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INTERNATIONAL MARKETING The list of members, assigned tasks and their completion status: Name Student ID Completion Lê Trần Hoàng Trâm 2121013200 100% Lâm Ngọc Tường Vy 2121013345 100% Nguyễn Hữu Lan Anh 2121013612 100% Lê Thị Thanh Thúy 2121012798 100% Vũ Thùy Bảo Trâm 2121012406 100% Explain Asean free trade area, WTO, EVFTA 1.1 Asean free trade area: The ASEAN Free Trade Area (AFTA) was established in January 1992 to eliminate tariff barriers among the Southeast Asian countries with a view to integrating the ASEAN economies into a single production base and creating a regional market of 500 million people Most of the Southeast Asian region is now a free trade area, the first six signatories of the Common Effective Preferential Tariff scheme for the ASEAN Free Trade Area namely Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand (collectively referred to as ASEAN-6) Cambodia, Laos, Myanmar and Vietnam (collectively referred to as CLMV) are required to join AFTA upon being admitted to this block It is currently one of the largest free trade areas in the world The Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area requires that tariff rates levied on a wide range of products traded within the region be reduced to no more than five percent Quantitative restrictions and other non-tariff barriers are to be eliminated The elimination of tariffs and non-tariff barriers among the ASEAN members has served as a catalyst for greater efficiency in production and long-term competitiveness Moreover, the reduction of barriers to intraregional trade gives ASEAN consumers a wider choice of better quality consumer products The free trade area covers all manufactured and agricultural products However, 734 tariff lines in the General Exception List, representing about 1.09 percent of all tariff lines in ASEAN, are permanently excluded from the free trade area for reasons of national security, protection of human, animal or plant life and health, and of artistic, historic and archaeological value 1.2 WTO free trade area The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations — is the international organization whose primary purpose is to open trade for the benefit of all WTO is the only global international organization dealing with the rules of trade between nations At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments The WTO (World Trade Organization) has many Free Trade Areas (FTAs) established by member countries Here are some prominent WTO FTAs: NAFTA: The North American Free Trade Agreement is an FTA between the United States, Canada and Mexico, signed in 1994 CAFTA-DR: The Central America Free Trade Agreement-Dominican Republic is an FTA between the United States and Central American countries and the Caribbean Community, signed in 2004 EU-Korea FTA: Free Trade Agreement between the European Union and Korea, signed in 2011 TPP: The Trans-Pacific Partnership is an FTA between 12 countries, including Australia, Brunei, Canada, Chile, Korea, Mexico, Japan, New Zealand, Peru, Singapore, USA and Vietnam, signed in 2016 CPTPP: The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is a new version of the TPP after the US withdrew from it, still includes the remaining 11 countries and was signed ends in 2018 The WTO is run by its member governments All major decisions are made by the membership as a whole, either by ministers (who usually meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva) The WTO agreements are lengthy and complex because they are legal texts covering a wide range of activities But a number of simple, fundamental principles run throughout all of these documents These principles are the foundation of the multilateral trading system + Trade without discrimination + Freer trade: gradually, through negotiation + Predictability: through binding and transparency + Promoting fair competition + Encouraging development and economic reform There are a number of ways of looking at the World Trade Organization It is an organization for trade opening The goal is to help producers of goods and services, exporters, and importers conduct their business It is a forum for governments to negotiate trade agreements It is a place for them to settle trade disputes It operates a system of trade rules Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other 1.3 EVFTA free trade EU-Vietnam Free Trade Agreement (EVFTA) is a new generation FTA between Vietnam and 27 European Union member states EVFTA and Trans-Pacific Partnership (TPP) are two of the largest new generation free trade agreements that Vietnam's largest ever negotiated On December 1st, 2015, the negotiation rounds of EVFTA was officially announced to be concluded, and its official full text was published on February 1st, 2016 On June 26, 2018, EVFTA was split into two agreements, one is the Trade Agreement (EVFTA), and the other is the Investment Protection Agreement (EVIPA); at the same time officially ended the legal review process for the EVFTA Agreement In August 2018, the legal review process for EVIPA was also completed The two Agreements were signed on June 30, 2019 On January 21, 2020, the International Trade Committee of the European Parliament (INTA) approved the Agreement, the European Parliament on February 12, 2020 officially approved both agreements According to the European Commission, the agreements will provide opportunities to increase trade and support jobs and growth on both sides, through + Eliminating 99% of all tariffs + Reducing regulatory barriers and overlapping red tape + Ensuring protection of geographical indications + Opening up services and public procurement markets + Making sure the agreed rules are enforceable Key areas of commitment in EVFTA include: trade in goods, rules of origin, customs and trade facilitation, the Sanitary and Phytosanitary measures (SPS), The Technical Barriers to Trade (TBT), To sum up, the implementation of the EVFTA allows not only tariffs reduction, but also removes regulatory barriers and eases all aspects of the import/export process List the opportunities and threats when Vietnam became a member of Asean and WTO 2.1 Opportunities and Threats of being a ASEAN’s member 2.1.1 Opportunities: - Participate in all ASEAN activities Vietnam has the opportunity to participate in all ASEAN activities in various fields including economics, culture, education, and technology - Attract foreign direct investment As a WTO member, Vietnam is allowed to use 10 percent of its investment capital to develop the agricultural sector Joining the ASEAN Economic Community (AEC) and participating in free trade agreements with ASEAN's partners have provided both opportunities for Vietnam to attract foreign direct investment and serve as a bridge for Vietnam to access potential markets within and outside the region The most anticipated opportunity, not only for Vietnam but for all ASEAN countries, is investment and cooperation from large and developed economies The connectivity and establishment of a more unified and integrated ASEAN will make major investors see ASEAN as a common playing field, a shared workshop where there is a unified pool of resources, especially skilled labor at relatively lower costs Attracting more investment implies a faster and more active process of technology transfer - Expand the market Having a larger market is another advantage of the AEC through the liberalization of goods and services within the ASEAN region This will encourage larger business activities and investments in the region Increased foreign direct investment and economic activities in the region will naturally lead to an increase in insurance demand in Southeast Asia Vietnamese enterprises will invest more in production, business, and service activities in other ASEAN countries This presents a great opportunity for Vietnamese businesses to seize the chance to expand their market What is more, Vietnam has constantly improved its status in the world It was elected a non-permanent member of the UN Security Council for a two-year term from 2008 to 2009 This year, as ASEAN chair, it represented the group at the recent G20 summit in Toronto and last month, Ho Chi Minh city hosted the World Economic Forum on East Asia - Expand exports and contributes to the growth of Vietnam's economy The AEC helps to expand exports and contributes to the growth of Vietnam's economy ASEAN is currently Vietnam's leading and important trading partner, and it serves as a driving force for maintaining the country's growth and exports With the formation of the AEC, Vietnamese businesses can sell their products to ASEAN countries almost as easily as selling domestically This is a significant advantage for the movement of goods for businesses Moreover, import-export procedures will be streamlined, and the reform of rules of origin, aiming to allow businesses to self-certify origin, will create favorable conditions for businesses to facilitate the customs clearance of goods to ASEAN markets 2.1.2 Threats: - Compared to the original six ASEAN member countries One of the biggest challenges for Vietnam when joining the AEC is the development gap compared to the original six ASEAN member countries (ASEAN-6) - The issue of low labor productivity The second challenge for Vietnam is the issue of low labor productivity According to the International Labour Organization (ILO) report on labor productivity, Vietnam has the lowest labor productivity among the Asia-Pacific APEC region Compared to other ASEAN countries, the average labor productivity of Vietnamese workers is less than half of that in the Philippines, equivalent to workers in Thailand, and only workers in Malaysia Furthermore, the productivity of one worker in Singapore is equivalent to that of 15 workers in Vietnam - Challenge is the increasing competition The third challenge is the increasing competition faced by Vietnamese businesses With the promotion of trade liberalization within the ASEAN Economic Community (AEC), trade barriers and non-tariff barriers among member countries will gradually be eliminated Vietnamese export products will have to face competition from goods produced by other countries in the ASEAN market The formation of the AEC will create a common market without trade barriers, services, and capital barriers, thereby intensifying competition for Vietnamese businesses 2.2 Opportunities and Threats of being a WTO’s member Member countries utilize the WTO as a forum for the negotiation of trade agreements and as the arbitrator of trade disputes The WTO is often associated with the removal of trade barriers At the same time, the organization supports some such barriers, such as those designed to protect consumers, prevent the spread of disease, to serve as punishment for failing to follow WTO trade rules, or to assist developing markets In cases where barriers exist, the WTO encourages transparency and consistency Together, these forces increase predictability for outside businesses and investors 2.2.1 Opportunities - Can access to latest technological advances for national modernisation and industrialisation, enjoy ensured equal access to all member country markets Vietnam joins the WTO to avoid being solitary in the business world As a MFN status country, it is in conformity with the current trend of international trade and Vietnam’s interests of national construction and economic development Exports bring home capital to import advanced equipment and technologies and other products of an intellectual-based economy Being admitted to the WTO, the tariff barriers will be removed or reduced, so as the quotas Products that Vietnam has advantages such as textiles and garments, footwear, coffee, rubber, processed seafood, furniture, electronics appliances will have more opportunities on the world market - Attract foreign investment: Membership in the WTO has made Vietnam an attractive destination for foreign investors, particularly those looking to take advantage of the country's low-cost labor and favorable business environment - More transparent trade practices: The WTO focuses on transparency The WTO asks member states to set ceilings on tariffs for specific goods Admission to the WTO requires countries to adhere to certain rules and regulations, which can help to improve transparency and reduce corruption in international trade - Greater competitiveness: Once tariff barriers are reduced for removed and quotas abolished, there’re many opportunities for Vietnam to succeed in global marketplace By joining the WTO, Vietnam has been forced to become more competitive in order to succeed in the global marketplace This has led to improvements in productivity, efficiency, and innovation - Improved legal framework: The WTO membership has encouraged Vietnam to develop stronger legal and regulatory frameworks that are compatible with international standards, which can help to attract more foreign investment and create a more stable and predictable business environment 2.2.2 Threats - Integration but not dissolvent Vietnam integrates but has to maintain national identity as well as the regime’s identity, always following the policy of independence and self-reliance in economic development - Competition are more severe Once tariff barriers are reduced and quotas abolished, we have to be more competitive Products of low competitiveness can not be exported On the other hand they will be defeated by foreign products Thus, domestic businesses might face bankruptcy and the unemployment rate might rise - The difference in development level The development gap between Vietnam and the other ASEAN-6 countries is evident in various aspects such as the size of the economy's capital, the scale of enterprises, the level of scientific and technical advancements, and labor skills With the implementation of ASEAN Community Points since 2015, Vietnamese businesses are expected to encounter intensified competitive pressure from imported goods, products, services, and investments of other ASEAN nations, particularly when non-tariff barriers are lifted This may lead to certain industries having to downsize production or even cease operations altogether - Labor productivity One of the challenges faced by Vietnam is its low labor productivity The International Labor Organization (ILO) report on labor productivity indicates that Vietnam has the highest productivity in the Asia-Pacific Economic Cooperation (APEC) region However, compared to other countries in ASEAN, the average productivity of Vietnamese workers is less than half of that of Philippine workers and only one-fifth of Thai and Malaysian workers In comparison, one worker in Singapore is as productive as fifteen Vietnamese workers Many people assume that low productivity is advantageous because it is often linked to low wages However, the reality is more complex Low salaries are only attractive when they are lower than the actual productivity level, allowing employers to gain an advantage by paying lower wages Nevertheless, the cost of living in Vietnam has been steadily rising, causing wages to increase at a faster rate than productivity This trend has eroded the once significant advantage of cheap labor in the region References CƠ HỘI VÀ THÁCH THỨC CỦA VIỆT NAM KHI GIA NHẬP CỘNG ĐỒNG KINH TẾ ASEAN (n.d.) VNU Retrieved June 16, 2023, from https://repository.vnu.edu.vn/bitstream/VNU_123/97591/1/Nguyen%20Thi%2 0Tam.pdf Cộng đồng Kinh tế ASEAN - Cơ hội thách thức (2021, August 11) Báo điện tử Đảng Cộng sản Việt Nam Retrieved June 16, 2023, from https://dangcongsan.vn/thoi-su/cong-dong-kinh-te-asean-co-hoi-va-thach-thuc587865.html Duong, B (2010, July 11) Vietnam as WTO member – advantages and challenges Báo Bình Dương Retrieved June 16, 2023, from https://baobinhduong.vn/en/vietnam-as-wto-member-advantages-and-challenge s-a8851.html Ngozi Okonjo-Iweala (Director-General) (1995, January 01) WTO | What is the WTO? World Trade Organization Retrieved June 16, 2023, from https://www.wto.org/english/thewto_e/whatis_e/whatis_e.htm Vietnam’s joining WTO: opportunities and challenges (n.d.) Smartex Retrieved June 16, 2023, from https://www.smartex.com.vn/en/market-intelligence/vietnam/wto/76-vietnam-j oining-wto-opportunities-and-challenges WTO AND INTERNATIONAL TRADE CENTER VCCI – SUMMARY OF EVFTA (n.d.) Trung tâm WTO Retrieved June 16, 2023, from https://wtocenter.vn/file/18176/ttwto-tom-luoc-evfta-final eng.pdf