Brexit to definitely have impacts on Vietnam garment and textile exporters due to the devaluation of the pound and the euro, which influence prices as Vietnamâ€™s garment exports to the EU account for approximately 20 percent of the total volume with the UK contributing around 4 percent, Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (Vinatas), said.
According to Giang, material prices will have to be re-negotiated due to changes in the exchange rate, which will have direct influence on enterprises from the fourth quarter this year, leading to the disruption of orders in 2017.
The purchase power of British and European consumers will change as well.
In addition, the Vietnam-European Union (EU) Free Trade Agreement is likely to be reconsidered, so how much influence Brexit will have on Vietnam remains unclear.
In the short term, Brexit will have immediate impacts on the sectorâ€™s production and sale as well as the jobs of Vietnamese workers, eventually influencing export growth rate to the EU this year.
In order to limit the impacts caused by Brexit, enterprises who are exporting to the UK and EU markets need to place more focus on traditional markets like the United States, the Republic of Korea and Japan as well as trying to expand their share in new markets like Russia and Eastern Europe with new lines of products.
Enterprises also need to build supply chains to make full use of signed free trade agreements and diversify products for both traditional and new markets.
Besides, enterprises should take a cautionary approach when negotiating with the remaining importers in the EU to minimize the impacts from the UKâ€™s decision to leave the EU.
As far as the government is concerned, the government needs to accelerate the process of signing trade agreements with the remaining members of the EU. The Government also needs to hold talks with the UK on differences between the Vietnam-UK FTA and the Vietnam-EU FTA, and promptly inform enterprises of the matter.
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