Nevertheless, even though a bare bones exit deal was agreed at the last minute and welcomed in some quarters, remaining issues for the UK economy are mounting as it forges new relationships with the rest of the world, including Vietnam.

British Ambassador to Vietnam Gareth Ward and Vietnamese Ambassador to the UK Tran Ngoc An signed the UK-Vietnam Free Trade Agreement in London on December 29, photo VNA

The United Kingdom’s post-Brexit trade deal with the European Union delivers a “historic resolution” that ensures the nation remains a “friendly neighbour” to the continent, Prime Minister Boris Johnson told MPs last week as they voted to approve the agreement.

In a speech to parliament, PM Johnson insisted that the deal sealed on Christmas Eve represents “how Britain can be at once European and sovereign”, as well as praising negotiators for securing it at such speed despite the ordeals caused by the pandemic.

A trade deal of this size is typically thrashed out over many years, but the strict timetable the UK placed on itself to leave the EU meant some sort of agreement had to be negotiated in just 11 months – months hampered by travel restrictions, self-isolating negotiators, and even the prime minister being hospitalised with the coronavirus.

A report by a multi-party Brexit committee said that the deal’s compressed timetable, not just for negotiating but also the meagre 5-hour debate over the details in parliament last week, was “unavoidable but concerning”.

“One concerning consequence of it being reached so late is that members of parliament have been left with very little time in which to read it,” the report said. “It was not subject to detailed scrutiny before a vote in the House of Commons, which is an unsatisfactory but unavoidable outcome.”

Major gaps to fill

Indeed, the final deal omits a raft of measures previously covered with the UK’s membership, and will have to be negotiated at length in the future. Main agreements that were reached include tariff-free and quota-free access for the UK to one of the world’s biggest markets; leaving the common fisheries policy; setting up its own state aid regime; and creating a minimum level of environmental, social, and labour standards below which neither the UK nor the EU must go. The latter point will be reviewed by the EU after four years to ensure a level playing field continues.

Despite many anti-EU campaigners insisting before and even after the 2016 vote that the UK would not have to leave the EU’s single market – which lets people, goods, services, and money move around freely – the British government in the end aimed for a so-called hard Brexit, meaning Brits can no longer travel, live, study, or work in the remaining 27 EU countries without jumping through as-yet-unspecified hoops.

The new deal also draws a blank in many other areas. It offers little clarity for financial firms, with no decision on so-called equivalence which would allow firms to sell their services into the EU’s single market from the City of London, according to Bloomberg. PM Johnson admitted to the UK’s Sunday Telegraph that the deal “perhaps does not go as far as we would like” on financial services.

Elsewhere, both sides only agreed a temporary fix to keep data flowing between them; the deal contains a long five-and-a-half year transition period for fisheries; and there remains a sticking point over Gibraltar, the British territory connected to mainland Spain – about 15,000 workers cross that border every day.

Of more concern for many in Britain is security. While the UK’s Home Secretary Priti Patel claimed that the Brexit deal actually made the UK safer, many security analysts disagreed. The Schengen Information System, for example, is a database that offers real-time alerts to track down terrorists and other criminals. British police previously accessed the system more than 1.65 million times every day – but now the country has severed use of the tool.

Despite the shortcomings of the deal, Europeans greeted the Christmas Eve achievement with some relief. Italy’s Corriere della Sera described it as “a Christmas present for everyone”, adding that in difficult times there is no room for hatred between friends.

Spain’s El Mundo noted that criticism was certain to follow closer scrutiny of the deal’s terms, and called the entire situation as damaging, but welcomed the result. “The small print remains to be seen – surely it will not satisfy anyone entirely – but the divorce will be consummated amicably after countless disagreements,” it said.

Germany’s business daily Handelsblatt meanwhile argued that the 11th-hour agreement would “mark the end of the Brexit movement” in the UK. With Britain’s departure complete, the practical realities of life on the bloc’s doorstep would lead to an organic strengthening of ties. “From now, the pendulum will begin to swing back the other way,” wrote its London correspondent, Carsten Volkery.

New horizons, new issues

Thanks to this severing of ties, the UK government has been rushing to sign new trade agreements with nations beyond the EU. On December 29, the country officially signed such deals with both Vietnam and Turkey.

Trade between Turkey and Britain was worth £18.6 billion ($25.18 billion) in 2019, and the UK is Turkey’s second-biggest export market, mostly for precious metals, vehicles, textiles, and electrical equipment. Although Turkey is not an EU member, it does have a customs union with the EU.

The deal with Turkey is the fifth-biggest free trade agreement the UK has negotiated after deals with Japan, Canada, Switzerland, and Norway. Trade agreements with 62 countries have now been signed in preparation for the UK’s formal exit from the EU single market.

The bilateral deal between the UK and Vietnam, meanwhile, took effect from 11pm on December 31, 2020. It locks in the benefits of both countries’ existing trading relationship under the EU-Vietnam Free Trade Agreement that took effect August 1, eliminating 99 per cent of import duties for both parties after seven years.

Due to pandemic restrictions, Vietnamese government representatives and Minister of Industry and Trade Tran Tuan Anh were not present to sign the deal, with the two governments authorising their ambassadors to fulfil the duty.

The UK is currently Vietnam’s third-largest trading partner in Europe after Germany and the Netherlands. Export industries expected to benefit most from the deal include rice, textiles, wood, vegetables, seafood, and footwear.

Minister Tuan Anh and UK Trade Secretary Liz Truss had previously signed a joint ministerial statement on the conclusion of the free trade pact negotiations on December 11.

Data from the Vietnamese General Department of Customs showed that the total import-export turnover of the two countries reached $6.6 billion last year, of which exports stood at $5.8 billion and imports $857 million. In the 2011-2019 period, the growth rate of bilateral export-import turnover increased by an average of 12.1 per cent each year.

Recently-made deals with the likes of Vietnam, Turkey, and also Singapore and Japan not only lock in billions of pounds’ worth of trade, “they also pave the way for new digital partnerships and joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership,” Truss said last month. “This will play to the UK’s strengths, as we become a hub for tech and digital trade with influence far beyond our shores, defining our role in the world for decades to come.”

Evidently, the British government steadfastly believes it can make a huge mark on the globe without the EU’s backing. Even those opposed to leaving in the first place now want to concentrate on future challenges.

Keir Starmer, leader of the UK government’s opposition, the Labour Party, said he wanted to become a future prime minister focused on looking forward and not back, saying it was unlikely Europe would even feature in any election campaign. He instead wanted Britain to look to improve the economy and protect the National Health Service (NHS).

The NHS is currently under strain thanks to a new variant of the coronavirus ripping through England, with more staff forced to self-isolate and hospital beds becoming scarcer.

Political commentators believe that if and when the pandemic is finally eradicated, the country’s next major issue could be the existence of the UK itself, as an increasing number of voters and politicians in Scotland clamour for a new referendum on Scottish independence, after narrowing rejecting the idea in 2014.

“Two-thirds of Scots under the age of 45 now say they back independence, and a dozen opinion polls in recent months have each reported a majority in favour of it. The trend is clear,” wrote Alex Massie for The Spectator magazine last month. “It is not difficult to find ardent unionists who whisper that they think the UK has run its course. The precise timing of its formal dissolution may as yet be unknown, but the direction of travel is impossible to ignore.” VIR

Quang Bao

UKVFTA creates more room for bilateral trade links

The UK-Vietnam Free Trade Agreement (UKVFTA) will open the door wider for bilateral economic and trade ties and help form a solid foundation for their strategic partnership to reach a new height.

UKVFTA ushers in a bright future for UK – VN ties, ensures smooth post-Brexit trade

The UK – Viet Nam Free Trade Agreement (UKVFTA) was officially signed in London on December 29.