C H A R A C T E R I S T I C S A N D I M P A C T S O F F T A I N I N T E R N A T I O N A L T R A D E GROUP 8 HOÀNG KHÁNH LINH 19071402 PHẠM NGUYỆT NHI 19071455 TRẦN THU HUYỀN 1907184 HOÀNG VĂN PHONG 19071467 Table of Contents I Introduction II Characteristics of FTA in international trade III Impacts of FTA IV Main advantages and disadvantages of FTA V Vietnams Free Trade Agreements VI Case study VII Conclusion Free Trade Agreement (FTA) is understood as economic cooperation agreements signed be.
CHARACTERISTICS AND IMPACTS OF FTA IN INTERNATIONAL TRADE GROUP HOÀNG KHÁNH LINH - 19071402 PHẠM NGUYỆT NHI -19071455 TRẦN THU HUYỀN - 1907184 HOÀNG VĂN PHONG - 19071467 Table of Contents I Introduction II Characteristics of FTA in international trade III Impacts of FTA IV Main advantages and disadvantages of FTA V Vietnam's Free Trade Agreements VI Case study VII Conclusion I INTRODUCTION Free Trade Agreement (FTA) is understood as economic cooperation agreements signed between two or more members in order to remove barriers in import and export and promote trade between member countries Remove the majority of tariff barriers The reduction in trade barriers and changing trade patterns caused by liberalization may adversely affect the terms-of-trade of a country Limited to trade and investment Contents are not direct trade but related to trade: BIDDING ENVIRONMENT INTELLECTUAL PROPERTY LABOR East Asia FTAs provide incomplete coverage of sectors and are likely to lead to inefficient resource allocation Regional trade agreements of East Asian countries are free trade agreements, and not a customs union COMMITMENT TO FLEXIBILITY The roadmap for tax reduction has been accelerated Normally, the roadmap to eliminate tariff barriers is applied within 5-10 years HIGH REQUIREMENTS FOR MONITORING MECHANISM FTAs allow an importing party to suspend preferential tariff treatment if origin fraud is detected or the exporting country fails to cooperate in systematic origin verification Impact of FTAs Short-term Long-term Domestic products, trade creation, trade diversion Domestic products, economiies of scales, foreign investment FTAs may lead to replacement of some domestic production by Imports from more efficient suppliers of FTA partner countries Formation of the FTA has made it cheaper to import rather than produce domestically Trade diversion is said to reduce economic welfare because resources are being diverted from an efficient producer to a less efficient producer Short-term impact Long-term impact: FTAs may lead to increased efficiency of domestic production on account of increased com-petition from FTA partners Economies of scale, as producers now can serve domestic and FTA part-ner country market at preferential duty Possibility of Increased foreign investment from outside the FTA partner countries Main advantages and disadvantages of an FTA ADVANTAGES Increased Economic Growth: In 2003, the U.S International Trade Commission estimated that NAFTA could increase U.S economic growth by 0.1% to 0.5% The USMCA - modern trade agreement recognizes the influence of technology on economies It changed many original NAFTA rules and processes but also kept others intact Lower Government Spending: Many governments subsidize local industries After the trade agreement removes subsidies, those funds can be put to better use Technology Transfer: Local companies also receive access to the latest technologies from their multinational partners As local economies grow, so job opportunities Multinational companies provide job training to local employees " DISADVANTAGES Increased Job Outsourcing: Reducing tariffs on imports allows companies to expand to other countries Many U.S manufacturing industries did lay off workers as a result of NAFTA Theft of Intellectual Property: Many developing countries don't have laws to protect patents, inventions, and new processes The laws they have aren't always strictly enforced As a result, corporations often have their ideas stolen They must then compete with lower-priced domestic knock-offs " DISADVANTAGES Poor Working Condition: Multinational companies may outsource jobs to emerging market countries without adequate labor protections Women and children are often subjected to grueling factory jobs in sub-standard conditions Degradation of Natural Resources Free trade leads to the depletion of timber, minerals, and other natural resources FTA threaten native populations as well As development moves into isolated areas, indigenous cultures can be destroyed Local peoples are uprooted Many suffer disease and death when their resources are polluted Vietnam's Free Trade Agreements The FTAs that Vietnam has joined include Vietnam - Japan Economic Partnership Agreement (VJEPA): This is the first bilateral FTA of Vietnam, signed on December 25, 2008 and took effect from October 1, 2009 Vietnam - Chile Free Trade Agreement (VCFTA): was signed on 11/11/2011 and took effect from 01/01/2014 This is Vietnam's first FTA with an American country Vietnam - Korea Free Trade Agreement (VKFTA): was signed on May 5, 2015 and officially took effect on December 20, 2015 VKFTA does not replace AKFTA, but both of these FTAs are in effect and businesses can choose which FTA is more beneficial The FTAs Vietnam is negotiating include The Vietnam - EU FTA was launched in June 2012 in Brussels (Belgium), and has undergone 10 official sessions and many midterm sessions FTA Vietnam - Customs Union of Russia - Belarus - Kazakhstan, was launched in March 2013 After official negotiation sessions and many midterm meetings The last 10 years at the technical level, the two sides have agreed on the content of the Agreement with its comprehensive scope, high level of commitment and ensuring a balance of interests CASE U.S - Taiwan Free Trade Agreement: The Economic Case CASE SUMMARY IMPACT ON THE INTERNATIONAL TRADE CASE SUMMARY A formal trade agreement The United States and Taiwan signed a Trade and Investment Framework in 1994 Taiwan joined the World Trade Organization in significantly aided the growth in bilateral trade 2002 which Taiwan is a vital security partner with U.S., which would benefit from deepening ties on both fronts The next step in the economic relationship should be a formal trade agreement and the Biden Administration should make an FTA with Taiwan a top priority A free trade agreement with Taiwan would increase trade for both countries, increase U.S exports to Taiwan, and provide market-based alternatives to China The removal of quantifiable barriers would have a negligible impact on U.S production and GDP, but would have a small impact on Taiwan production and GDP An FTA between the United States and Taiwan would have positive economic effects for both countries The increase in trade for both countries has a mutual positive impact on economic growth Impact of FTA decisions on behalf of international trade It is is an opportunity for purely positive engagement in the Asia-Pacific and reinforce Taiwan Administration’s messaging with concrete policy that would benefit America economically and strategically To build on the growth in the existing trade relationship, securing a formal FTA should be a top priority CONCLUSION The development of FTA is associated with the development of world trade The information presented above clearly shows the importance of FTAs in promoting free trade, economic cooperation and investment The dramatic increase in the number of FTA signatories is a clear demonstration of is superiority Countries should update and capture information to understand the opportunities and challenges when participating in this agreement THANK YOU FOR LISTENING! If you have any questions, not hesitate to ask us GROUP ... development of world trade The information presented above clearly shows the importance of FTAs in promoting free trade, economic cooperation and investment The dramatic increase in the number of FTA. .. LINH - 19071402 PHẠM NGUYỆT NHI -19071455 TRẦN THU HUYỀN - 1907184 HOÀNG VĂN PHONG - 19071467 Table of Contents I Introduction II Characteristics of FTA in international trade III Impacts of FTA. .. terms -of- trade of a country Limited to trade and investment Contents are not direct trade but related to trade: BIDDING ENVIRONMENT INTELLECTUAL PROPERTY LABOR East Asia FTAs provide incomplete