims to promote cooperation between the two countries in the financial services sector and to facilitate the trade in financial services between the two countries.
The outlook for trade between Vietnam and the UK is positive. The UKVFTA is expected to boost trade between the two countries in the coming years. Additionally, the strong economic growth in Vietnam is likely to create new opportunities for UK businesses to export their goods and services to the country.
Here are some specific examples of how the UKVFTA has benefited businesses and consumers in the UK and Vietnam:
- UK exports to Vietnam increased by 18% in 2022, after the UKVFTA took effect.
- The UKVFTA has helped to create new jobs in both the UK and Vietnam, particularly in the manufacturing and service sectors.
- The UKVFTA has made imported goods from the UK and Vietnam more affordable for consumers in both countries.
- The UKVFTA has encouraged UK companies to invest in Vietnam, which has helped to boost economic growth and development.
Overall, the UKVFTA is a positive development for the UK and Vietnam. It is expected to continue to boost trade, investment, and economic growth for both sides in the years to come.