Tuna exporters from Vietnam are likely to face fiercer competition from other players in the United Kingdom due to Brexit, Vietnam Association of Seafood Exporters and Producers (VASEP) said in a statement on Wednesday, 26 February.
The U.K formally left the European Union on 31 January, 2020, after 47 years of membership. The departure will make exports of products from Vietnam to the U.K. become more difficult as the Southeast Asia nation will no longer enjoy low duties in the U.K. compared to other E.U. markets, VASEP said.
The European Parliament on 12 February endorsed a free trade agreement with Vietnam that will abolish almost all customs duties between the two sides over the next 10 years. The deal is expected to be approved by Vietnam’s National Assembly in May 2020 and is set to take effect starting in July of this year.
VASEP said it hopes tuna exports from Vietnam to the U.K. during the transition period of Brexit – which is expected to last until the end of this year – will continue as normal.
Exports to the U.K., however, are likely to face headwinds starting in 2021, as tuna products from Vietnam will face an import tariff of as high as 24 percent, while some others are not. For example, Ecuador has already signed a trade deal with the U.K. under which import taxes on 95 percent of the former’s tuna products are abolished. Other major tuna suppliers to the U.K., including Papua New Guinea and Peru, have held talks with the U.K. side and are expected to ink deals soon.
VASEP also said Brexit is likely to make tuna more expensive in the U.K. market due to the possible depreciation of the British pound against the U.S. dollar and the euro. The fact that there is no tuna processing facility in the U.K., and all tuna products come from imports, may also make tuna a more expensive commodity for local consumers.
After growing for three consecutive years starting in 2016, exports of tuna from Vietnam to the U.K. fell 1 percent year-on-year to more than USD 7 million (EUR 6.4 million) in 2019.
Last year also saw the U.K.’s total imports of tuna decline 2 percent in volumes and 8 percent in value, which was attributed to negative impacts Brexit placed on consumer confidence in the country, VASEP said.
In 2019, Vietnam exported tuna worth USD 140 million (EUR 129 million) to the E.U., down 12 percent from 2018.
According to VASEP, the E.U. reduced the tuna imports from countries which are levied high taxes such as Vietnam and Thailand, while increasing imports from suppliers being imposed lower duties such as Seychelles, Mauritius, and the Philippines.
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