VietNamNet Bridge - Vietnamese economists have said that Brexit will have an impact on Vietnam trade, but it will not be significant. 

Vo Dai Luoc, former head of the World Economics and Politics Research Institute, citing a General Department of Customs (GDC) report, said two-way trade increased in the last few years, while Vietnam maintained a trade surplus with the UK. 

Vietnam’s export turnover to the UK obtained compound annual growth rate of nearly 17 percent in 2008-2015, reaching a record high of $4.65 billion in 2015, or 15 percent of Vietnam’s export value to the European Union (EU).

Maybank Kim Eng Securities Company’s (MBKE) researchers said the UK was not a big partner, both political and economic, for Vietnam.

Though Vietnam’s exports to the UK have been growing strongly in recent years, turnover accounted for only 2.5 percent of total export turnover in 2015.

Vietnam’s export turnover to the UK obtained compound annual growth rate of nearly 17 percent in 2008-2015, reaching a record high of $4.65 billion in 2015, or 15 percent of Vietnam’s export value to the European Union (EU).

Nearly 47 percent of Vietnam’s exports to the UK are mobile phones, computers and electronic parts. 

The export of these products depends on the success or failure of new products launched by the world’s big manufacturers such as Samsung, Sony, Toshiba and Foxconn, rather than on trade agreements between Vietnam and the EU or Vietnam and the UK.

Meanwhile, the other export items to the UK, including textiles & garments, footwear and wooden products, will not be affected much. Imports from the UK account for 4 percent of total import turnover.

MBKE, however, cited the prospect of the free trade agreement (FTA) between the EU and Vietnam. Since the FTA has not been approved by the European Parliament, the negotiations may have to start again between Vietnam and the EU and separately with the UK.

Brexit is also believed to have an impact on the financial and monetary market.

Bui Ngoc Son from the World Economics and Politics Research Institute said Brexit may lead to the depreciation of the pound, which would make export products less competitive.

“The companies with high exports to the UK would suffer the most and they would have to think carefully when setting up export plans with exchange rate fluctuation,” he said.

Regarding investment, Son said: “As far as I know, the foreign direct investment (FDI) from the UK to Vietnam is not high, so the impact would not be big,” he said.

Meanwhile, PetroVietnam Securities predicted that Brexit would cause capital outflow from risky markets, including Vietnam.


Kim Chi