ins3019 international trade management group assignment this assignment is submitted as a requirement for the final exam

ASSIGNMENT 1 2.1 Overview of international trade 2.1.1 Import, Export turnover and Trade Balance from 2019 to 2021 The overview analysis of the international trade situation in Vietnam

INS3019 INTERNATIONAL TRADE MANAGEMENT

GROUP ASSIGNMENT

This assignment is submitted as a requirement for the final exam

Lecturer: Dr Lê Hương Linh

Hanoi, June 2021

We assure that this is our own research report All the data, figures in the report are from our own study and cited fully from known sources We do not copy from any documents and do not violate the regulations for plagiarism

We would like to express our greatest thanks of gratitude to our instructor (Dr Le Huong Linh) as well as the Head of Department who gave us the precious opportunities to do this wonderful assignment on the topic ( nternational ITrade Management) which also helped us in doing a lot of useful research and we can have chance to comprehend so many new things that we are really grateful to them

Last but not least, we would also like to give a sincere thankfulness to all of our friends who support us a lot during the class

Wish you all surrounded by happiness and luck in the future

I INTRODUCTION 5

II ASSIGNMENT 1 6

2.1 Overview of international trade 6

2.1.1 Import, Export turnover and Trade Balance from 2019 to 2021 6

2.1.2 Major Import, Export partners and products in 2019 7

2.1.3 Major Import, Export partners and products in 2020 9

2.1.4 Major Import, Export partners and products in 2021 11

2.2 Terms of trade analysis 13

III ASSIGNMENT 2 15

3.1 Changes in Vietnam’s international trade policies 15

3.2 Investigation and analysis of the changes in trade policies using the viewpoints of protectionism, trade liberalization and internation trade integration 17 al3.2.1 Protectionism of rules of orig 18 in3.2.2 Trade liberalization of rules of origin 18

3.2.3 International trade integration of rules of origin 19

IV CONCLUSION 20

REFERENCES 21

INDIVIDUAL CONTRIBUTION 24

I INTRODUCTION

This report focuses on analyzing Vietnam's international trade situation Vietnam has been a success story in terms of development Economic reforms implemented since the founding of Đổi Mới in 1986, combined with favorable global trends, have helped propel Vietnam from one of the world's poorest countries to a middle-income economy in a generation GDP per capita increased 2.7 times between 2002 and 2020, reaching nearly US$2,800 Over the same time period, poverty rates (US$1.90/day) fell sharply from more than 32% in 2011 to less than 2% This report includes 3 parts which fulfills 2 questions provided along with the conclusion The first part will examine the overview of international trade in Vietnam as well as the terms of trade analysis between Vietnam and the United States The second part concentrates on evaluating, investigating and analyzing the changes in Vietnam’s international trade policies Finally, some conclusions will be drawn after performing 2 questions

II ASSIGNMENT 1

2.1 Overview of international trade

2.1.1 Import, Export turnover and Trade Balance from 2019 to 2021

The overview analysis of the international trade situation in Vietnam will be evaluated from 2019 to 2021 - the time of the pandemic - Covid19 According to the General Statistics Office of Vietnam, we have the following table with the import and export turnover along with the trade balance comparing the first 6 months from 2019 to 2021:

Trade surplus (+) / deficit (-) (Bill.USD) 1.72 5.86 -1.47

Vietnam continuously has a trade surplus in the first 6 months of 2019 and 2020 (1.72 billion USD in 2019 and 5.86 billion USD in 2020) in spite of the fact that these were the times when Covid19 started and continued to spread out all over the world Despite the suspended production in various provinces with large industrial scale such as Ho Chi Minh, Binh Duong, Ha Noi, Bac Giang and Bac Ninh in 2020, the export turnover still has a slight increase of 0.2% compared to 2019 (122.77 billion USD)

Remarkably in 2021, the fourth wave of the Covid-19 pandemic has had a negative impact on

our country's production and business activities as it continues to develop in a challenging way in Viet Nam Some provinces and cities with a large industrial scale, such as Ho Chi Minh City, Binh Duong, Ha Noi, Bac Ninh, and Bac Giang, have had a high number of cases, and many industrial parks and factories have had to close or suspend production Some industrial zones' production and export activities were affected However, Viet Nam's import and export performance in the first six months of 2021 was encouraging: Total export and import turnover in the first six months reached 316.73 billion USD, up 32.2 % from the same period in 2020; import turnover maintained a fairly high growth rate of 36.1 %, reaching 159.1 billion USD

The import value of many items increased sharply over the same period in 2020; one reason for the sharp increase in the import value of items is that the import price index increased by 2.24 % in the first six months of 2021 over the same period last year (in the second quarter of 2021, it increased by 3.28 %) Other basic metals increased by 12.8 %; iron and steel increased by 7.65 %; fabric increased by 1.65 %; electronics, computers, and their parts increased by 1.62 %; and machinery, instruments, and accessories increased by 0.56 %

2.1.2 Major Import, Export partners and products in 2019

According to the data collected from the World Bank, the biggest export partner of Vietnam in 2019 was the United State with 61,404 million USD worth and accounting for 23.1% China took the 2nd place with 41,434 million USD worth and makes up for 15.66% Finally, were

Japan, South Korea and Hong Kong with the export turnover worth in turn 20,427 million USD (7.7%), 19,729 million USD (7.5%) and 7,162 million USD (2.7%)

In accordance with World Bank, China was the largest import partner of Vietnam in 2019 with 75,586 million USD, taking up 29.8% South Korea with an import turnover of 46,942 million USD occupied 18.5% Finally, Japan and Asian countries along with the United States have the import turnover worth 19,533 million USD (7.7%), 15,181 million USD (6.0%) and 14,377 million USD (5.7%) in sequence

As for Vietnam Top 5 import and export products in 2019, the data is also gathered from World Bank and presented in the following table:

Trade Value (million USD)

Transmission apparatus, for radiotelephone incorpo 38,657,180.66

Parts of electrical apparatus for line telephone 17,517,830.94

Monolithic integrated circuits, digital 11,490,879.61

Sports footwear, with rubber or plastic soles 5,410,060.13

Parts and accessories of automatic data process 4,333,793.26

Top 5 import products

Monolithic integrated circuits, digital 29,951,623.49

Parts of electrical apparatus for line telephone 13,267,262.93

Petroleum oils, etc., (excl crude) 6,348,806.00

Petroleum oils and oils obtained from bituminous 3,809,032.76

2.1.2 Major Import, Export partners and products in 2020

According to the data collected from Trend Economy, the United State was at the top of export partners of Vietnam in 2020 with 77 billion USD, dominating 27% of the export pie China was the runner up with 48 billion USD and with a share of 17.3% The last 3 major partners in sequence were Japan, South Korea and Hong Kong with 19.2; 19.1 and 10.4 billion USD export turnover worth

For the top 5 major import partners of Vietnam in 2020, China took the lead with 84 billion USD worth, making up 32% The second major in import partners rank is South Korea with 46 billion USD business worth and a share of 17.9% The last 3 major import markets were Japan, Asian countries and the United State with import turnover worth 20; 16.7 and 13.7 billion USD

The data for Vietnam Top 5 import and export products in 2020 are found in Trend Economy and presented in the following table:

Trade Value (billion USD)

Transmission apparatus for radiotelephony, radiotelegraphy, broadcasting or television and other video camera recorders; digital

Electronic integrated circuits and micro assemblies 13.9

Automatic data processing machines and units thereof; magnetic or optical 8.74

readers, machines for transcribing data onto data media in coded form and

machines for processing data

Footwear with outer soles of rubber, plastics, leather or composition leather

and uppers of textile materials

8.43

Top 5 import products

Electronic integrated circuits and micro assemblies 39

Electrical apparatus for line telephony or line telegraphy and telecommunication apparatus for carrier-current line systems or for digital

line systems; videophones

According to Trading Economics, the most major export partner of Vietnam in 2021 is the United State with a share of 19%, the next after the United State is China with 16% of the export turnover The last 3 in top 5 export partners of Vietnam 2021 are Japan, South Korea and Hong Kong with a share of 8; 7 and 4% in sequence

China takes the first place as the most important import partner of Vietnam in 2021 with 28 % of import pie share The second major export partner as recorded is South Korea, dominating 22% of import value Finally, Japan, Taiwan and Thailand are the last 3 in the top 5 with 8; 6 and 5% of share in turn

As for Vietnam Top 5 import and export products in 2021, the data is collected from the General Statistics Office of Vietnam and will be presented in the following table:

Trade Value (billion USD)

Computers, Electronic products & parts 40.85

Textile, sewing products 26.09

Top 5 import products

Computers, Electronic products & parts 60.34

2.2 Terms of trade analysis

1 Country A is Vietnam;

2 Country B is the United States;

3 The selected product X that Vietnam exports are energy;

4 The imported product Y of Vietnam is electronic goods; 5 The selected policy that the U.S imposes is Local contents requirements; 6 The transaction of Vietnam is export,

7 The arranged question: “If the U.S (country B) applies local content requirements for the energy that Vietnam (country A) exports, how will the Terms of Trade of Vietnam change? Why?”

As we know about the content of the domestic range is the way to prescribe a value ratio; some of the good’s products (final goods) must be domestically produced This request may be expressed as material content (e g., 75% of products must be produced domestically) or as a value ratio (for example, the value of the product must be produced domestically) Instead, the price of domestic and imported goods is weighted to be added to the cost of goods and transferred to consumers

If the U.S applies local content requirements for the energy that Vietnam exports, so the Term of Trade of Vietnam will change dramatically (of course disadvantages to Vietnam) because international trade and trade in the field of energy, in particular, countries are more concerned with the fact that some countries adopt the' localization requirements' (acres) in the energy sector, such as for some parts or devices that serve or produce energy (wind, energy, biomass, energy, etc., etc.) Few countries in the world use the localization requirements to encourage domestic production However, the application of local content requirements to the protection of the domestic output, which is contrary to international commitments, will negatively affect the liberalization process and trade in trade and investment in the sector, hindering the development of the global value chain (GVCS) and indirectly affecting the business In international trade, many lawsuits related to localization requirements generally and in the field of energy have been considered and treated by the world trade organization (WTO) due to the unreasonable imposition of the regulation on tariffs and trade) and the agreement on work-related investment (GATT) and trade-related investment measures (GATT) Regional and international disputes related to the localization requirement are now controversial in international trade

III ASSIGNMENT 2

3.1 Changes in Vietnam’s international trade policies

When we talk about changes in international trade policies in Vietnam, we need to go way back to before 1986, when the country was still under a centrally planned economic system To put it in other words, the supply and economic decisions were controlled by the government (regarding manufacturing and distribution of products) But in this age, people in the country started to rely on government subsidies and being lazy to work, which pushed the market to a breaking point But luckily, under a huge reformation of the political and market system called “Doi Moi” in 1986, the country has opened up to market forces: supply and demand The introduction of this new economic reforms policy opened a new era for Vietnam’s international trade by applying many new foreign policies of diversification and multilateralization

In 1986, the export of Vietnam took off and gained nearly 90% of its volume compared to the previous year During the 1990s, followed up by The U.S lifted the trade embargo on Vietnam, the country started to attract many FDI from many big brands like Coca-Cola Co., Pepsi Co., Ford, … Those are able to own 100% of their subsidiary in Vietnam according to the 1987 law The 2nd biggest change in Vietnam’s international trade was in 2000 when the country signed The Bilateral Trade Agreement with 61 countries (The US was included), starting from only 50

countries before 1990 and up to 170 BTAs signed till 2000 This showed that the country tried to achieve international economic integration and to be a trade liberalized country So, we can see that from 1986 to today, Vietnam is trying to erase trade barriers like tariffs, quotas, and administrative formalities as much as possible, promoting trading between other countries Making its international trading volume to GDP always above 100% and rising since 2000:

Vietnam market opening policies making the trade volume of Vietnam equal 2 times the size of the country's GDP (101.6% from exports and 98.8% from imports) Making it the 5th most open market in the world

The country also applied ISO 9001:2015 to control the quality of its exports, reducing the technical barriers to trade for its domestic export companies

Vietnam Law Magazine reported that Au Anh Tuan, Head of the Customs Control at the General Department of Customs, said, "we have adopted the rules of origin applicable to exports, but none for goods sold in the domestic market." Which means that the country does not apply any local content requirements in the country

Vietnam still put restrictions on foreign currency exchanging to its nationals because it helps the country to control its inflow of foreign currency through central banks and lower currency risks and keep a steady exchange rate – which was what the Vietnamese government was trying