Britain and Vietnam sign trade agreement

Trade between the two countries reached £4.4bn last year

British Ambassador to Vietnam, Gareth Ward (L, front) and Vietnamese Ambassador to the UK, Tran Ngoc An show documents after they signed the UK-Vietnam Free Trade Agreement at the Foreign, Commonwealth and Development Office (FCDO) in London, Britain December 29, 2020. UK Government/Handout via REUTERS. ATTENTION EDITORS - THIS IMAGE HAS BEEN SUPPLIED BY A THIRD PARTY. NO RESALES. NO ARCHIVES.

The UK and Vietnam on Tuesday signed a free-trade agreement to take effect on December 31, the Vietnamese Ministry of Trade said.

The deal will replace the existing EU-Vietnam Free Trade Agreement for Britain after it completes its transition from the bloc on January 1.

Trade between Vietnam and Britain has risen by an average of 12 per cent a year over the past decade to reach £4.4 billion ($5.94bn) last year.

The deal will help to boost Vietnam's exports of garments, footwear, rice, seafood and wooden furniture, the ministry said.

Since leaving the EU in January, Britain has been negotiating new trade deals with countries to replace those the bloc had struck.

Tuesday's deal will ensure Britain does not lose access to preferential tariffs in one of the fastest-growing and most open economies in Asia.

The free-trade agreement with Britain has the same provisions as those of EU agreement, the ministry said.

That came into effect in August and was due to cut or eliminate 99 per cent of tariffs on goods traded between Vietnam and the bloc.

"The agreement will create a framework for comprehensive, long-term and sustainable economic co-operation between the two countries," the ministry said.