(VOVworld) – The UK leaving the EU has greatly impacted the world economy. The EU is currently Vietnam’s second biggest export market with an annual turnover of 30 billion USD. It is also one of Vietnam’s biggest investors and partners. Economists say Brexit could have a significant impact on Vietnam’s economy but in the long term it could open opportunities for the domestic market. They recommended that Vietnam make prompt policy adjustments to stabilize the economy.

The Pound Sterling and the Euro lost value against the US dollar following Brexit. The Pound fell from 1.5 USD to 1.33 USD. This will affect Vietnam’s exports because most of its contracts are paid in US dollars, which will make Vietnamese products in the EU more expensive. Nguyen Tu Anh of the Central Institute for Economic Management said there will be fluctuations on the monetary market, prompting a number of countries including Vietnam to adjust their exchange rates: “Vietnam should be careful in adjusting the exchange margin rate, which currently at 3%. If the exchange rate on the market reaches its ceiling, then the basic rate should be adjusted. Vietnam’s exports in the first 5 months of the year decreased slightly so I think appropriate solutions are needed to achieve our 10% growth target.”

Brexit will also affect the implementation of the FTA Vietnam and the EU signed in 2015. Economist Can Van Luc said there are two possibilities: one is that the UK will withdraw from the Vietnam-EU FTA and it will take time for some commitments to be adjusted. The second possibility is that the UK will continue in the FTA even though it is no longer an EU member. Luc said that given either possibility, implementation of the FTA will be later than 2018: “All procedures are supposed to be reviewed and completed for the signing of the agreement this year. But as the EU and the UK are busy with Brexit, this process will be delayed. I hope that negotiation conditions and agreement clauses will not change. Otherwise it will take more time for the parties involved to complete all necessary procedures.”

Trade and investment cooperation between Vietnam and the UK has grown steadily since they established a strategic partnership in September, 2010. In the long run Brexit could be an opportunity for Vietnam to diversify its export market and boost relations with other Asian countries. In addition to maintaining its exports to the EU, Vietnam will have to promote its export products and improve their quality towards securing a firm foothold in the UK market.