Far away from Britain is the Southeast Asian country Vietnam. So, how is this republic likely to get affected by a deal that involves European countries? The answers to that question will be discussed as the connection between Brexit and Vietnam is brought to light.
Britain’s planned exit from the European Union has raised many questions, and has led to a number of major political changes, especially in the United Kingdom. Will it also have an impact on Vietnam in any way—politically, economically, socially, et cetera?
There are three areas to look into. The first is concerning the yet to be ratified trade agreement between Vietnam and the EU. Brexit negotiations appear to be causing the delay since Brussels has put much of its focus on sealing the deal with the UK.
The second area is the economic implications for Britain. If the Brexit deal is ‘all said and done’, then the prices of some European products would go up. What this means is that UK consumers would have to consider cheaper alternatives like the Vietnamese market.
The third area is the need for Britain to establish new trade agreements with other countries once it is no longer a member of the EU. A likely option would be to enter into a deal already signed by Hanoi; the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Britain showed an interest in being a part of the deal in 2018, even though it was originally meant for countries around the Asia Pacific.
Brexit will affect Vietnam positively if it ever happens. The former is a member of the (CPTPP) with the lowest GDP per capita, so it would be a good turn of events for the country if Britain were to join the fold. The United States left the group in 2017 following President Donald Trump’s resolve.
As stated earlier, Britain may have to turn to the Vietnamese market for cheaper goods than the ones offered by other European countries. Britain’s EU exit is a highly beneficial economic prospect for Hanoi.
Looking at the failed attempts by Vietnam and the EU to close the free trade deal (EVFTA), it appears that the former will have to be patient till Brussels reaches an agreement with the UK. It could be a long wait just like how long the EVFTA has been stalled. Brexit negotiations have been underway since June 19, 2017. Hopefully—for the benefit of the Southeast Asian country—it will come into effect in 2020. This is in view of the new withdrawal date (January 31) that was set on October 28, 2019.
It was predicted that the UK would vote on activating the EU-Vietnam Free Trade Agreement in January, 2020. However, in view of the aforementioned withdrawal date, it seems the vote will come in later months. The possibility of it happening in later years cannot be ruled out.
Vietnam cannot keep its economic plans tied to the much awaited EVFTA and Brexit. It may have to consider other options: taking its desire to establish cooperative agreements elsewhere.