Analyzing he Impacts of ASEAN trade Liberalization on Vietnams trading of Electronic Products

Analyzing he Impacts of ASEAN trade Liberalization on Vietnams trading of Electronic Products tài liệu, giáo án, bài giả...

Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu Tran Trung Duc Introduction During the last decades, globalization and economic integration have become the main trend of every economy in the world, whether they differ from each other in terms of scale, development level or belong to different political – social regimes There have already been many international organizations and agreements formed and pursuing the same goal, which is to build a common and fair market to improve trading between countries and bring the greatest welfare for the members Vietnam has been implementing the integration including liberalizing trade and investment within the framework of WTO agreements, ASEAN and other FTAs Among different integration processes that Vietnam is taking part in, ASEAN is the first and is always considered priority integration ASEAN is moving forward to the establishment of ASEAN Economic Community, one of the three pillars of ASEAN Community along with ASEAN Political – Security Community and ASEAN Socio-Cultural Community at the end of 2015 Among the 12 categories of goods and services that the AEC focuses on, electronic products are believed to be the crucial commodity for countries as it raises great competition In recent years, technology has been changing at a speed of lightning to become more modern and functional The demand for electric goods of consumers is large and varied in daily life Moreover, electric devices also contribute in industry, commerce, medical purposes and so on It is reasonable that the electronic industry plays an important role for whichever country in the way to industrialization and modernization, especially for developing countries like Vietnam Vietnam is still falling behind some other ASEAN members on the field of electronics That industry of Vietnam still remains young and inexperienced As the AEC is coming close, Vietnam is facing even more difficulties playing on a fair ground with other countries, when trade barriers are eliminated By using gravity model with trade data from UN Comtrade database, the purpose of this paper is to capture the impact of ASEAN integration process on the trade flows of Vietnamʼs electronic products The next section provides an overview of electronic products trading of Vietnam, while section three reviews related literature The model and results are discussed in section four, with the conclusion in section five * This article has been done under the research project QGT 13.22 “Assessing the economic integration process of Vietnam in ASEAN and ASEAN + from 2013 to 2015” with the support from Vietnam National University 62 Yokohama Journal of Social Sciences, Vol 19, No 504 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 679,822,450 941,602,485 1,307,298,397 1,543,364,885 2,070,921,598 3,277,300,781 3,655,854,748 4,198,336,493 7,080,167,785 12,845,328,084 2012 2001 604,921,490 22,306,095,146 2000 572,104,000 Table Export value of Vietnam domestically manufactured electronic products (unit: USD) Source: UN Comtrade (unit: USD) $3,000,000,000 $2,500,000,000 Japan $2,000,000,000 USA China $1,500,000,000 Singapore $1,000,000,000 Rep. of Korea Malaysia $500,000,000 $0 2005 2006 2007 2008 2009 2010 2011 2012 Source: UN UN Comtrade Source: Comtrade Figure Export value of electronic products from Vietnam to six main partners Vietnam s trade of electronic products Before the year 1996, there had been no exports of electronic products from Vietnam However, nowadays, almost 50 countries including those around the area and in the world are importing electronic products from Vietnam Since 2005, the electronic industry has always been in the top 10 industries having the highest export value in Vietnam In 2012, the total export value of this industry was over 22 billion USD – a sharp increase from merely 1.5 billion USD in 2005 Currently, Vietnam has around 500 firms working on the field of electronic production Meanwhile, foreign (foreign direct invested - FDI) firms hold a crucial position in Vietnamʼs market, taking around 80% of domestic market shares and 95% of the total export value This feature well explains that the main export markets of Vietnam are at the same time the main investors in Vietnam Figure illustrates the total amount of electronics export value to six main partners of Vietnam over Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu, Tran Trung Duc 505 63 (unit: USD) 25,000,000,000 20,000,000,000 15,000,000,000 10,000,000,000 5,000,000,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 export import Source: UN Comtrade Figure Vietnam s import and export value of electronic products a period of seven years It is shown that Japan by far was the greatest importer of Vietnam, with the value increased dramatically over years from around 800 million USD in 2005 to well under 2.5 billion USD in 2012 It was followed by the USA although there was a huge gap between export values to the two countries One significant thing is that since the beginning of 2011, export value of electric products to most partners rocketed The figures of Korea and Malaysia stayed at the bottom and only went up slightly to around 500 million USD in 2012 Despite the fact that electronic commodities are among the 10 most exported goods from Vietnam, whose export value remained high and climbed up remarkably especially during the late few years, the import value of electronics tended to stay at a higher level Most noticeable was the trend in 2007 where export value almost leveled out around 400 million USD while import value continued to go up to almost twice time as high This might not be resulted from the free trade agreements but was rather explained by the global crisis in finance during the year 2007 As big countries like the USA, Japan, China or the European countries had their economies damaged, their needs for imported goods fell down as well affecting the export value of Vietnam since they are all important partners However, Vietnam, suffering less damage from the crisis, could still maintain its consumption Therefore import value of electronics into Vietnam kept going up through the difficult time, leading to the unbalance in the trade volumes It was not until the year 2010 that export value experienced a recover and rose exponentially to catch up with import value in 2012 The electronic industry of Vietnam has been staying at the early stage of development since firms in Vietnam mostly specialize in assembling and manufacturing products while invest modestly on producing components and intermediaries Consequently, besides the final goods Vietnam imports from other countries, there have also been a massive amount of components that it had to import as well Although the intermediary industry in Vietnam is developing as the encouragement of the government, Vietnam still has to depend 506 64 Yokohama Journal of Social Sciences, Vol 19, No greatly on foreign countries As a result, not only Vietnamʼs domestic firms producing electronic products face difficulties but it is also challenging for firms providing intermediaries to compete in this market The drawback on intermediary industry making Vietnam electronic industry depend greatly on imports, which leads to low value added of its exports Literature review Assessing the impacts of trade liberalization is common topic among economists Many of them tried to analyze the impacts of liberalizing trade on social welfare, economic reconstruction, the scale and potential of industries as well as many other micro and macro indicators of the economy Among them, one of the commonly used methodology to assess the impact on trade flow is the gravity model Dan Wenting and Yang Jie (2006) used the gravity model in quantitative analysis of China-ASEAN trade, using 2000‒2004 panel data to establish the basic gravity model and the expansive gravity model in order to study the main factors that have an impact on China-ASEAN bilateral trade volume Rahman et al (2006) investigates the trade creation and trade diversion effects of a number of RTAs, with special focus on the SAFTA, by using a gravity model Apart from the traditional gravity variables, the model is augmented by some other import variables (e.g bilateral exchange rate, bilateral free trade agreement) The study finds significant intra-bloc export creation in SAFTA; however, at the same time there is evidence of net export diversion in the SAFTA Bangladesh, India and Pakistan are expected to gain from joining the RTA, while Nepal, Maldives and Sri Lanka are likely to be negatively affected In Batra (2006), an augmented gravity model equation has been used to analyze the world trade flows using a sample of 146 countries The coefficients thus obtained are then used to predict trade potential for India The results show that all three traditional “gravity” effects are intuitively reasonable and statistically significant Historical and cultural similarities also impact positively upon bilateral trade As concerns Indiaʼs trade potential, the model shows that there is tremendous potential with China and trade can be more than double if barriers and constraints are removed The research also indicates a huge potential with Pakistan Cheong (2008) evaluates changes in trade patterns of ASEAN at the Harmonized System (HS) six-digit level in the period 2001 to 2003 The estimates show that, in general, ASEAN preferential margins had a tradecreating effect at the product level; the majority of ASEAN countries benefited significantly from this trade creation These results suggest that ASEAN trade liberalization in the early 2000s had positive welfare effects Sheng et al (2012), uses an extended gravity model to shed light on the impact of the free trade area agreement between the ASEAN and the Peopleʼs Republic of China (PRC) on the membersʼ trade flows and trade patterns Results from the extended gravity model show that the free trade agreement leads to substantially higher bilateral trade between ASEAN and the PRC, more than what a conventional gravity model predicts The increase is concentrated in the ASEAN countries with stronger industrial linkages with the PRC Contributing to the study of international trade and integration, there have also been some researches using gravity model to assess Vietnamʼs trade liberalization Thai Tri Do (2006) examines the bilateral trade between Vietnam and 23 European countries based on Gravity model and panel data for 1993 to 2004 Estimates indicate that economic size, market size and real exchange rate of Vietnam and 23 European countries play major role in bilateral trade between Vietnam and these countries Nguyen Thi Ha Trang et Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu, Tran Trung Duc 507 65 al (2011) shows that the fast GDP growth of Vietnam, the large population of importing countries, the wide economic gap between Vietnam and the importing countries, the depreciation of domestic currency, the free trade agreements that Vietnam signed and the shared border with the importing countries contribute to the increase of Vietnamʼs export of all product groups In contrast, the GDP of importing countries and population of Vietnam have no clear impacts on the export of any product groups Dinh Thi Thanh Binh et al (2012), applies gravity model in order to analyze bilateral trade activities between Vietnam and 60 countries from 2000 to 2010 The estimated results reveal that economic size of Vietnam, economic size and market size of foreign partners, distance and culture have huge effects on bilateral trade flows between Vietnam and these 60 countries In summary, the gravity model is a key tool for researchers interested in the effects of trade-related policies The recent Gravity model includes a great number of variables, beyond those such as tariffs, which are imposed at the border, to cover behind-the-border barriers as well Moreover, the gravity model is applied not only to general trade flows, but also to different segmented sectors Methodology and estimated results Model Built on the idea of Gravity theory by Newton, the Gravity model demonstrates that trade volume between two particular countries have the positive correlation with the scale of economy in each countries and negative one with the distance between them In order to assess the impacts of ASEAN trade liberalization on Vietnamʼs trade flows of electronic products, the gravity model in this paper follows the one used by Nguyen Anh Thu (2012), which takes the following form: �� �� �� �� �� �� �� �� In which: Mij is the trade value between country (i) and country (j) (in terms of export/import value) G is constant Yi, Yj are the economic scales of country (i) and country (j) In general Y is measured in Gross Domestic Products (GDP) GDP/P: Gross domestic product per capita Dij is the distance between country (i) and country (j) (which represents the cost of trading between the two countries) t implies years Within the equation, k takes the value from to which is equivalent to free trade agreements AFTA, ACFTA, AKFTA, AJCEP and VJEPA respectively These dummy variables take the value of if both importers and exporters are participants in that agreement in year t, and the value of in other cases Consequently the Yokohama Journal of Social Sciences, Vol 19, No 508 66 Table Defined year in which each FTAs went into effect FTAs AFTA ACFTA AKFTA AJCEP VJEPA Year 2006 2006 2007 2008 2009 value of dummy variable for each FTAs depends on the mark of time when that FTA was put through and went into effect As for the AFTA, although Vietnam became a member of ASEAN since 1995, within this paper we only focus on the impacts of the AEC In order to so, we take the year in which the blueprint of AEC, including all of its elements and characteristics pursuing the establishment of AEC in 2015, was introduced and committed by the member countries (followed by adjustments in policies in the next years, such as the change from the ASEAN Free Trade Area-Common Effective Preferential Tariff to the ASEAN Trade in Goods Agreement in 2008), which was the year of 2006 The model is applied on Vietnamʼs export and import of electronic products with partners (in which j denotes Vietnam and i represents the partner country) Data The data on trade volume in electronic products between Vietnam and 47 partner countries over the period of 13 years (2000–2012) is collected from UN Comtrade The partners spread on a global scale geographically and in terms of trade flows with Vietnam As we use the real GDP in this model, it is necessary to deflate the left hand-side of the model, the trade value whether it is import value or export value Therefore the deflated trade value is conducted in the formula: Deflated trade value = (Nominal trade value/Consumer price index) ⊗ 100 As the nominal trade values are reported by Vietnam, we use Vietnamʼs annual consumer price index provided by World Bank (which sets the year of 2010 as base year) The real GDP and GDP per capita used in this model are calculated following the formula: Real GDP = (nominal GDP/GDP deflator) ⊗ 100 Real GDP per capita = (nominal GDP per capita/GDP deflator) ⊗ 100 In which all the nominal values are gathered from the website of World Bank while the GDP deflator is provided by the website of International Monetary Fund According to the IMF, the GDP deflator is countryspecific, meaning it was conducted separately in each nations and not equal 100 in the specified base year (each nation set their own base year and there were differences in original data in fiscal year) However, this does not affect the result of the model since, within this model, we only capture the movements and volume of changes in GDP deflator of each countries over the estimated period of time, not its absolute values Distance between countries is the geographical gap between the capital cities of the two countries in the partnership, conducted by the website “Centre dʼ Etudes Prospectives et dʼInformations Internationales” (CEPII) Estimated results Export model It is clearly demonstrated from the table that real GDP and real GDP per capita in both countries have a strong connection to the export value of electronic products from Vietnam to its partner The GDP of the two Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu, Tran Trung Duc 509 67 Table Estimated results from export model Coefficient Std Error T-Statistic Prob C -323.1442* 30.87393 -10.46657 0.0000 LOG(GDPi) 1.009185* 0.065927 15.30756 0.0000 Variables LOG(GDPvn) 16.70496* 1.892135 8.828630 0.0000 LOG(GDPPCi) 0.500406* 0.151525 3.302457 0.0010 LOG(GDPPCvn) -12.37705* 2.693345 -4.595419 0.0000 LOG(Incomegap) -0.441550* 0.112899 -3.911012 0.0001 LOG(Dist) -2.056969* 0.121322 -16.95457 0.0000 AFTA 1.811531** 0.940629 1.925872 0.0546 ACFTA -1.336528** 0.754578 -1.771224 0.0771 AJCEP -0.235797 0.616671 -0.382371 0.7023 AKFTA -0.344310 0.597680 -0.576078 0.5648 VJEPA 0.331333 1.125764 0.294318 0.7686 R-square: 0.572056 Adjusted R-square: 0.563841 (*), (**) equivalent to the signiicant level of 5% and 10% respectively countries can illustrate the development of industry in each country Taking a positive coefficient of 1, GDP of partner countries shows that Vietnam tend to export electronic products to big and medium size economies Meanwhile, the coefficient of Vietnamʼs GDP stays at a very high level of around 16.7 that can be explained that as the economy of Vietnam becomes bigger, more products are produced to satisfy both domestic and foreign demand, leading to an increasing export value By contrast, real GDP per capita of Vietnam takes a very low negative coefficient value of minus 12.37, telling that the increase in Vietnam individual citizenʼs income leads to a greater size of domestic market as the demand and consumption within the country go up as well due to the income effect That, along with many effective policies and campaigns from Vietnamʼs government to promote domestic products and motivate Vietnamʼs citizens to use Vietnamese products, helps increase the demand for every category of products including this commodity and consequently reduce the amount of exports Meanwhile, the estimation of income gap and distance seems to prove the expectation of the Gravity model, both have the negative correlation with export value Holding every other factor constant, with every rise of 1% in the income gap, the export value experiences an average drop of approximately 0.44% While distance has a stronger effect as it decreases trade by an average 2% for each 1% it climbs up This proves that trading is more likely to happen between countries with close development level and distance Through the result of the model, it seems that only the AFTA and the ACFTA have the impacts on Vietnamʼs export value of electronic products, but the effects from these two agreements are opposite to each other as the coefficients of them take the value of 1.81 and minus 1.33 respectively As the main objective of taking part in an FTA is to enhance trade partnership between countries as discussed in previous parts, it is easy to understand why AFTA can boost the value export of member countries including Vietnam Not only does the AFTA cause trade creation between member countries due to the elimination of trade barriers (taxes, 68 510 Yokohama Journal of Social Sciences, Vol 19, No tariffs, non-tariff barriers, etc.), making them establish greater trading ties between themselves, but it also leads to trade diversion which shifts trading with non-members of ASEAN to trading with those participants of the AFTA However, that theory does not hold completely true to the trade agreement between China and the ASEAN The ACFTA are introduced to improve total welfare and trading of the whole area (the ASEAN and China) The reasons why Vietnamʼs export value does not seem to be supported by ACFTA will be further discussed in the next section At the confidence level of either 5% or 10%, AJCEP, AKFTA and VJEPA are yet to have such noticeable influences on Vietnamʼs export value of electronic products This is similar to the findings of some other studies (Lee and Plummer, 2011; Nguyen Anh Thu, 2012) Import model Similarly to the export model, in this import model, at the confidence level of 5%, GDP of exporter (the partner country of Vietnam) have a positive correlation with the import value (1.25) Income gap and distance still take the negative value of minus 0.61 and minus 2.05, proving that imports tends to reduce as the gap between the two countries go up economically and geographically This is suitable to the expectation of the Gravity model theory Surprisingly, while AFTA has a positive effect on Vietnamʼs exportation of electronic products, it seems to reduce the import value in the same category of commodity (the coefficient is minus 1.4 at the significant level of 10%) This is, in fact, illustrated in Figure of this study where export value went up along with the import value but with a higher speed to catch up import value in 2012 This may prove that with the integration within ASEAN, the intermediary industry for electronic products has been improved, supporting the manufacturing industry As the quantity of domestic electronic goods rose over the late few years, not only did Vietnam satisfy the domestic needs but it also made a great effort in switching from importing to exporting It also suggests that the quality of domestically produced electronic goods has been enhanced and this, along with many promoting policies from the government, helps raise the trust and loyalty of customers in Vietnamʼs domestic goods It is believed that the domestic manufacturing firms have a lot of rooms to grow further in the future It draws attention when ACFTA decreases the export value but helps increase the import value of electric products in Vietnam (taking the coefficient of 1.31 in the import model) As mentioned above, the impacts of a free trade agreement may not be identical among the members In this situation, it can be explained that, of the two countries, China has the comparative advantages in producing electronic products Proving to have a large force of labor at low price, more advanced development background than that of Vietnam, China has earned a competitiveness edge to overwhelm the market with its products Products made from China are not expensive which are affordable by all classes of people in the society At the same time, they are useful, functional and up to date with the development of technology as well as changes in consumersʼ tastes Consequently, China has become a large exporter in the global market, taking away market shares from Vietnamʼs exporters while Vietnamʼs consumers keep purchasing and consuming products imported from this big producer Despite having no impacts on the export value of Vietnamʼs electronic products, the AJCEP tends to have a negative influence on the import value (minus 0.88) Although Vietnam and Japan have remained in partnership for decades and therefore the VJEPA does not affect trade between them significantly, the agreement between Japan and the ASEAN allows Japanese enterprises to broaden their business in other countries those are more potential and advanced in technology, as well as management skills, than Vietnam, such as Malaysia, Singapore, etc That might lead to the shift of focus in trading Japanese electronic products Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu, Tran Trung Duc 511 69 Table Estimated results from import model Coefficient Std Error t-Statistic Prob C -7.297093 28.02528 -0.260375 0.7947 LOG(GDPi) 1.251431* 0.058793 21.28542 0.0000 Variable LOG(GDPvn) -0.339478 1.713569 -0.198112 0.8430 LOG(GDPPCi) 0.925789* 0.170709 5.423189 0.0000 LOG(GDPPCvn) 2.572149 2.436520 1.055665 0.2916 LOG(Incomegap) -0.612003* 0.133475 -4.585139 0.0000 LOG(Dist) -2.046722* 0.112439 -18.20302 0.0000 AFTA -1.400218** 0.814407 -1.719309 0.0862 ACFTA 1.309336* 0.662499 1.976358 0.0486 AJCEP -0.878630** 0.532610 -1.649669 0.0996 AKFTA 1.205032* 0.515817 2.336160 0.0199 VJEPA 0.767078 0.973055 0.788319 0.4309 R-square: 0.649480 Adjusted R-square: 0.642079 (*), (**) equivalent to the signiicant level of 5% and 10% respectively to other countries in the area, which consequently brings down the quantity of electronic goods imported to Vietnam The AKFTA does not have significant impact on exports of Vietnam but has positive impact on import with the coefficient of 1.21 This means the free trade agreement benefits Korean electronic-firms by giving them more incentives and fewer trade barriers so they can jump into the ASEAN market It is true that in recent years, Korean electronic products have been used more widely, especially mobile phones and civil devices (some of the famous names are Samsung Electronics, Sky Electronics, LG Electronics, SY Telecom, etc.) Korea also made a huge amount of investments to countries within the region including Vietnam, thus boosting the imports of intermediate products to serve production requirement Conclusion Higher GDP in Vietnam and the partner countries lead to the increase in both export and import value of electronic products As the total output of a countries rises, there will not be enough goods to satisfy the domestic market and also inventories for exporting to other countries Vietnam tends to trade with medium and big size partners as the higher its partnersʼ GDP is, the more trade value is created The GDP per capita of Vietnam has a great influence on export value As real income of individual citizens goes up, it leads to higher demand for the products and the domestic market gets bigger Consequently, smaller quantity of goods is exported Huge income gap and long distance between partners discourage both export and import The AFTA has a positive influence on export value of Vietnam while having a negative one on its import value The free trade agreements of ASEAN boost trade creation between member countries while diverse trade from non-members to those within the organization, due to many incentives related to trade barriers As Vietnam electronic industry has been improving in recent years, on one hand, it becomes able to provides more Yokohama Journal of Social Sciences, Vol 19, No 512 70 goods for the foreign market and enhance exportation On the other hand, the demand from domestic market went up as well since more consumers choose to use domestically manufactured devices instead of those imported aboard, which discourages importing China is a strong competitor of Vietnam in electronic market since the ACFTA was established Although electronic products from China are sold at very low prices, they are functional and catch up fast with the trends and needs of consumers as well as the fast development of technology As a result, goods made in China are still popular in the global market, driving off exportation from Vietnam while still account for a great share of Vietnamʼs domestic market The findings of this paper might have some implications for developing electronic industry in Vietnam Firstly, developing intermediary electronic industry is a key issue since it is considered as an important factor for developing the electronic industry This will help reduce the cost of importing components, create higher value-added for Vietnamese products Moreover, it is important to classify the proper products for Vietnamʼs electronic industry, complete the policies and structure in order to form the effective production network in Vietnam, which is linked to the region and to the world Abbreviations WTO World Trade Organization ASEAN Association of South East Asian Nations FTAs Free Trade Agreements AEC ASEAN Economic Community RTAs Regional Trade Agreements SAFTA South America Free Trade Agreement AFTA ASEAN Free Trade Agreement ACFTA ASEAN – China Free Trade Agreement AKFTA ASEAN – Korea Free Trade Agreement AJCEP ASEAN – Japan Comprehensive Economic Partnership VJEPA Vietnam Japan Economic Partnership Agreement References Batra, A (2006) Indiaʼs global trade potential: The gravity model approach Global Economic Review, 35(3), 327 361 Cheong, D (2008) The Effects of AFTA: A Disaggregated Analysis Johns Hopkins University Dinh Thi Thanh Binh, Nguyen Viet Duong, and Hoang Manh Cuong (2012) Applying Gravity model to analyze trade activities of Vietnam, Foreign trade University Lee, H and Plummer, M G (2011) Assessing the Impact of the ASEAN Economic Community OSIPP Discussion Paper: DP-2011-E-002 Nguyen Anh Thu (2012) Assessing the impact of Vietnamʼs integration under AFTA and VJEPA on Vietnamʼs trade flows, Gravity model approach Yokohama Journal of Social Sciences, Vol 17, No 2, pp 137 148 Nguyen Thi Ha Trang, Nguyen Thi Thanh Tam, and Vu Hoang Nam (2011) An inquiry into the determinants of Vietnamese product export, DEPOCEN working paper series, No 08 Rahman, M., Shadat, W B., & Das, N C (2006) Trade potential in SAFTA: An application of augmented gravity model CPD Occasional Paper Series, 61 Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu, Tran Trung Duc 513 71 Sheng, Y., Tang, H C., & Xu, X (2012) The Impact of ACFTA on People’s Republic of China-ASEAN Trade: Estimates Based on an Extended Gravity Model for Component Trade (No 99) Asian Development Bank Thai Tri Do (2006), A gravity model for trade between Vietnam and twenty-three European countries Department of Economics and Society, Dalarna University, Sweden Wenting, D and Jie, Y (2006) Gravity Model in China and ASEAN Trade Real Diagnosis Analysis Asia-Paciic Economic Review, 2006 (6) Nguyen Anh Thu, Lecturer, University of Economics and Business, Vietnam National University, Hanoi Tran, Trung Duc, University of Economics and Business, Vietnam National University, Hanoi ... etc That might lead to the shift of focus in trading Japanese electronic products Analyzing the Impacts of ASEAN Trade Liberalization on Vietnam’s Trading of Electronic Products Nguyen Anh Thu,... negative one with the distance between them In order to assess the impacts of ASEAN trade liberalization on Vietnamʼs trade flows of electronic products, the gravity model in this paper follows the one... trade liberalization is common topic among economists Many of them tried to analyze the impacts of liberalizing trade on social welfare, economic reconstruction, the scale and potential of industries