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UKVFTA – the ‘boulevard’ connecting Vietnam – UK

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Officially taking effect at 11pm on December 31, 2020, the United Kingdom (UK)-Vietnam Free Trade Agreement (UKVFTA) has reopened the trade and investment bridge between the two countries after the UK left the European Union (Brexit).

To ensure uninterrupted bilateral trade and the smooth implementation of trade liberalization commitments, Vietnam and the UK rushed to negotiate the UKVFTA on the principle of inheriting the EU-Vietnam Free Trade Agreement (EVFTA). It is hoped that the UKVFTA will be an important driving force to bring the relationship between the two countries to a new height.

Top partner

Despite the negative effects of the Covid-19 pandemic, the import-export turnover between the two countries is estimated to reach US$5.55 billion in 2020.

Vietnam’s exports to the UK in 2020 hit $4.88 billion and imports $670 million. The UK is currently the 3rd largest trading partner of Vietnam in Europe, and the 9th largest export market of Vietnam in the world. More importantly, Vietnam has always maintained a large trade surplus in this market.

The main export products of Vietnam to the UK include: phones and components, textiles, footwear, seafood, processed agricultural products, furniture and wood products, and plastics products. Vietnam mainly imports machinery and equipment for production; pharmaceuticals, and chemicals from the UK.

Đại lộ nối liền Việt - Anh

The UKVFTA was signed by the authorized representatives (Ambassadors) of the two governments in London (UK). Photo: VGP

Currently, the room for cooperation in the field of trade between the two countries is still very large. The value of Vietnamese goods exported to the UK accounts for only about 0.88% of total UK imports and the value of imported goods from the UK to Vietnam only accounts for 0.17% of the value of the UK’s goods exported to the world. Import and export goods between the two countries are complementary rather than competitive.

In the field of investment, the UK has 400 valid projects in Vietnam, with total registered capital of $3.6 billion, ranking 16th among 137 countries and territories having investment projects in Vietnam.

The UK’s investment in Vietnam has not properly reflected the potential of this country, which is one of the 5 top foreign investment countries in the world (about $300 billion), and also one of the top countries attracting foreign investment in the world. Vietnam also has nine projects with total registered capital of $11.5 million in the UK.

The two countries also have many cooperation projects in the fields of oil and gas, renewable energy, and energy savings that are being implemented effectively.

Trade highways

The signing of UKVFTA took place when Prime Minister Boris Johnson’s administration was promoting its strategy of shifting focus of cooperation to the Indo-Pacific region.

For the post-Brexit period, the agreement makes an important contribution to ensuring the best interests and terms of trade for the UK with one of the fastest growing and most open economies in Asia. Therefore, the agreement is also considered a model of the next-generation FTA between the UK and ASEAN in the future.

For Vietnam, in addition to ensuring uninterrupted bilateral trade after the end of the post-Brexit transition period, the UKVFTA will create a comprehensive, long-term and stable economic-trade framework with the UK, thereby creating a driving force for strengthening and deepening multifaceted cooperation between the two sides, contributing to diversifying markets and export products.

The fact that the UKVFTA was signed and put into effect at the time the Brexit officially took effect on January 1, 2021 is very important, marking a ripe time for the Vietnam-UK relationship to take off.

Opportunities

The agreement will promote the export of key products of Vietnam, thereby increasing the proportion of goods entering the UK market, which only accounts for less 1% of the UK’s total import value.

For the fishery sector, the commodity group with the earliest advantages is shrimp and some types of fish. As soon as the agreement takes effect, import tax on most types of raw shrimp into the UK will be reduced from the basic tax rate of 10-20% to 0%.

For the textile and garment industry, total exports to the UK accounted for 2.77% last year. Commitments to open markets in EVFTA and UKVFTA will make an increase in turnover in this large market. In addition, with commitments on aggregation for fabric materials from the EU, in the long term, Vietnamese textile enterprises will expand their sources of supply of raw materials, avoiding dependence on certain markets.

After UKVFTA comes into effect, Vietnam’s rice products will have an unprecedented opportunity, especially fragrant rice, to penetrate one of the 10 largest markets in the world, with strict standards.

According to UKVFTA commitments, the UK gives Vietnam a total duty-free quota of 13,358 tons per year. The quota will be reviewed by the two countries three years after the agreement took effect.

Besides rice, more than 10 agricultural products of Vietnam also enjoy this tax-free quota preferential rate, like tapioca.

The wood industry will also benefit directly from the agreement. In 2019, Vietnam was the 6th largest wood exporter to the UK, accounting for 3.6% of the import market share. With UKVFTA, many wood products will have a tax rate of 0% within the next five years.

The market share for fruit products will open up great opportunities for many Vietnamese products such as litchi, longan, rambutan, dragon fruit, pineapple, melon … after 94% of the total 547 tariff lines of this industry are deleted. In addition, British consumers prefer tropical, frozen or processed products, with environmentally friendly production processes, less CO2 emissions, and less plastic packaging.

During the Covid-19 pandemic, demand for agricultural products, food, electronic products (computers, Internet equipment), toiletries, personal protective equipment, medical equipment (ventilators, blood filters), testing equipment, and hospital protective gear (nitrate gloves, masks, and clothing for medical staff and patients) from the UK market increased. Therefore, combined with market access opportunities from the UKVFTA agreement, exports to the UK market will continue to be strongly promoted.

To effectively exploit the UKVFTA and conquer a high standard market like the UK, Vietnamese businesses must make great efforts in market research and product innovation, as well as meet the standards and tastes of British consumers and continue to improve the professional commercial level to establish firm customer trust.

UK firms will have a strong market adjustment to take advantage of the UKVFTA when and only when Vietnamese firms meet their expectations for expertise and trust. Nearly 100,000 Vietnamese students graduating from UK universities is a valuable resource that businesses cannot ignore if they want to develop cooperation with the British.

Tu Hoang

Source: https://vietnamnet.vn/en/feature/ukvfta-the-boulevard-connecting-vietnam-uk-711159.html

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Vietnam’s Bamboo Airways plans to raise $200 million in U.S. IPO: chairman

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HANOI — Vietnam’s Bamboo Airways plans to raise up to $200 million in an initial public offering in the United States, potentially securing a market capitalisation of up to $4 billion, its chairman Trinh Van Quyet said on Wednesday.

Bamboo Airways, owned by property and leisure company FLC Group, plans to offer a 5%-7% stake in the IPO, which it expects in the third quarter of this year, Quyet told Reuters in an interview.

“The IPO will be part of our efforts to expand our services globally,” Quyet said, adding that Bamboo Airways has been working with an international auditing firm for the potential offering on the New York Stock Exchange.

The company said last month it planned to list its shares on a local stock exchange in the third quarter, but Quyet said on Wednesday that was now “a backup plan, depending on market conditions”.

Quyet said the airline will increase its fleet to 40 aircraft by the end of this year, from the current 30, adding two Boeing 787-9 Dreamliners would be among the new planes.

He said the airline wanted to launch flights to new destinations including the U.S., Australia, Germany, Japan and the United Kingdom this year if the COVID-19 pandemic situation improved.

“We will start conducting chartered flights to the U.S. in July and target the launch of non-stop commercial flights between Ho Chi Minh City and San Francisco in September, with an initial frequency of three flights per week,” Quyet said.

Bamboo Airways, which made its maiden flight in January 2019, is targeting a 25% rise in pretax profit to 500 billion dong this year he added.

Source: https://tuoitrenews.vn/news/business/20210415/exclusive-vietnam-s-bamboo-airways-plans-to-raise-200-million-in-us-ipo-chairman/60370.html

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Efforts to stimulate domestic consumer market continue as pandemic threatens exports

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Consumers shop at Co.opmart supermarket on HCM City’s Nguyễn Đình Chiểu street. Cities and provinces across the country are seeking ways to promote domestic consumption of goods and services. VNA/ Photo Mỹ Phương

HCM CITY – Many provinces and cities have launched programmes this year to promote local consumer demand to support businesses as the COVID-19 pandemic continues to affect exports.

The Ministry of Industry and Trade will organise conferences to connect producers, suppliers and retailers, and events for producers and traders, especially small traders, to help take goods to residential areas, industrial parks and rural and mountainous regions, the Sài Gòn Giải Phóng (Liberated Sài Gòn) newspaper reported.

It will help encourage consumption by fostering the evening economy and holding fairs and exhibitions of products and services. It continues to implement the ‘Vietnamese people give priority to using Vietnamese goods’ programme.

It will also promote the adoption of IT and foster e-commerce.

The Hà Nội Department of Industry and Trade will organise five Vietnamese Goods Weeks this year to stimulate demand.

To be held in the districts of Hà Đông, Hai Bà Trưng, Nam Từ Liêm, Quốc Oai, and Ba Vì, they will have around 100 standard booths each.

Companies and co-operatives will exhibit food products, textiles, footwear, consumer goods from One Product One Commune programmes from Hà Nội and other cities and provinces.

The department will subsidise booth costs by 50 per cent.

The city will also support localities and businesses in Hà Nội and elsewhere in selling agricultural and aquatic produce that face difficulties in selling due to the pandemic.

It will strengthen communications and promotions, create the best conditions for businesses to reach consumers and expand their market.

Products displayed and sold at the events will all be Vietnamese products with quality, food safety and traceability guaranteed.

To effectively implement the programme, the department has called on people’s committees of districts and towns to review all businesses and co-operatives to participate in the 2021 Vietnamese Goods Week of Hà Nội, especially agricultural produce that are difficult to sell and the One Product One Commune programme.

According to the newspaper, the Cần Thơ City Department of Industry and Trade also plans to organise a promotional month programme, possibly from April 10 to May 10.

It will seek the participation of businesses, supermarkets, commercial centers, convenience stores, restaurants, hotels and entertainment venues.

HCM City plans to focus on digitisation of industry and promotion of domestic tourism.

Deputy director of the city Department of Tourism, Bùi Thị Ngọc Hiếu, said her agency is stepping up digitisation, and the sector would continue its efforts to boost domestic tourism to drive the recovery of the industry.

Tourism co-operation and linkages between HCM City and the north-east, north-west and the central regions would also serve to boost domestic travel, she added. –

 

 

Source: https://vietnamnews.vn/economy/926004/efforts-to-stimulate-domestic-consumer-market-continue-as-pandemic-threatens-exports.html

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​Bamboo Airways plans US IPO in Q3

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​Bamboo Airways plans US IPO in Q3

A Bamboo Airways aircraft lands at Da Nang International Airport in March. Photo by Shutterstock/Jeffry Surianto.


Private carrier Bamboo Airways is considering an initial public offering of shares in the U.S. this year to raise $200 million.

The IPO is expected to take place in the third quarter, with the company likely to offer a 5-7 percent stake to secure a market capitalization of up to $4 billion, Reuters quoted its chairman, Trinh Van Quyet, as saying on Wednesday.

It is preparing for the issuance together with an international auditing firm and plans to list on the New York Stock Exchange.

Last month, Quyet had announced the airlines plans to list 105 million shares on either the Ho Chi Minh Stock Exchange or Hanoi Stock Exchange at an initial price of VND60,000 ($2.61), but on Wednesday he said that has now become “a backup plan”.

“The US IPO will be part of our efforts to expand our services globally.”

It expected to operate charter flights to the U.S. from July this year and thrice-weekly commercial flights from HCMC to San Francisco from September.

The airline has received a permit from the U.S. Department of Transportation to carry passengers and cargo to that country.

This year it also plans to expand its fleet from 30 aircraft to 40, and launch flights to other new destinations like Australia, Germany, Japan, and the U.K. if the Covid-19 pandemic is under control.

It currently flies on 60 domestic routes.

Last year, it carried over seven million passengers to account for a 20 percent market share, and hopes to increase it to 30 percent this year.

Source: https://e.vnexpress.net/news/business/companies/bamboo-airways-plans-us-ipo-in-q3-4263154.html

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