Exploring Strategies to Strengthen Vietnam-UK Trade Relations

The bilateral trade between Vietnam and the UK has seen a steady rise in recent years.

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Thai Tran, Managing Director of TT Meridian. Photo courtesy of Thai Tran
Thai Tran, Managing Director of TT Meridian. Photo courtesy of Thai Tran

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This route will facilitate the transportation of goods between the two countries, reducing the cost and time of delivery.

Thai Tran, the Managing Director of TT Meridian – an international logistics and trading company specializing in the UK and Vietnam markets – has highlighted the great potential for Vietnamese goods to enter the UK market. To further this effort, TT Meridian has become the first Vietnamese business to open an all-cargo air route between the two countries via Turkmenistan, as reported by VNA on Friday, May 26th, 2023. By creating this route, the cost and time of delivery will be significantly reduced, creating a more efficient and cost-effective process for transporting goods between the two countries.

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In a recent interview, a leading business executive has revealed that trade exchange between nations has experienced an incredible surge in recent months, despite the devastating economic fallout of the Covid-19 pandemic. The executive noted that this trend is an encouraging sign of strength and resilience for the global economy.

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Data released by the UK Department for Business, Energy and Industrial Strategy (BEIS) has shown that Vietnam’s export turnover of goods and services to the UK surged to €5.9 billion (USD 6.33 billion) in 2022, recording a remarkable year-on-year growth of 30.3%.

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The UK is Vietnam’s largest trading partner in Europe, accounting for 17% of the country’s total imports. Trade between the two countries has been growing rapidly, with double-digit growth in exports and imports almost every year since 2010.

Vietnam is currently a major trading partner of the UK in Southeast Asia, ranking as the second-largest and 40th largest in the world in terms of trade value. In fact, the country’s total trade value accounts for an impressive 0.4% of the UK’s total trade value. Moreover, the UK is Vietnam’s largest trading partner in Europe, accounting for a significant 17% of the country’s total imports. Trade between the two countries has been growing rapidly, with double-digit growth in exports and imports almost every year since 2010, further strengthening the economic partnership between the two countries.

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Thai Tran emphasised the huge potential of the flourishing relationship between Vietnam and the UK, stressing that the current promising figures have yet to reflect this potential. He highlighted the opportunity for both nations to capitalise on this relationship.

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He offered a range of suggestions for Vietnamese businesses to increase their exports to the UK, including offering more competitive prices, obtaining ESG-related certifications to demonstrate their commitment to sustainability, and utilizing cutting edge technologies for increased information transparency, document standardization, and cost reduction.

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Moreover, TT Meridian has made history by becoming the first Vietnamese business to launch an exclusively cargo air route between Vietnam and the UK, via Turkmenistan. This momentous occasion marks a significant milestone in the two countries’ trade relations, and is expected to have a substantial effect on the exchange of goods between them.

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A Turkmenistan Airlines cargo plane at London Stansted Airport is about to fly back to Vietnam, transiting Turkmenistan. Photo: VNA
A Turkmenistan Airlines cargo plane at London Stansted Airport is about to fly back to Vietnam, transiting Turkmenistan. Photo: VNA

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The establishment of the first all-cargo air route between Vietnam and the United Kingdom will undoubtedly be a major boon to bilateral trade activities. The implementation of the UK-Vietnam Free Trade Agreement (UKVFTA) in May 2021 further enhances the potential for increased trade opportunities between the two countries. This new air route will provide a much-needed asset for businesses seeking to expand their trading activities between the two nations.

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Under the United Kingdom-Vietnam Free Trade Agreement (UKVFTA), both governments are committed to fostering trade and economic development by significantly reducing or eliminating import duties on a broad range of goods, eliminating trade barriers, and creating an even more conducive business environment. This agreement promises to open up the potential for both countries to expand mutually beneficial trade and bolster economic prosperity. Through the implementation of this agreement, businesses in both countries will gain greater access to the markets of each other, enabling them to better capitalize on the advantages of trading with one another. Not only will this agreement lead to increased economic growth for both countries, but it will also help create more job opportunities, further strengthening their economies.

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Thai Tran, the cargo sales agent handling the UK to Vietnam leg, expressed his delight upon the announcement of a new flight route. “This will certainly provide exporters, importers, and freight forwarders with an increased range of options, compared to the direct and indirect services already present in the market,” he said. “We strongly believe that this is an incredibly positive development for those involved.”

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Thai authorities are expecting the new UK-Vietnam all-cargo flight to open up a wide range of possibilities for the two countries. Not only will the flight enable a higher frequency of two-way all-cargo flights, but it will also facilitate an increase in goods traded between the two nations, resulting in further economic growth. Furthermore, the flight promises to provide a more efficient and timely delivery of goods, ensuring that both countries can benefit from the advantages of international trade.

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Thai Airways recently announced the launch of a new all-cargo service, which utilises the powerful A330 aircraft. This aircraft is capable of carrying up to 30 tonnes, providing shippers with the ability to send larger shipments that cannot be accommodated on passenger flights. With this new service, Thai Airways is now better equipped to meet the needs of its customers, allowing them to transport their goods more efficiently.

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Starting from May, passengers can take a flight from London Stansted Airport to Turkmenistan’s Ashgabat International Airport on Wednesday evenings. The total transit time is about four hours, after which they will depart again from Ashgabat International Airport on Thursday morning and reach Noi Bai International Airport in Hanoi in the afternoon of the same day, local time.

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The return flight departs from Hanoi on Thursday evening, with an estimated transit time of 5-6 days, and arrives at London Stansted Airport the following Wednesday morning. The journey will take you through the week, with the final destination being reached early on Wednesday morning. This allows you plenty of time to explore the sights and sounds of London before returning home.

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TT Meridian, in partnership with Turkmenistan Airlines, Swissport, and ACSV (the ground handling agents in London and Hanoi respectively), has successfully operated a few trial flights in the past few weeks. This strategic alliance has opened up new opportunities to provide a fast and cost-effective connection between the UK and Vietnam. The quick connection time in Turkmenistan, which is the transit point between the two countries, and the competitive air freight rates make this an attractive option for freight forwarders, shippers, and consignees, particularly during these challenging economic times.

Hannah Nguyen