Hanoi (AFP)

The UK and Vietnam signed a free trade agreement on Friday, the second London has reached in two days in Southeast Asia, as post-Brexit negotiations bogged down between Europeans and Britain.

The trade deal with Vietnam, which will come into effect on January 1, 2021, is the UK's third in Asia, after one with Singapore on Thursday and another in October with Japan.

The country has also agreed to an interim trade agreement with Canada.

Under the treaty signed on Friday, Vietnam will benefit from 114 million pounds (125 million euros) in tariff reductions on its exports, while UK exports will be cut by 36 million pounds in taxes, with 99% tariffs eliminated once the agreement is fully implemented.

UK International Trade Minister Liz Truss and Vietnamese Trade Minister Tran Tuan Anh finalized the deal on Friday that will replicate the deal the country enjoyed as an EU member state.

"This will certainly give impetus to reforms in Vietnam," the Vietnamese minister told reporters.

"British investors and entrepreneurs, just like their partners in Vietnam, will have the opportunity to take part in the restructuring and investment process in Vietnam, to form new supply chains."

Ministers expect the deal to further boost bilateral trade, which tripled between 2010 and 2019 to reach $ 7.5 million (€ 6.2 million).

Vietnamese consumers "will be animated by the arrival of flagship brands such as Marks and Spencer, Boots, or the Waitrose and Tesco supermarkets. The private health sector and that of educational establishments should also become more important", notably stressed to AFP John Walsh of the Royal Melbourne Institute of Technology Business School in Hanoi.

Analysts say the deal is expected to boost UK trade in the pharmaceutical, automotive and parts sectors.

Liz Truss pointed out that the deal would bring the UK closer to the Trans-Pacific Free Trade Agreement (CPTPP).

"The CPTPP (Comprehensive and Progressive Trans-Pacific Partnership) is important for the United Kingdom, firstly because it will give us (...) access to a market of 9 trillion pounds, but also because it will help the country to diversify its supply chain more widely and to become more resilient, ”she said.

Eleven countries signed this agreement, which entered into force at the end of 2018, including Australia, Canada, Chile, Japan, Mexico, Singapore and Vietnam.

It constitutes the new version of the Trans-Pacific Free Trade Pact (TPP) which had been abandoned by US President Donald Trump.

© 2020 AFP