Manufacturing in Vietnam could be a “big winner” in Brexit, according to one consulting firm with long roots in Asian and Western manufacturing.
Dezan Shira & Associates, a Hong Kong-based consulting firm, believes the political chaos of Brexit will give Vietnam a key advantage as an Asia manufacturing location, since it already has a free trade agreement signed and awaiting implementation with the European Union.
Most of the other nations of emerging Asia, by contrast, have made little progress in their ongoing trade talks with the EU. And the current Eurozone turmoil means that won't change.
“Vietnam is likely to be the big winner in the face of Brexit,” the firm said in a June 24 analysis. “Lagging EU trade negotiations with other member states [in the ASEAN bloc] will make the communist nation one of the most exciting opportunities for low cost investment from a European perspective.
“Given its unique position in low cost manufacturing, Vietnam will likely be more competitive than ever among European consumers,” the firm said. “The longer that negotiations are drawn out in other ASEAN states, the more solidified Vietnam's advantage will become.”
Chris Devonshire-Ellis, the founding partner of Dezan Shira, echoed that in a separate June 27 essay. He noted that China, India and the rest of Association of Southeast Asian Nations have not moved ahead with their free trade negotiation talks with Europe.
“Free trade discussions with ASEAN and India have been ongoing for most of the past decade with little tangible progress, while discussions with China over the past four years have still not even been able to determine what the discussions should actually be about,” he wrote.
Devonshire-Ellis, a British national, sees Brexit as a positive for the U.K., if the country can properly manage to pivot its trade policies to Asia.
The European Union, he says, has become too focused on territorial expansion into the former Soviet bloc, at the expense of other priorities.
He headlines his piece: “Brexit Shows UK Has Turned its Trade Face Towards China, India & the East”
It seems safe to say no one really knows what the impact of Brexit will be.
But Devonshire-Ellis offers a provocative conclusion. Considering the growth of manufacturing markets in Asia, a point well known to the plastics industry, his points are an interesting counter to the gloomier analyses of Brexit's impact.
