British one pound sterling coins. The pound plunged to a more-than-30-year low against the dollar on Friday. The pound devaluation would make Vietnamese goods more expensive in the United Kingdom market. — Photo Getty Images
Viet Nam News
HÀ NỘI – Great Britain’s exit from the European Union (EU) will not immediately affect trade relations between Việt Nam and the country, an official from the Central Institute for Economic Management (CIEM) said.
Dr. Trần Toàn Thắng, deputy director of Business Environment and Competitiveness Department of CIEM, however, told Việt Nam News today after Britain voted to leave the EU, “The pound devaluation would make Vietnamese goods more expensive in the United Kingdom (UK) market, therefore, Việt Nam’s export to UK might be affected in the long-term.” The pound fell more than 10 per cent against the dollar to levels last seen in 1985, its biggest one-day fall in history.
In 2015, the bilateral trade of the two countries reached US$5.4 billion. Of the total two-way trade, Việt Nam exports $4.876 billion worth of goods, producing a huge surplus for the country.
According to Thắng, Việt Nam’s exports to the UK account for only 10 per cent to 12 per cent of the total export volume to the EU with key products including garments, footwear and seafood. Meanwhile, the UK’s exports to Việt Nam include machine components and pharmacy products.
"A direct impact on the Vietnamese economy would not be substantial because of the minimal trade volume, but Brexit could bring down the country’s expectations in the UK market, especially in key export products,” Thắng said.
He explained that the benefits from the conclusion of negotiations on the Việt Nam - EU Free Trade Agreement (EVFTA) would now exclude the UK.
“But Việt Nam could sign a bilateral free trade agreement with the UK based on the existing negotiations,” Thắng said.
Besides, he said, it would be very important to closely watch the European Central Bank’s move to see whether it adjusts the euro exchange rate.
“So, the exact impact from Brexit on Việt Nam’s trade and economy cannot be determined right now,” Thắng said. – VNS