Midterm assignment subject international economics topic vietnam’s economic relations with its trading partners from atiga

INTRODUCTION Association of Southeast Asian Nations ASEAN, established on 8 August 1967, includes ten member nations: Brunei, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand an

FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

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1.4 Research questions sccsssssccssecssscsssecssesssnessneessesseessesssseseaeeeesseeeees 3

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3.2.3.4 ////21///12/78,270.77.88nnnn7Ề.7 na 31 3.2.4 Conclusion on the economic relation of Vietnam with low GDP

ASEAN (Philippines, Thailand, and IndoneSi4) 55c 5 55s «se se sex 46

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3.4.4 | Conclusion on the economic relation of Vietnam with high GDP

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AHTN | ASEAN Harmonized Tariff Nomenclature

Lao

WITS World Integrated Trade Solution

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LIST OF FIGURES

Figure 2-1 ASEAN’s share of the world exports and mporfs ‹: 6

FIigure 2-2 Growth 1n AMS share of world exports, 2004 to 2018 7

Figure 2-3 Vietnam's exports to ASEAN countries 2001-2020 - cccccà2 8 Figure 2-4 Vietnam's imports to ASEAN countries 2001 - 2020 ị 9 Figure 2-5 Structure of applied MFN tariff in 2010 and 2018.00.00 cece 11 Figure 3-1 FDI outflows and exports o£members o£the ATIGA - - 16

Figure 3-2 Viet Nam's Imports and Exports from other countries in ATIGA 17

Figure 3-3 Import value of Vietnam from Brunel - - + cc + ‡+sx+sxssxs2 18 Figure 3-4 Export value from Vietnam to Brunel ¿2c 2c 3+ * xe vxsss2 19 Figure 3-5 Trade Balance between Vietnam and Brunel - ‹- c2 s3 19 Figure 3-6 Import structure of Vietnam from Brunei in 2008 and 2020 20

Figure 3-7 Export structure of Vietnam to Brunel 1n 2009 and 2020 21

FIigure 3-8 Import value of Vietnam to Cambodlia : ccccScc+ssx+svxssse2 23 Figure 3-9 Export value from Vietnam to Cambodlia -++++- + s+ss2 23 Figure 3-10 Trade Balance between Vietnam and Cambodia - - ‹- 24

Figure 3-11 Import structures of Vietnam from Cambodia in 2009 and 2020 24

Figure 3-12 Export structures of Vietnam to Cambodia in 2009 and 2020 25

Figure 3-L3 Import value of Vietnam from LaO§ cee eeseensentsseeseees 28 Figure 3-14 Export value from Vietnam †o LaO§ - - c2 1 v1 s2 29 Figure 3-15 Trade Balance between Vietnam and Laos - cccc s2 s+s+y 29 Figure 3-16 Import structures of Vietnam from Laos in 2009 and 2020 30

Figure 3-17 Import structures of Vietnam from Laos in 2009 and 2020 30

Figure 3-18 Viet Nam's exports to Myanmar since 2001 to 2020 - 33

Figure 3-19 Viet Nam's imports from Myanmar since 2001 to 2020 34

Figure 3-20 Trade balance between Viet Nam and Myanmai - + =++ 35 Figure 3-21 Comparison between Top 5 Exports industry from Viet Nam to Myanmar in 2009 and 2020 eccccce cee cecee ene eeseeceeseeeseesesseseiesesseeesttiesessraeene 36

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Figure 3-24 Trade balance between Viet Nam and Mialays1a - -«- 39 Figure 3-25 Top 5 Exports Industries From Viet Nam to Malaysia in 2009 and in

Figure 3-28 Trade balance between Viet Nam and Singapore - ‹‹+- 42

Figure 3-30 Top 5 Exports Industries from Viet Nam to Singapore 44 Figure 3-31 Viet Nam’s exports to Philippines between 2001 and 2020 (USD

Thailand in 2009 and 2020.0 ccecceececeeecsceseseceeseesceeeeecaeseuseeeeseeseneeneceeeesenseeseeeesaeees 55 Figure 3-40 Comparison between Top 5 Imports industry from Thailand to Viet Nam in 2009 and 2020.0 ccececeeceecsesccceseneeseeeeseseeseseeseseeseeeeseeseeeeesseeeseesenessesenseeeenees 56

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Figure 3-43 Trade balance between Viet Nam and Indonesia from 2001 to 2020 .59

Indonesia in 2009 and 2020 - S21 211211212 1111 2111111111111 11111111111 11 11111 ng HH ng He 60 Figure 3-45 Comparison between Top 5 Imports industry from Indonesia to Viet Nam in 2009 and 2020.0 ccececeeceecsesccceseneeseeeeseseeseseeseseeseeeeseeseeeeesseeeseesenessesenseeeenees 61

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LIST OF TABLES Table 2-1 GDP of ASEAN Member States in 2020 (Umt: Billion USD) 5 Table 2-2 Percentage of tariff lines with zero tariff rates under CEPT/ATIGA 10

Table 3-2 FDI flow betwecen Vietnam and Cambodlia - scscc se csssssssss 27

Table 3-4 Low GIP gToU 2 1221222122111 121 112 115 11H15 128 1112 net 32 Table 3-5 FDI o£ Viet Nam from Myanmar (USD milÏion) - 5 - 2c 52552 37

Table 3-7 FDI o£ Viet Nam from Singapore (USD milÏion) : 5555 45 Table 3-8 Middle GDP group - 2122112111 1212 121111511 12111 1111251111111 1 11 key 46

Table 3-10 FDI of Viet Nam from Thailand (USD million) 57 Table 3-11 - FDI of Viet Nam from Indonesia (USD million) 5 - 5: 62 Table 3-12 High GDP group c0 2201221111211 2 111151 112111211 1101151111111 key 62

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CHAPTER 1 INTRODUCTION

Association of Southeast Asian Nations (ASEAN), established on 8 August 1967, includes ten member nations: Brunei, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand and Vietnam After more than 50 years, it has gained achievements over development, poverty alleviation and conflict resolution The total GDP of this region reached 3.17 thousand billion USD The economic growth 1s high, although it is uneven between countries Many countries’ urban, including Singapore, Jakarta, Bangkok, etc Has gradually kept up with the level of many developed countries Since the participation

in 1995, Vietnam also earned a lot of accomplishments over the economy Our country has more chances in a vanety of Free Trade Agreements (FTAs) , building the relationships with countries around the world, having a vast economic openness ASEAN

is Vietnam’s fourth-largest export market (behind The United States, EU, China) and the third-largest exporter of goods to Vietnam Regarding investment, Dr Yasuhiro Yamada insisted that: “FDI capital from ASEAN flowing into Vietnam in the past 25 years has confirmed this country is an attractive investment destination in the region FDI inflows into industrial zones in Vietnam are the driving force for Vietnam's economy to go up and help narrow the development gap with other countries in the region.”

In the era of globalization, economic integration plays a significant role in many countries, and ASEAN is no exception With the desire to accelerate integration through

an agreement that is comprehensive and based on commitments under initial ASEAN agreements to create a legal basis for the free movement of goods in the region, the ASEAN Trade in Goods Agreement (ATIGA) was officially formed, based on Common Effective Preferential Tariffs (CEFT/AFTA) in 1992 This agreement was signed by ten members of ASEAN in February 2009 and has been effective since 17 May 2010 Having recognized the different stages of economic development among AMS as well as the need

to facilitate participation, ATIGA is believed to bndge the gap of development by reducing the barriers and strengthening economic linkages among country members, increasing trade and investment efficiency, with the hope to create a larger market with

of Vietnam under ATIGA, the implication of Government and firms in the future

1.2.1 Aims of the research

The research is conducted to analyze the trade and investment activities between Vietnam and other ASEAN Member States (AMS) before and after ATIGA came to effect

in order to understand clearly how it has affected the economic relation in general After having a clear insight, this research is able to conclude the opportunities and challenges of Vietnam under ATIGA as well as the implication on building and strengthening the economic relation between Vietnam and other AMS

1.2.2 Objectives of the research

To accomplish the above research aims, the study has the following specific tasks:

- Building the theoretical basis and data evidence to have a clear understanding of the changes and highlights of AMS engaging in the economic relation with Vietnam under ATIGA

- Identifying the opportunities, challenges, opportunities, and implications for Vietnam of Vietnam on the relationship with ATIGA’s country members

This research focuses on the two aspects of the economic relations between Vietnam and other nations in ASEAN, including trade in goods and investment The trade activities are analyzed based on the data from 2001 to 2020, while it is from 2009 to 2020 for investment activities due to lack of data The research was conducted in Vietnam, based

on the data and calculation mainly on ITC, WITS and UNCTAD

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1.3.2 Objects of the research

In this research, we will analyze Vietnam’s trade in goods and investment relations with other ASEAN country members before and after the effectiveness of ATIGA From then, we will discuss how this agreement has had an impact on the relationship between Vietnam and these countries And most importantly, we will point out the opportunities and challenges for Vietnam when engaging with these countries under ATIGA

This research follows strictly these questions:

trading partners in ATIGA changed in the past 20 years?

member countries with Vietnam?

Vietnam with these countries?

engaging in economic activities with these countries under ATIGA?

The research methods used in this research include:

- The inherited method for obtaining information and data from research documents and existing research on this topic

- Qualitative research methods: gathering and filtering secondary data mainly from Intracen, WITS and UNCTAD

- Descriptive Statistics methods combined with illustrative figures and tables

The main content of this research 1s divided into four chapters:

- Chapter 1: INTRODUCTION

- Chapter 2; OVERVIEW OF ECONOMIC RELATIONS BETWEEN VIETNAM AND ITS TRADING PARTNERS OF THE ATIGA

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VIETNAM AND ITS TRADING PARTNER OF THE ATIGA

- Chapter 4: FINDINGS AND CONCLUSION

VIETNAM AND ITS TRADING PARTNERS OF THE ATIGA

The ATIGA (also known as ASEAN Trade in Goods Agreement) was signed on 26 February 2009 at Cha-am, Thailand and came into force on May 17, 2010 It was preceded by the Agreement on Common Effective Preferential Tarnff Scheme for the ASEAN Free Trade Area (CEPT/AFTA), which was signed in 1992

The Agreement is considered as a culmination of trade integration efforts amongst the ASEAN Member States (AMS) over roughly 20 years, beginning in 1993 when the ASEAN free trade area (AFTA) agreement was signed by ASEAN-6 including Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand Following that, Vietnam joined in 1995, before the participation of Lao PDR and Myanmar in 1997 and Cambodia

in 1999,

The ATIGA 1s the first comprehensive agreement of ASEAN that governs all mtra- ASEAN trade in goods and is built on the basis of a combination of tariff reduction/elimination commitments agreed in CEPT/AFTA and other related agreements and protocols

The goal of the ATIGA is to set up an integrated market and production with by a free movement of goods by 2015 for the ASEAN Economic Community (AEC), resulting

in a decrease in trade barriers and deeper economic integrations between member countries, an increase in trade, lower business costs and a larger economy of scale for businesses

Vietnam started implementing CEPT/AFTA in 1996 and then the nation has continued to implement ATIGA up to now

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2.1.2 Characteristics

According to the ATIGA, ASEAN countries give each other preferential treatment equivalent to or more favorable than that given to partner countnes in Free trade agreements (FTAs) signed by ASEAN (ASEAN+ FTAs)

Besides commitments on tariff, ATIGA also embraces some factors to assure the free trade flow of goods within ASEAN, comprising the following commitments: removal of non-tariff barriers, rules of origin, trade facilitation, customs, standards and conformation, and sanitary and phytosanitary measures The agreement also includes international trade’s main principles like transparency and non-discnimination (MFN treatment, national treatment)

The Tariff Reduction Schedule of each Member nation in Annex 2 of the agreements includes all products in ASEAN Harmonized Tanff Nomenclature (AHTN) and the detailed process of tariff reduction applied on each product for each year Therefore, in comparison to CEPT, tariff commitments in ATIGA are more transparent and easier to search for

The ATIGA includes 10 ASEAN Member States (AMS), including Brunei, Laos, Cambodia, Myanmar, Malaysia, Singapore, Philippines, Thailand, and Indonesia

In 2020, according to Statista, total GPD of all ASEAN nations was roughly 3.08 trillion U.S dollars, a dramatic increase from the previous years, illustration the region’s thriving economy Indonesia’s GDP was the greatest, at 1,059.64 billion USD, while Brunei accounted for the lowest, at 12 billion USD

Table 2-1 GDP of ASEAN Member States in 2020 (Unit: Billion USD)

Source: World Bank WITS data

In terms of exported product, ASEAN is regarded as one of the world’s most crucial exporters in electronic products, mineral fuels, and oils production Over the past 20 years, the exports of these commodities account for 60% of ASEAN exports to the world

in 2001 and nearly half of ASEAN export to the world in 2019 Meanwhile, similarly, the

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import of ASEAN has also been more varied as 58% of ASEAN import belonged to the electronics product and mineral and oil fuels whereas in 2019 the value was at 50% ASEAN countries, especially Vietnam, have developed and become major players in global value chain-oriented products such as apparel and footwear, electronics, textiles, and motor vehicles

Figure 2-2 Growth in AMS share of world exports, 2004 to 2018

My — Graphs by Product Description

Source: World Bank WITS data

As a result of ATIGA, trade turnover between Vietnam and ASEAN members has experienced an upward trend Based on the Minister of Industry and Trade, in the first half of 2021, the import-export value between Vietnam and ASEAN nations stood at US$34.7 billion, which constitutes 10.95% of Vietnam’s total import-export turnover Vietnam - Indonesia trade relations also developed, roughly doubling from US$5 billion

in 2013 to upper US$9 billion in 2019 Despite the decrease in bilateral trade in 2020 because of the COVID-19 pandemic, it witnessed a strong recovery in the first half of

2021, reaching US$4.5 billion (up 40 percent compared to the value in the previous year)

It is noticeable that trade relation between Vietnam and the Philippines still maintain its growth rate in spite of the pandemic Specifically, there was a dramatic increase in trade turn over between Vietnam and the Philippines, from US$2.4 billion in 2010 to US$5.3 billion in 2020 Meanwhile, Singapore plays an integral part in Vietnam’s economies as Group 6

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the nation is the current third hugest foreign investor of Vietnam as well as Vietnam’s fourth and tenth greatest trade partner in the Southeast Asia and in the world, in turn Nevertheless, the COVID-19 has unprecedentedly impacted on Vietnam’s trade in a negative way Investors such as Singapore are facing with a lot of challenges because of the increasing number of positive cases in Vietnam’s industrial zones, causing their businesses to defer or cut down on operations

Over 2 decades, Vietnam’s export value to AMS witnessed an upward trend thanks

to the impact at FTAs, especially ATIGA During the period of 10 years from 2001, Exported value to Singapore was the highest However, in the next 6 years, Vietnam tend

to export more value to Malaysia than other member states, while from 2006, the largest amount of Vietnam export belonged to Thailand The export of Vietnam to Laos, Brunei and Myanmar accounted for the lowest over 20 years

Vietnam's exports to ASEAN countries 2001 - 2020

Unit: US Dollar thousand

ee Thailand == Singapore Philippines

==== Nlyanmar Malaysia === Indonesia

—(ambodia =——=Laos — Brunei Darussalam

Figure 2-3 Vietmam's exports to ASEAN countries 2001-2020

Source: Trademap by UNCTAD Regarding Vietnam’s imports to ASEAN nations, similar to exports, the amount also experienced an upward tendency from 2001 to 2020 thanks to ATIGA It is noticeable that between 2001 and 2006, Vietnam’s imports to Singapore and Thailand were the greatest, while the largest amount of Vietnam’s imports to ASEAN members belonged to Thailand and Myanmar

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Figure 2-4 Vietnam's imports to ASEAN countries 2001 - 2020

Vietnam's imports to ASEAN countries 2001 - 2020

Unit: US Dollar thousand

BP AP PP PP gh” We aP gp” ah’ Pah’ Pah” ah” ah

Thailand —— Singapore Philippines

==== Myanmar Malaysia Indonesia

Cambodia Laos —— Brunei Darussalam

It is undeniable that Vietnam has great prospects to attract FDI from ASEAN countries because it has actively implemented ASEAN’s general commitments as well as improved bilateral trade in many areas by signing FTA such as ATIGA Similar to trade, investment relations between Vietnam and AMS are witnessing a rapid growth

Nevertheless, sectors with a high prospect for Vietnam to attract FDI such as seafood, agriculture and forestry, tourism, logistics, and wholesale-retail distribution are Group 6

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also regarded strengths of other ASEAN nations like Malaysia, Thailand, The Philippines, and Myanmar Based on the World Economic Forum (WEF)’s Global Competitiveness Report 2014-2015, Vietnam ranked much lower than Malaysia, Thailand, Indonesia, and the Philippines in terms of national competitiveness

The ATIGA enhanced CEPT/AFTA and comprise additional comprehensive commitments that relate to trade in goods, its institutional arrangement and mechanisms

to implement as well These days, AMS tend to concentrate on addressing non-tariff measures that might cause non-tariff barrier impacts on the trade and business activities of the region

Under ATIGA, import duties on all good traded are eliminated by 2010 for ASEAN-

6 and by 2015, can be flexible to 2018, for CMLYV It is noticeable that import taxes levied

on all goods of all members except will be no more than 5% Moreover, Vietnam can enjoy the reduction in import tariff on sugar products, 0-5% It is also worth noting that Unprocessed agricultural products will have specific MFN import tariff reduced and the import tax of petroleum products will be reduced, too As a result, it is undeniable that AMS has mostly gained the commitment for trade liberalization under the ATIGA In general, in 2018, the proportion of tariff lines having ATIGA tanff rate of 0% was about 98%, greater than the figure in 2009, at 69% In addition, by 2010, import duties on 99% had been eliminated CLMV experienced a significant increase in figure for tariff lines at 0%, from 45% to 97% between 2009 and 2018

Table 2-2 Percentage of tariff lines with zero tariff rates under CEPT/ATIGA

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Source: eria.org Moreover, exporting member states can enjoy tariff concessions offered by importing members if the tariffs on their products are at 20% or below and meet the necessity of rules of origin (ROO)

As can be seen from the graph below, Brunei and Singapore (not displayed) have liberalized significantly, with most MFN tariffs set to zero in 2018 Malaysia likewise has more than half of its tariff lines under MFN at zero, compared to less than a third in Thailand and Vietnam Cambodia has the biggest percentage (two-fifths) of tariff lines above 10% applied MFN, followed by Viet Nam at the opposite end of the MFN tariff spectrum Brunei, on the other hand, has no tariff lines exceeding 10% applied MFN About one-fifth of the tariff lines in the remainder of the AMS are above 10% Tariff rates for Indonesia, Myanmar, Lao PDR, and the Philippines are most commonly found between zero and ten percent MFN tariff arrangements have changed slightly over time

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Under ATIGA, each member country will not impose or maintain any NTMs to the import of products from other Member States or the export of products to the territory of other Member States

It is noticeable that from 2015 to 2018, the overall number of NTMs rose by around 15%, reflecting the dynamism of AMS in regulatory change to respond to diverse policy demands, such as consumer protection and competitiveness enhancement through improved product standards Meanwhile, the composition of NTMs has remained essentially constant throughout time TBTs are the most common type of NTM, followed

by SPS indicators These two subcategories make up the technical measures, which accounted for around 70% of all NTMs This tendency is similar to that of more developed countries, where technological methods to safeguard consumers, the environment, and animal welfare are frequently adopted It is worth mentioning, however, that among nontechnical measures, export-related measures account for a sizable share of ASEAN's NTMs While NTMs on exports are less likely to be employed with protectionist purpose than NTMs on imports, the predominance of NTMs on exports might put a significant burden on exporters and, as a result, impair an economy's competitiveness

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A SP THAY onal pny eoseniery 2,577 313 2/795 294

E control measures, and other we = oie _=

restrictions other than SPS

measures or TBT measures

Price control measures

F including additional taxes 389 47 438 46

Note: Sector as defined by HS 2017 at 2-digit levels Rules of origin and anti-dumping measures are not included

Source: ERIA-UNCTAD Raw NTMs in ASEAN Database, version 2018

There are some noticeable NTMs in the ATIGA, including tariffs, Quotas, Surcharges, Quantitative restrictions, Other non-tariff measures, Customs valuation, Rules

of Ongin; Standards, Technical Regulations and Conformity Assessment Procedures; Sanitary and Phytosanitary (SPS) Measures; Export taxes; Licensing Procedures (import and export); Foreign exchange controls related to imports and exports; Application of the

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2.3.2.2 Trade facilitation

Some, but not all, NTBs are addressed by ATIGA In terms of NTBs, ATIGA is primarily concemed with trade facilitation According to the research, decreasing trade costs by addressing trade facilitation and logistic expenses has a substantially bigger influence on product fragmentation trade than tariffs However, progress with ATIGA on trade facilitation has been steady, albeit there is still room for development

2.3.2.3 Sanitary and Phytosanitary (SPS) Measures

Under this measure, each member agrees to use the SPS Agreement's principles in the development, application, or recognition of any sanitary or phytosanitary measures with the goal of developing trade between and among Member States whereas also protecting human, animal, and plant life and health in each member country

2.3.2.4 Licensing Procedures

All automated and nonautomatic import licensing processes must be executed in a transparent and predictable way by each Member State in order to guarantee the transparency in trade relations between member countries

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with, and that the OCP are user-friendly Adoption of co-equal and alternative Regional Value Content 40 % value added regulations, as well as a change in tariff classification or process rules for major priority product sectors like as garments and textiles, iron, and steel, and so on, are among the amendments to the CEPT-AFTA ROO

Moreover, without prejudice to their nghts, Member States must grant exceptions to existing foreign currency limitations pertaining to payments for products under this Agreement, as well as repatriation of such payments

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VIETNAM AND ITS TRADING PARTNER OF THE ATIGA

Figure 3-6 FDI outflows and exports of members of the ATIGA

(Unit: USD Billion)

FDI Outflow and Exports of countries in Asean

Firstly, there are a pattern in which a higher GDP will encourage a higher FDI outflows and Exports That is true because when a country exports goods, it sells them to

a foreign market in another country Those exports bring money into the country, which increases the exporting nation's GDP Also, that money will enable the country to use back into FDI for other nations

Secondly, Within the group of three with High GDP group include Indonesia, Thailand, Philippines, and Low GDP group include Cambodia, Lao PDR and Brunei, the FDI and Exports are relatively close to each other, meaning a better chance for comparison However, there is also a special case for the Middle GDP group with Singapore, Malaysia and Myanmar where although the GDP is close, the FDI and exports are different, and the difference is much larger compare with other groups

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Therefore, this research aims to conduct a quantitative analytics in each members within the group to see the reason and the trade, investment pattern of each country 3.1.2 Viet Nam trade relations with other AMS

Figure 3-7 Viet Nam's Imports and Exports from other countries in ATIGA

Viet Nam's Exports from other countries in ATIGA

— Indonesia —Thallane Philippines

——Singapore —— Malaysia ——Myanmar

——Cambodia —— ao People's Democratic Republic====Brunei Darussalam

Viet Nam's Exports from other countries in ATIGA

3000000

2000000

1000000

— cambodia —La0 People's Democratic Republic Brunel Darussalar

Source: Trademap by UNCTAD Imports and Exports from other countries to Viet Nam has been increasing every year especially in high GDP country like Thailand and Malaysia

However with only looking at this we can’t understand about how much have growth and does ATIGA have effect on shaping how countnes exports and imports, especially about what products are most popular

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(Brunei, Laos, Campuchia)

3.2.1 Brunei

3.2.1.1 Trade in good relation

Figure 3-8 Import value of Vietnam from Brunei

A quick drop was witnessed in 2014 as our country’s import of oil and gas decreased Until 2018, the import value in this sector was 0, making the total import plunge to just below 40,000 thousand USD The situation then improved when gas and oil were increasingly imported again and reached nearly 30,000 in 2020, despite the effect of COVID-19

In general, the ATIGA’s impact was not significant enough for the import from Brunei to develop constantly Yet, it still made a difference compared to the phase before

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Figure 3-9 Export value from Vietnam to Brunei

to a decrease in ships and boats exported, from over 30,000 thousand USD to just 148 thousand USD

The situation became reversed in 2019 when Vietnam increased the export of Iron and Steel to more than 30,000 thousand USD, making it the most exported product in

2019 However, the total value plunged again in 2020 to just 16,457 thousand USD due to the impact of COVID-19

@ Trade Balance

Figure 3-10 Trade Balance between Vietnam and Brunei

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to the similarity of key export products of Vietnam with ASEAN countries, such as electronics, agricultural products, textiles, making Vietnam quite disadvantaged in this region For instance, one of the major exported sectors from Vietnam to Brunei is Electrical Machinery and Equipment, but the value was not high compared to other ASEAN countries since the price of this sector in these countries was 5-10% cheaper than

in Vietnam In addition, Brunei placed strict standards on imported products Therefore, it would take a long time for Vietnam to enhance the trade balance with Brunei

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Import structure of Viet Nam from Brunei in 2008 Import structure of Viet Nam from Brunei in 2020

0%

= Beverages, spirits and vinegar

* Aluminium and articles thereof

= Mineral fuels, mineral oils and products of their distillation; bituminous

substances; mineral

« Organic chemicals

* Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof

Plastics and articles thereof

= Pulp of wood or of other fibrous cellulosic material; recovered (waste

and serap) paper or

« Paper and paperboard; articles of paper pulp of paper or of paperboard

« Iron and steel

« Fish and crustaceans, molluses and other aquatic invertebrates - Others 1

# Sugars and sugar confectionery

In 2020, however, 92% of import value came from petroleum gas and petroleum oil (‘2711 and ‘2709), at above and below 100,000 USD respectively This was explained by the characteristics of Brunei’s economy, by which the oil and gas industries have dominated In addition, Vietnam also imported organic chemical and iron steel, but both sectors’ proportion just stood below 5% Other products, including the top imported products in 2008 like beverages, spirit and vinegar, were not even reached 1% of the total import in 2020

Figure 3-12 Export structure of Vietnam to Brunei in 2009 and 2020

Export structure of Viet Nam to Brunei in 2009 Export structure of Viet Nam to Brunei in 2020

Cereals

= Articles of iron or steel

«Fish and crustaceans, molluscs and other aquatic = - invertebrates «Electrical machinery and equipment and parts

thereof; sound recorders and reproducers,

= Electrical machinery and equipment and parts vision

thereof; sound recorders and reproducers, « Salt; sulphur, carths and stone; plastering

«= Miscellaneous chemical products Fes esa ace mci aC

invertebrates

= Salt; sulphur; earths and stone; plastering

materials, lime and cement "e7

* Mineral fuels, mineral oils and products of their ‘ distillation; bituminous substances; mineral Sed mated i fumishings; TH

= Rubber and articles thereof

3.2.1.3 Tariff rate

Dutiable goods imported to Brunei Darussalam are subject to Customs Import Duties Order 2007 Most import duties are imposed based on Ad Valorem rate and only some taxes are based on a specific rate, such as coffee and tea The classification of imported goods, whether dutiable or not, is based on Customs Import Duties Order 2007 Preferential tanff treatment as provided for under Brunei Darussalam's free trade agreements can be accorded to importers based on qualifications provided by the Ministry

of Foreign Affairs (MFA) Under ATIGA, 99.27% of products imported from ASEAN countries are duty-free

3.2.1.4 Foreign Direct Investment

The FDI inward and outward flow of Vietnam with Brunei were much different The missing data for FDI flow in Brunei in most of the year might cause mistake inference

Table 3-4 FDI flow between Vietnam and Brunei

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The FDI flow from Brunei to Vietnam in 2019 was twice larger than that in 2009 In

2019, Brunei had 13 more projects (including new granting, capital increase, and capital contnbution to buy shares) with 69.61 million USD in Vietnam and became the 4th largest foreign investor among ASEAN countries (behind Singapore, Thailand and Malaysia) Brunei also grants us many scholarships for training in oil and gas and aircraft maintenance every year

On the contrary, Vietnam's FDI into Brunei was much lower In 2018, the FDI of Vietnam to Brunei was 3 million USD, four times smaller than that of Brunei to Vietnam

In general, the validation of ATIGA somehow affects the FDI inflow from Brunei to Vietnam However, there were hardly any major changes regarding the outflow from our country to Brunei

Figure 3-13 Import value of Vietnam to Cambodia

Import value of Vietnam from Cambodia Unit: thousand USD

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Figure 3-14 Export value from Vietnam to Cambodia

Export value from Vietnam to Cambodia Unit: thousand USD

After ATIGA was valid, the export value went up again in 2010 Then, From 2010 to

2017, the export value fluctuated before ascending to nearly 3,800,000 thousand USD in

2018, resulting from the elimination of import duties under ATIGA In 2020, the value of export was 4,221,096 thousand USD

ATIGA still affected the export to Cambodia even though it was not as clear as the import

Figure 3-16 Import structures of Vietnam from Cambodia in 2009 and 2020

Import structure of Viet Nam from Cambodia in 2009

® Rubber and articles thereof

« Edible fruit and nuts; peel of citrus fruit or

* Aluminium and articles thereof

«Iron and steel

# Oil sceds and oleaginous fruits;

miscellaneous grains, seeds and fruit;

= Rubber and articles thereof

« Edible fruit and nuts; peel of citrus fruit

i re Pu nnrien xã Lead and articles thereof

= Others

Cambodia has a comparative advantage over Vietnam in rubber products For instance, the 4 digits good that Vietnam most imported from Cambodia is Natural Rubber (4001), in which RCA of Cambodia was 11.7 when that of Vietnam was 5.11 Therefore, rubber import has remained a high proportion throughout the years Besides, according to World Integrated Trade Solution, Vietnam is strict with importing Food and Vegetables products as more than 60% of these types of products were applied with more than three Group 6

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non-tariff measures (NTMs) However, the import from Cambodia of these products to Vietnam is significant compared to the world Therefore, it is implied that these products

of Cambodia can satisfy Vietnam’s regulations

Despite being the second-most imported goods in 2009, Wood and articles of Wood could not even make up more than 2% of the total import value in 2020 According to the General Department of Customs, the government of this country tightens the export of

organizations

Figure 3-17 Export structures of Vietnam to Cambodia in 2009 and 2020

Export structure of Viet Nam to Cambodia in 2009 Export structure of Viet Nam to Cambodia in 2020

# Tron and steel

* Articles of iron or steel

# Plastics and articles thereof

ind oils and their ts; prepared edible fats; animal

Compared 2009 to 2020, the export structure of Vietnam to Cambodia had not changed much In particular, Iron and steel, as well as Mineral products, were still the two

disadvantage in many kinds of goods related to metal and minerals (the RCAs In these

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Opposite to Brunei, Cambodia’s FDI flow to Vietnam was significantly low compared to that of Vietnam to Cambodia

Table 3-5 FDI flow between Vietnam and Cambodia

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On the other hand, Vietnam did not receive much investment from Cambodia The FDI flow from this country stood below 10% most of the year, except for the year 2018 when the value reached 82.15 million USD, even higher than the investment from Vietnam at that time In 2019, the FDI from Cambodia fell rapidly to 5.66 million USD and ranked 8th among ASEAN countries

Figure 3-18 Import value of Vietnam from Laos

Import value of Vietnam from Laos Unit: thousand USD

In 2011, a year after ATIGA became effective, the value was twice as high as in

2011, at 460,015 thousand USD In 2014, the import peaked at over 800,000 thousand USD, 20% higher than the previous year

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However, the import growth rate i 2015 and 2016 was experienced a negative mark According to VCCI, the reason behind this remarkable drop is the structure of import and export goods between the two countries is not diversified, still depending mainly on some key commodities In addition, border trade infrastructure 1s still weak, especially the market and technical infrastructure, while the two countries’ businesses are not deeply involved in each other's distribution systems

Despite that, imports from Laos rose again in 2017, 8% higher than in the previous year In 2020, Vietnam imported a total of 456,751 thousand USD from Laos Vietnam became Laos's 3rd largest import market (behind Thailand and China)

e Export:

Overall, despite the fluctuation in export growth rate throughout the period, Vietnam's export to Laos increased significantly

Figure 3-19 Export value from Vietnam to Laos

Export value from Vietnam to Laos

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In 2019, Vietnam exported 702,545 thousand USD in total value, the highest among

20 years However, it fell steadily in 2020 as the COVID-19 pandemic might affect the trade activities in Vietnam

Figure 3-20 Trade Balance between Vietnam and Laos

Trade Balance between Vietnam and Laos

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Trademap From 2001 to 2015, the trade balance between Vietnam and Laos was negative This shows that the imports from Laos were much more than imports in this period However, there was a good sign in the export of Vietnam in 2016 when it began to outweigh the import value From then, Vietnam remained trade surplus with Laos until the end of the period

3.2.3.2 Trade composition

Figure 3-21 Import structures of Vietnam from Laos in 2009 and 2020

Import structure of Viet Nam from Laos in 2009 Import structure of Viet Nam from Laos in 2020 1%1% » Rubber and articles thereof 1%

2% = Copper and articles thereof

Mineral fuels, mineral oils and distillati substances; mineral

* Wood and articles of wood; wood charcoal

= Cereals icles of wood; wood

« Salt; sulphur; earths and stone; plastering materials, lime and cement

* Coffee, tea, maté and spices

= Live animals

= Electrical machinery and equipment and

parts thereof; sound recorders and