UK Minister of International Trade Greg Hands visited Vietnam on Wednesday to explore trade cooperation opportunities between the two countries. His visit came amidst the UK’s pursuit of full membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2023.
Vietnam is the first stop on the minister’s three-day trip to three Southeast Asian countries, all of which are founding members of the partnership.
During an exclusive interview with Tuoi Tre News, Hands emphasized what the UK can offer the CPTPP, as well as discussed the UK’s strong strategic partnership with Vietnam.
In a speech at Lancaster House on January 23, UK Trade Secretary Kemi Badenoch outlined five priorities for trade. What are your priorities as the Minister of State for Trade Policy?
My personal priorities are, first, to get the UK into the CPTPP. Vietnam will play a crucial role in that progress. My second priority is to do a free trade agreement with India this year, which is also another important part of our work with [India’s] huge economy.
The third area is removing trade barriers around the world to make sure that British goods and services can more easily enter markets anywhere in the world, including Vietnam.
The fourth priority is doing more work in the United States, particularly through state-level memoranda of understanding with individual U.S. states. Those are like mini-arrangements to improve the flow of services between the UK and individual U.S. states.
UK Trade Secretary Kemi Badenoch said she wants to seal high-quality deals with India and the CPTPP. Can you tell us about the UK’s aspiration to join the CPTPP and give an update on its progress? How does Vietnam fit into that journey?
The UK joining the CPTPP will be a major move. The UK will be the first country in the world to join the CPTPP and its 11 founding members. The UK joining would fundamentally change the CPTPP, which is currently about 12 percent of global gross domestic product (GDP). With the UK, that number will rise to 15.5 percent. It also changes the geography of the CPTPP, which is currently a Pacific Rim trade agreement.
The UK joining the CPTPP would make it a global agreement – a global plurilateral agreement that would include pro-free trade countries. It is a huge opportunity for Vietnam as a founding member. We'll be setting global free trade rules of the future. The CPTPP is a very good agreement because it removes more than 99 percent of tariffs. It offers liberal regulations in terms of rules of origin, data, digital trade. These are all important things for both the UK and Vietnam.
I think we're nearing a conclusion to the process of joining the CPTPP. We are looking for a further round [of talks] in February and we hope that will clear up the remaining issues that are still out there. We've made a lot of progress. We, of course, understand the very high standards of the CPTPP and that they want to keep those high standards. The UK believes that the CPTPP has a great future ahead with those standards and that the UK can fulfill [those standards].
Do you have an expected timeline for the UK joining the CPTPP?
We just want to make it as quickly as possible. There's still a negotiation ahead. I don't really have a time limit for that negotiation. I think, given the interest of other countries and other parties in joining [the CPTPP], getting the UK in will enable the CPTPP member parties to move forward with other applications.
The UK is the fifth-largest economy in the world, and it wants to be a part of the CPTPP. Have you seen any obstacles during your negotiations?
Like every trade negotiation, there're always some issues. The CPTPP is a bit different because it's an existing agreement. We are not negotiating from scratch. Therefore, there'll be some things that the UK needs to look at very carefully. There will be some areas where CPTPP parties will look very carefully at what the UK's position is. So, it's not a straightforward negotiation, but I think that CPTPP parties can be rest assured that the UK has very high standards and is very keen to join and to grow the CPTPP.
Recently, the UK joined hands with the U.S in exporting control chips to China, which is also seeking membership in the CPTPP. Would there be any issues between China and the UK if both countries become CPTPP members?
We are not members of the CPTPP now, so it’s not right for the UK to comment on other countries joining in the future because we ourselves are not members. It’ll be a matter for whoever are the members of the CPTPP at the time.
The UK, like many other countries, is looking at its supply chains and looking at the security of those supply chains. In relation to semiconductors, it is making sure that those supply chains are robust and have good access to semiconductors of different types. So, that is work the UK is doing and other countries are doing as well – ensuring that the security of their supply chains remains strong.
You might not be able to comment on other countries' bids for joining the CPTPP, but last year you visited Taiwan, and Taiwan and China are both seeking membership in the CPTPP. So, if the UK becomes a member of the CPTPP first, which would allow it a vote to admit new parties, what would happen?
That’s a hypothetical question. Right now, we have to focus on the UK joining and I think it’s also strongly in Vietnam's interest for the UK to join. We want Vietnam to be our best friend in the world trading system. I think Vietnam supports the UK because your country wants to grow the size of the agreement. Vietnam will then be right at the center of a growing movement for global free trade.
Vietnam is reporting a trade surplus with the UK. What are the pros and cons of this and how can we resolve any problems that arise in the future between the UK and Vietnam?
I don’t think there will be any trouble. We do about £6 billion [US$7.3 billion] of trade with Vietnam now. I think there's big potential for growth for UK exporters to Vietnam. That figure shows huge potential. We think that we can sell more quality UK expertise, such as education, renewable energy, and financial services. The UK is very good at these three things, which I think Vietnam has a big demand for, particularly as you move toward net-zero emissions by 2050. The need for English language education is very strong in Vietnam. The UK, obviously, is the world's best provider of English language education, and London has incredible capability in financial services.
In terms of Vietnam selling to the UK, the obvious growth is agriculture exports thanks to the free trade agreement between us which came into effect in 2021. There has been a substantial rise in quota. Vietnam does not sell more rice, electronics, and footwear. Vietnam is gradually moving up the value chain with more complex products, more services, and more advanced technology products.
The trade agreement has gone well. I think quite a few people are used to using it and finding it helpful. I've not heard any complaints from any companies about how it's working. We can always make sure that the UK government and the Vietnamese government engage to improve trade between us. That's why I am here.
This year, we celebrate 50 years of diplomatic relations. What’s your vision for the future of the UK-Vietnam relationship?
The UK and Vietnam are natural partners. We're good fits for each other. We have a common view on global free trade.
It’s a fantastic achievement to have 50 years of diplomatic relations. We've done a lot of work. I have done a lot of work and a lot of people have done a lot of work to make sure that we get to a better place. We want to make sure that Vietnam's energy system is resilient to be sustainable.
The UK has the world's largest installed offshore wind capacity and that is the expertise that we are looking to bring to Vietnam, which has got amazing resources to be able to use offshore wind. People-to-people contact is important too. A large number of Vietnamese students are studying in British universities. British schools and universities are setting up here. I went to one in Da Nang a few years ago.
The strategic partnership was signed in 2010. I was here with the foreign secretary in 2020 to move that strategic partnership to the next 10 years. Now, it is still a very, very strong strategic partnership. That relationship is built on trade, on energy cooperation, on education, financial services, food and drinks being exchanged between our two countries. It will be a strong foundation for another 50 years of UK-Vietnam diplomatic relations.
Thank you for the discussion!
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