School Of Economics, Finance, And Accounting Ba068Iu – International Economics.pdf

CURRENT POLICIES FOR INTERNATIONAL TRADE IN VIETNAM n Nguyễn Đình Đăng Khoa BABAWE21712 dinhdangkhoa2711@gmail.com Nguyễn Thiên Trang BABAWE20078 trangthien2209@gmail.com Đoàn Triều Vỹ

School of Economics, Finance, and Accounting BA068IU – International Economics

Semester 1 (2023-2024)

Assessment Task 1 – Group Assignment

ASSIGNMENT COVER SHEET

TABLE OF CONTENTS

2000 TO 2022

III THE ROLE OF INTERNATIONAL TRADE IN

VIETNAM'S SOCIO-ECONOMIC DEVELOPMENT

IV CURRENT POLICIES FOR INTERNATIONAL TRADE

IN VIETNAM

n

Nguyễn Đình Đăng

Khoa BABAWE21712 dinhdangkhoa2711@gmail.com

Nguyễn Thiên Trang BABAWE20078 trangthien2209@gmail.com

Đoàn Triều Vỹ BABAIU21594 doantrieuvy.5403@gmail.com

Dương Minh Thông BABAIU21281 minhthong0941725152@gmail.co

m

Lê Như Quỳnh BABAWE21027 nhuquynh11012003@gmail.com

Vũ Thuý Hiền BABAWE21260 thyhin31@gmail.com

Nguyễn Tấn Toàn BABAIU21548 nttoan0710@gmail.com

Nguyễn Minh Phương BABAIU21493 nmphuong313@gmail.com

Nguyễn Quang Minh BABAIU21450 kencombackproo@gmail.com

Lê Công Tân BABAWE20255 tanlc2611@gmail.com

Nguyễn Thành Thái BABAIU21513 thainguyenthanh343@gmail.com

Due date: Friday 15th December 2023, by 11:59 PM

Assignment topic: International Trade in Vietnam and its determinants.

Lecturer: Trịnh Công Tâm

1 RCEP - The Regional Comprehensive Economic Partnership

2 Shifting to Official Export of High-Value Agricultural and Aquaculture Goods

V DETERMINANTS OF INTERNATIONAL TRADE IN VIETNAM

1 Geographical factors

2 Vietnam's Trade with Other Countries: A Comprehensive Overview

3 Determinants of international trade in Vietnam

4 Cultural distance

VI CONCLUSION

VII REFERENCES

International trade is pivotal in Vietnam's socio-economic development, driving its economic growth and shaping its global economic standing This report delves into the multifaceted aspects

of Vietnam's international trade, examining its participation in trade agreements, current policies, and the determinants influencing its trade dynamics

2000 TO 2022

Data from database: World Development Indicators

Last Updated: 10/26/2023

III THE ROLE OF INTERNATIONAL TRADE IN

VIETNAM'S SOCIO-ECONOMIC DEVELOPMENT.

Vietnam has also actively participated in economic and financial organizations and trade agreements So far, Vietnam has ratified ten bilateral and multilateral FTAs with regional and world partners, including the ASEAN Free Trade Area (AFTA) and 5 ASEAN +1 FTAs (with China, Japan, India, Australia, and New Zealand respectively), four bilateral FTAs between Vietnam and Japan (VJEPA), Korea (KVFTA), Chile (VCFTA) and the Eurasian Economic Union (EAEUFTA) respectively Vietnam also concluded FTA negotiations with the EU, ASEAN, and Hong Kong in November 2017 In parallel, Vietnam continues to negotiate the Agreement on Comprehensive Regional Cooperation, the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) Up to now, about 60 economies have been negotiating

FTAs with Vietnam, including key trading partners contributing 90% of Vietnam's export turnover

Vietnam's foreign trade market is increasingly expanding and has shifted to multi-markets Vietnam has had trade relations with 240 countries and territories, over 29 export markets, and 19 import markets with over 1 billion USD turnover The biggest customers in Vietnam include Japan, Taiwan, China, Korea, Singapore, the EU, and the US Vietnam has gradually built up large-scale items accepted by the world market, such as oil, rice, fisheries, textiles, and footwear

In 2017, imports and exports marked a remarkable level, reaching USD 400 billion and growing

by 21%, the highest level in many years When we look at the areas where countries like Vietnam have absolute advantages, we quickly detect the importance of unprocessed agricultural products and natural resources Examples of the first group of goods are coffee beans, rice, sugar cane or fish The second group includes coal, manganese, bauxite, chromate, offshore oil, or natural gas The basis for such absolute advantages can be found in natural conditions like the climate or locations of rare earths

Vietnam's imports and exports play a crucial role in the global trade landscape, contributing to the balance and prosperity of the entire world economy As a rapidly growing and stable economy, Vietnam has become a shining example in the global trade dialogue In terms of exports, Vietnam has emerged as a hub for producing and supplying high-quality goods at competitive prices This enhances the global supply chain and benefits consumers and businesses worldwide Conversely, through imports, Vietnam not only meets domestic consumption needs but also enriches the global supply and diversifies sources of raw materials for the international market This integration creates a positive global business environment, enabling Vietnam to foster cooperation and trade with partners worldwide Vietnam's participation in international trade agreements, such as the CPTPP and RCEP, further strengthens its role in shaping international trade rules and standards Therefore, Vietnam is a significant player and an active and reliable partner in the global trade system, supporting sustainable and equitable development worldwide

IV CURRENT POLICIES FOR INTERNATIONAL TRADE

IN VIETNAM:

1 RCEP - The Regional Comprehensive Economic Partnership

This brings significant benefits in several aspects:

In term of production: Vietnamese export goods can be more competitive in the global market,

because now Vietnam can enjoy preferential tariffs; however, Vietnam's leading suppliers of input materials are in the RCEP regional market So, our products will be more competitive in price and quality

Regarding to the labor forces: RCEP is also expected to exert pressure to improve the quality

of human resources From there, to become the winner in the market, each country must adapt continuously to the development of human capital to create a high-quality and skilled workforce

As a result, if we could adapt to the competition, the Vietnamese labor force would be more productive, and based on the theory of the Ricardo model, they would have better wages

2 Shifting to Official Export of High-Value Agricultural and Aquaculture Goods

Characteristic & Orientation

Vietnam is implementing policies to gradually shift from unofficial exports to official exports of high-value agricultural aquaculture goods to the potential markets Vietnam has various

agricultural aquaculture resources that meet global customers' needs Nevertheless, this country is not able to export with a large volume due to the unofficial main export road To join the Official Exporting Road, firms must adapt to many complex administrative barriers and continuously improve the quality of future long-term development

Current policies for China market - the main export market of Vietnam

The mission: China is implementing the policy of bringing trade activities into regularity,

requiring Vietnamese agricultural products to aim for sustainable export to maintain this market

The Vietnamese agricultural: Agriculture in Vietnam is witnessing a high volume of raw exports.

Vietnam do not export the final goods, but mainly the raw materials, not just any product but almost all products, from rubber, coffee, and pepper to cashew nuts, tea, cassava, and vegetables

In the Chinese market, many Vietnamese agricultural products are imported but mainly through unofficial channels; unofficial trade has become the main export channel for these goods As a result, exporting agriculture cannot bring higher value than its true potential Mr Dang Phuc Nguyen, General Secretary of the Vietnam Fruit, and Vegetable Association, also claimed,

"Currently, up to 60-70% of fruits and vegetables exported to China are unofficial exports To quickly shift to official exporting, The Vietnamese government is negotiating plant quarantine for fruit and vegetables with China to reduce inspection and control procedures at border gates and,

at the same time, expand the list of products allowed to be exported to China Moreover, Firms must also work with the government to ensure that exported goods fully meet quality standards and traceability regulations as required by the importing country, including goods exchanged between border residents

The Vietnamese aquacultural: The process applies to aquaculture, especially in high-value

products like lobsters Ca Mau crabs Chinese Customers have a high demand for these products, significantly benefiting Vietnamese local economies like Phu Yen, Khanh Hoa, and Cam Ranh The aquaculture for lobsters and Ca Mau crabs in Vietnam is suitable even with core competition compared to others due to rich sea forest resources After the COVID-19 pandemic, the administrative requirement for exporting is tightened, so we no longer export high volumes by the unofficial road As a result, the local government and firms must work together to improve the quality of lobster crab, in line with the demonstrated transparent farming processes and relevant licenses to ensure quality These requirements are challenging, but we cannot survive in the global economy if we cannot adapt

V DETERMINANTS OF INTERNATIONAL TRADE IN VIETNAM

1 Geographical factors:

Geographical factors are among the most critical factors affecting a country's export and import activities For Vietnam, geographical factors have both positive and negative impacts

Positive impacts:

A bridge between Southeast and Northeast Asia: Vietnam is in the center of Southeast Asia,

bordering China to the north, Laos and Cambodia to the west, and Thailand and the South China Sea to the south This creates favorable conditions for Vietnam to become a bridge between Southeast Asia and Northeast Asia, connecting the markets of over 2 billion people in these two regions

A long coastline and adjacent to many international maritime routes: Vietnam has a coastline of 3,260 km, adjacent to the South China Sea, one of the largest seas in the world This creates favorable conditions for the development of maritime transport, helping to reduce the cost of transporting export and import goods

A tropical monsoon climate: Vietnam's tropical monsoon climate is conducive to developing

tropical crops and livestock, creating a rich source of raw materials for export

Negative impacts:

A location in an area with many natural disasters: Vietnam is in an area with many natural

disasters such as storms, floods, droughts, etc This can affect export and import activities, especially during natural disasters

An uncoordinated transportation network: Vietnam's transportation network still needs to be

coordinated, not meeting the demand for transporting export and import goods This increases transportation costs and transportation time

Limited logistics management level: Vietnam's logistics management level still needs to be

improved, as it is not meeting the requirements of an integrated economy This reduces the efficiency of export and import activities

factors, Vietnam needs to focus on developing logistics services, improving the quality of transportation infrastructure, and responding to climate change

2 Vietnam's Trade with Other Countries: A Comprehensive Overview

Vietnam actively engages in international trade with numerous countries across the globe However, its trade focuses primarily on specific vital markets, fostering solid economic ties and partnerships

Major Trading Partners:

ASEAN:

Largest export market: This represents around 30% of Vietnam's total exports

Key partners: China, Japan, South Korea, Singapore, Thailand, Indonesia, Malaysia, Philippines, Laos, Cambodia, and Myanmar

United States:

Important trading partner: This represents roughly 20% of Vietnam's total import and export volume

Key trade focus: Machinery, equipment, raw materials, agricultural products, and seafood

China:

Critical trading partner: This represents approximately 15% of Vietnam's total import and export volume

Key trade focus: Electronics, textiles, footwear, agricultural products, and seafood

Japan:

Significant trading partner: Important source of foreign direct investment and a key player in Vietnam's economic development

Key trade focus: Machinery, equipment, raw materials, electronics, and automobiles

Emerging Market: Vietnam actively explores and expands trade opportunities with emerging

markets such as India, Turkey, Russia, and the European Union, diversifying its trading portfolio and fostering new economic partnerships

Additional factors influencing Vietnam's trade: Free Trade Agreements (FTAs): Vietnam has

signed FTAs with over 80 countries and territories, facilitating trade and reducing barriers

Government policies: The Vietnamese government emphasizes trade diversification and

promotes a favorable investment climate to attract foreign businesses

Infrastructure development: Transportation and logistics infrastructure investments aim to improve efficiency and competitiveness in international trade

To sum up, Vietnam's international trade is crucial to its economic growth and development.

Vietnam solidifies its position as a strong player in the global marketplace by focusing on key markets, exploring emerging opportunities, and implementing supportive policies

3 Determinants of international trade in Vietnam:

crucial role in determining a country's competitiveness in international trade A highly skilled and efficient workforce can contribute to producing high-quality goods and services

Skill Levels: The skill set of the Vietnamese workforce is a critical determinant of international trade A highly skilled labor force contributes to increased productivity, innovation, and the ability to produce high-value-added goods and services, enhancing the competitiveness of Vietnamese products in the global market

Education and Training Programs: Investment in education and training programs is essential for improving the quality of the labor force A well-educated and trained workforce is better equipped to adapt to evolving technologies and industry requirements, fostering innovation and efficiency in production processes

Technological Adaptability: The ability of the labor force to adapt to and integrate new technologies is crucial for industries engaged in international trade A technologically adept workforce enables businesses to stay competitive and meet the demands of the global market

In summary, the period from 2000 to the present has seen a remarkable improvement in the

quality of the labor force in Vietnam, driven by concerted efforts in education, technology adoption, and government policies These enhancements have positively influenced international trade and positioned Vietnam as a competitive player in the global economy

b Wage Levels: The level of wages in Vietnam affects the cost of labor, which, in turn,

impacts the overall production cost of goods and services Wage levels can influence the competitiveness of Vietnamese products in the global market Vietnam is recognized as one of the countries with relatively low wage levels