THE IMPACT OF BREXIT ON VIETNAM'S TUNA EXPORTS

Date post :26/02/2020 - 8:56 AM

After growing continuously for 3 years since 2016, British tuna imports from Vietnam in 2019 decreased. Vietnam's tuna export value to the UK in 2019 was only over 7 million USD, down 1%. Along with that trend, the UK is also reducing imports of tuna from other countries. According to statistics of the International Trade Center (ITC), UK tuna imports in 2019 decreased both in volume (down 2%) and in value (down 8%). The reason for this decline is partly because the UK leaves the European Union (Brexit), which has affected the confidence and behavior of British consumers.

According to the EU notice, from 23h (UK time) on 31/01/2020, the UK officially left the European Union after 47 years of membership and entered the "transition period" until the end of 2020. During this period, the UK remained a member of the EU market and joined the EU Customs Union (EUCU).

During the transition period, everything remained the same, but the UK did not have the right to participate in EU policies and guidelines. This means, from now until December 31, 2020, seafood export activities in general, tuna in particular between Vietnam and the UK still take place as usual and there will be no major disturbance.

If EVFTA is approved and smoothly applied as expected, trade activities between Vietnam and the UK will have 7-8 months of EVFTA preferential treatment. Therefore, the impact of Brexit on Vietnam - UK trade relations in 2020 is not much.

In 2019, the UK is currently the 7th largest import market for Vietnamese tuna. Among tuna products, fresh and frozen tuna is the main export product of Vietnam to this market, accounting for 88%. Compared to 2018, Vietnam's exports of this product group to the UK are increasing by 3%, while processed and canned tuna exports are down 24%.

According to the analysis of experts, the UK leaving the EU will cause both the pound and the EUR to depreciate. The devaluation of the pound, British buyers need to spend more money to buy products, especially true for imported tuna because trade is being done in USD or EUR. Moreover, the UK does not own any tuna processing and importing facilities, with the majority of canned tuna shipments coming from outside the EU. This makes tuna products exported to England will have higher prices and competition will be more difficult.

Moreover, there is an additional problem of 24% tax rate for imported tuna products from exporting countries when the UK leaves the EU. Currently, only Ecuador has signed a new trade agreement with the United Kingdom (UK), allowing 95% of Ecuador's products including tuna to be imported into this country exempt from taxes. This will happen when Britain leaves the European Union (EU). Meanwhile, tuna products from other countries will be subject to much higher taxes. Therefore, countries exporting tuna to England such as Papua New Guinea, or Peru, are all big suppliers of tuna, have negotiated a trade agreement with the UK, and are about to sign. This is expected to create a trend of tuna import growth into the UK from countries with preferential tariffs, reducing tuna imports from countries that are subject to high taxes such as Vietnam.

Thus, after the Brexit, tuna export to England is expected to be more difficult. Not only that, in the context of technical barriers, food safety, British traceability with imported goods into this country is also increasing, but Vietnamese businesses also want to boost exports to the UK, need to adjust the war. production strategy to meet market requirements.


Source: vasep.com.vn

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