ESTIMATING THE POTENTIAL IMPACTS OF A FREE TRADE AGREEMENT BETWEEN VIETNAM AND THE EUROPEAN UINON ON VIETNAM’S FISHERY EXPORTS

5.1 Conclusion Based on the assessment analysis of potential impacts of EVFTA on Vietnam’s fishery exports to the EU, the thesis draw out some following conclusions:  Regarding Vietnam – EU trade relation in fishery sector EU is one of the most important partners of Vietnam in field of trade. For the period from 2001 to 2013, Vietnam has continuously increasing surplus trade balance with the EU. The major products Vietnam exports to the EU are textiles, footwears, fisheries, coffee, computers, phones and accessories. While Vietnam imports from the EU high technology and capital products such as machinery, equipment, tools, vehicles, pharmaceuticals, dairy products, etc. EU is one of the three largest fishery export markets of Vietnam since 2005. There is an increasing trend in fishery exports turnover from Vietnam to the EU over the period from 2001 to 2011. However, the value has decreased since 2012. The major competitors of Vietnam fishery exports in the EU market are Norway, China, Ecuador, Iceland, Thailand, India, etc. In addition, most of Vietnam’s fishery exports to the EU belong to HS03 (Fish, crustaceans, molluscs, aquatic invertebrates), average account for 82.69% of total export value. The small share belongs to the products of HS1604 (Prepared or preserved fish, fish eggs, caviar) and HS1605 (Crustaceans, molluscs, etc prepared or preserved). Germany is the largest export partner of Vietnam in the EU with an average value over USD 200 million per year, followed by Italy, Netherlands, Spain, etc.  Regarding EVFTA negotiation process Up to now, EVFTA has undergone twelve official rounds and both Vietnam and the EU express the detemination to complete and come to conclusion in 2015. EVFTA is considered a comprehensive agreement on goods, services and investment, government procurement. In addition to tariffs and nontariff barriers elemination, there are other traderelated issues, regulatory issues, competition, and intellectual property rights.  Regarding the potentials to bring about benefits of EVFTA In order to figure out the potentials to bring about benefits of the forthcoming EVFTA, this thesis presents clearly with the analysis of three main trade indicators, namely, revealed comparative advantage, trade intensity index and export specialisation index. i. Revealed Comparative Advantage (RCA): RCA index of Vietnam fisheries is much greater than 1 which implies that Vietnam has great comparative advantage in producing and exporting fishery products. However, RCA index tends to decrease gradually (from 14.19 in 2001 to 5.52 in 2013) and has reduced sharply since 2009. This implies that Vietnam fisheries seem to lose their level of comparative advantages year by year in the world market. ii. Export Specialization (ES): The ES index of Vietnam fishery exports is much larger than 1 implies that Vietnam has favourable specialization opportunities in the EU market. Thus, EVFTA will help create opportunities for Vietnam to continue promoting exports to the EU market. However, the ES index of Vietnam fisheries tends to decrease (from 14.15 in 2001 to 4.88 in 2013). It decreased sharply in 2009 before increasing slightly in 2011 and continued plummet since 2012. This implies that Vietnam fisheries seem to lose their level of comparative advantages year by year in the EU market. iii. Trade Itensity (TI): The TI index of Vietnam’s fishery exports to the EU is very high and has increasing trend (from 24.35 in 2004 to 46.09 in 2013). This means larger trade flows than might be expected. In this sense, higher fishery exports value are more favourable to EVFTA. To sum up, Vietnam has comparative advantage in exporting fishery products in general and advantage in the EU market in particular. EVFTA will help create opportunities for Vietnam to continue promoting exports to the EU market.  SMART simulation results Regarding scenario 1: With unchanged tariff rate, Vietnam will reduce USD 19,537.5 thousand in export revenue, equivalently 13.23% reduction in growth of trade because of the loss market to major competitors like China, India, Norway, Thailand, Iceland, etc. Tunas (yellowfin) frozen is the product reducing the highest export revenue by USD 13,377.1 thousand and equivalent to 46.75% growth reduction. It is followed by fish fillets and other fish meat, Aquatic invertebrates nes, frozen or preserved; Scallops other than live, fresh or chilled; Crabs, frozen; Crustaceans nes, frozen; Swordfish; Snails, edible (except sea snails); Cuttle fish, squid, live, fresh or chilled). Regarding scenario 2: When Vietnam’s fishery exports receive 50% tariff reduction in the EU market, the potential change in export revenue from Vietnam to the EU will be USD 23,030.29 thousand, equivalent to 13.49% value growth. It can be said that the 50% reduction will result in significant increase in fisheries export revenue of Vietnam. On the contrary, there is a reduction in total trade and growth of export revenue from Norway, India, China, Thailand, Morocco etc. There is an opportunity for Vietnam compared with major competitors because they shall suffer trade diversion while Vietnam will have the great opportunity to create a strong trade creation with the EU. Tunas (yellowfin) fozen is the product gain the highest increae in export revenue by USD 17,415.39 thousand, equivalent to 59.1% growth rate. It is followed by Albacore or longfinned tunas; Aquatic invertebrates nes, frozen or preserved; Fish fillets and other fish meat, Cuttle fish, squid, frozen, dried, salted or in brine; Octopus, frozen, dried, salted or in brine; Dried fish, other than cod, not smoked; Scallops other than live, fesh or chilled, etc. Regarding scenario 3: Under the tariff elimination on fishery exports, Vietnam will increase USD 89,796.53 thousand in export revenue to the EU market and the potential growth of export value in this scenario is 60.8%. On the contrary, Norway and India suffer in the order USD 254.842 thousand and USD 250.727 thousand reduction of export revenue, equivalently to 0.04% and 0.09% growth rate. China and Thailand also have the export revenue fall of 0.08% and 0.07%, respectively. It can be said that tariff elemination will result in significant increase in export revenue of Vietnam. There is a great opportunity for Vietnam compared with major competitors because they will suffer trade diversion while Vietnam will have the great opportunity to create a strong trade creation with the EU. Tunas (yellowfin) frozen is the product gain the highest increase in export revenue by USD 72,808.27 thousands and equivalently 247.08% growth rate. It is followed by Cuttle fish, squid, frozen, dried, salted or in brine; Aquatic invertebrates nes, frozen or preserved; Fish fillets and other fish meat; Albacore or longfinned tunas; Octopus, frozen, dried, salted or in brine; Scallops other than live, fresh or chilled; Dried fish, other than cod, not smoked; Skipjack or stripbellied bonito; Crustaceans nes, frozen; Crabs, frozen; Smoked fish and fillets other than herrings or salmon, etc. Regarding scenario 4: Under the assumption of fishery exports from Vietnam, Thailand, India to the EU will be duty free; the potential increase of Vietnam fishery export turnover to the EU is USD 87,100.55 thousand, equivalent to 59.97% growth rate while India and Thailand increase USD 102,451.8 thousand and USD 64,092.41 thousand. This implies that other FTAs conclued by the EU and other countries will not much affect negatively on Vietnam’s fishery exports to the EU. Tunas (yellowfin) frozen is the product gains the highest increase in export revenue by USD 72,682.58 thousand, equivalent to 246.65% growth rate. It is followed by Cuttle fish, squid, frozen, dried, salted or in brine; Aquatic inverbrates nes, frozen or preserved; Albacore or longfinned tunas, Scallops other than live, fresh or chilled; Dried fish, other than cod, not smoked; Skipjack or stripbellied bonito; Tunas nes, frozen, whole, Smoked fish and fillets other than herrings or salmon; Cod (Gadus morhua, Gadus ogac, Gadus macrocephalus); Snails other than sea snails; Livers or roes of fish, dried, smoked, salted or in brine; Anchovies (Engraulis spp.); Mussel, frozen, dried, salted or in brine. In summary, the results of SMART based on four scenarios show that the fishery exports from Vietnam to the EU will significantly increase under the tariff reduction and duty free scenarios. On the basis of the analysis fishery exports from Vietnam to the EU, indicators as well as SMART simulation, we can see the opportunities and challenges of EVFTA toward Vietnam’s fishery exports.

VIETNAM NATIONAL UNIVERSITY, HANOI UNIVERSITY OF ECONOMICS AND BUSINESS FACULTY OF INTERNATIONAL BUSINESS AND ECONOMICS - - THESIS ESTIMATING THE POTENTIAL IMPACTS OF A FREE TRADE AGREEMENT BETWEEN VIETNAM AND THE EUROPEAN UINON ON VIETNAM’S FISHERY EXPORTS Supervisor: MA Vu Thanh Huong Student: Nguyen Thi Huong Honor class: QH-2011-E CLC Hanoi, 2015 i TABLE OF CONTENTS TABLE OF CONTENTS i ABBREVIATIONS iii LIST OF FIGURES v LIST OF TABLES v DECLARATION vii ACKNOWLEDGEMENT viii CHAPTER 1: INTRODUCTION 1.1 Background 1.2 Research objective 1.3 Research question 1.4 Research scope 1.5 Synopsis of the thesis CHAPTER 2: LITERATURE REVIEW 2.1 Overview of FTA 2.1.1 Concept 2.1.2 Effects of FTA 2.1.2.1 Static effects 2.1.2.2 Dynamic effects 2.2 The EU-Vietnam FTA (EVFTA) 10 2.2.1 EVFTA negotiation rounds 10 2.2.2 Review of related studies 13 CHAPTER 3: METHODOLOGY AND DATA 17 3.1 Evaluating impacts of FTA methods 17 3.1.1 Computable General Equilibrium Model (CGE) 17 3.1.2 Partial equilibrium 20 3.1.3 Gravity model 23 3.2 Methodology 25 ii 3.2.1 Trade indicators 26 3.2.2 SMART model 28 3.3 Data 28 CHAPTER 4: RESULTS AND DISCUSSION 30 4.1 Overview of Vietnam and EU trade relation 30 4.2 Overview of Vietnam fishery exports to the EU 34 4.3 EU's fisheries import tariffs on Vietnam 40 4.4 Diagnosing the likely impacts of EVFTA on Vietnam's fishery exports to the EU 42 4.4.1 Revealed comparative advantage (RCA) 43 4.4.2 Export specialization (ES) 44 4.4.3 Trade intensity (TI) 46 4.5 SMART simulation results 47 4.5.1 Scenarios for Vietnam fishery exports 47 4.5.2 SMART results and findings 49 CHAPTER 5: CONCLUSION AND IMPLICATIONS 62 5.1 Conclusion 62 5.2 Implications 68 Refferences 70 iii ABBREVIATIONS ADB Asian Development Bank AFTA ASEAN Free Trade Agreement APEC Asia-Pacific Economic Cooperation ASEAN CGE Association of South East Asian Nations Computable General Equilibrium ES Export Specialization EU European Union EVFTA FTA GATT GDP GTAP HS MOIT MUTRAP EU-Vietnam Free Trade Agreement Free Trade Agreement General Agreement on Tariffs and Trade Gross Domestic Product Global Trade Analysis Project The Harmonized Description and Coding System Ministry of Trade and Industry The EU multilateral trade project with Vietnam PTA Preferential Trade Agreements RCA Revealed Comparative Advantage RTA Regional Trade Agreement Agreement on the Application of Sanitary and SPS Phytosanitary Measures TBT Technical Barriers to Trade Agreement TI UNCTAD Trade Intensity United Nations Conference on Trade and Development USD US Dollar iv Vietnam Association of Seafood Exporters and VASEP Producers VJEPA Vietnam-Japan Economic Partnership Agreement WITS World Integrated Trade Solution WTO World Trade Organization v LIST OF FIGURES Figure 2.1: Trade creation of joining FTA Figure 2.2: Trade diversion of joining FTA Figure 4.1: The EU and Vietnam trade balance from 2001-2013 31 Figure 4.3: Major markets of Vietnam fishery exports in 2013 (%) 34 Figure 4.4: Vietnam fishery exports turnover to the EU from 2001 to 2013 35 Figure 4.5: Major partners in the EU of Vietnam’s fishery exports in period 2009-2013 40 LIST OF TABLES Table 4.1: Top export partners of Vietnam in 2013 31 Table 4.2: Major Vietnam commodites exported to the EU 2007-2013 32 Table 4.3: Major commodites Vietnam imports from the EU 33 Table 4.4 : Vietnam’s fishery product codes to EU from 2001-2013 36 Table 4.5: Vietnam’s export turnover of HS03 with digit 37 Table 4.6: Major fishery exporters to the EU market 38 Table 4.7: Weighted average tariff rates applied by the EU on HS03 from some countries 41 Table 4.8: Weighted preferential tariff applied by the EU on the HS4 digit Vietnam fishery products from 2011 to 2013 42 Tabe 4.9: RCA index of Vietnam and EU fishery exports 43 Table 4.10: ES index of Vietnam fisheries exports 44 Table 4.11: Trade intensity index of Vietnam HS03 export to the EU 46 Table 4.12: Overview of trade effects in scenarios 49 Table 4.13: Top countries gain most in scenario 51 Table 4.14: Major countries lose the market in scenario 52 Table 4.15: Vietnam’s fishery products lose most 53 Table 4.16: Top countries lose the market in the scenario 54 Table 4.17 : Vietnam products gain most in scenario 55 vi Table 4.18: Top countries lose total trade effect in scenario 57 Table 4.19: Top Vietnam’s products gain most in scenario 57 Table 4.20: Total trade effects of some countries in scenario 59 Table 4.21: Vietnam’s products gain most in scenario 59 vii DECLARATION “I hereby declare that the work contained in this thesis is of my own and has not been previously submitted for a degree or diploma at this or any other higher education institution The thesis is not previously published or written by another person” 1st May, 2015 viii ACKNOWLEDGEMENT First of all, I would like to express my sincere thanks to MA Vu Thanh Huong for her enthusiastic support during the period of implementing the thesis Thank to her supervison and guidance, I not only gain knowledges but also sharpen skills that are helpfull in the process of my working and further learning in the future I would like to give thanks to the Falculty of International Business and Economics, University of Economics and Business and Vietnam National University, Ha Noi for teaching and giving me a chance to complete this thesis Finally, I would like to express my gratitude to my family and friends who always stand by me to support and encourage me to fulfill this thesis Because of research time limitation, the thesis can not avoid faults and drawbacks Thus, I am looking forward to receiving comments, feedbacks and suggestions to more complete this thesis Respectfully hope the best wishes to my lectures Student Nguyen Thi Huong CHAPTER INTRODUCTION 1.1 Background Growing integration of economies and societies around the world is evident via multilateral and bilateral efforts However, the Doha Round of the WTO has not progressed as expected while Free Trade Agreement (FTA) is becoming a strong trend, especially in the Asia – Pacific region, which is expected to have the most dynamic development all over the world in coming decades (MUTRAP, 2014) As an active member of ASEAN, Vietnam does not stand apart from this trend Specifically,Vietnam has participated in eight Free Trade Agreements including both regional and bilateral ones as well as actively involved in negotiating severals agreements The increasing and extensive participation in international economic integration plays an important role for export and import activities Compared with USD 789.1 million in 1986, the export turnover in 2013 increased by about 167 times (USD 132.2 billion) Vietnam is playing an increasingly significant role in global merchandise exports After having trade deficit in many years, Vietnam has trade surplus in 2012 of USD 287 million; USD million in 2013 and USD 1.9 billion for first 10 months of 2014 (General Department of Vietnam Customs, 2014) Diplomatic relation between the European Union (EU) and Vietnam was set up for the first time in October 1990 and from here, Vietnam has become one of the main partners of the European Union in ASEAN One of the first milestone of bilateral relation was the signing of Cooperation Framework Agreement (FCA) in 1995 Then, the Comprehensive Partnership Agreement EU - Vietnam (PCA) was signed in June 2012 which expresses the commitments of the EU to the conduction of modern, broad-based and mutually beneficial relationship with Vietnam The PCA broadens the scope of Vietnam- 62 CHAPTER CONCLUSION AND IMPLICATIONS 5.1 Conclusion Based on the assessment analysis of potential impacts of EVFTA on Vietnam’s fishery exports to the EU, the thesis draw out some following conclusions:  Regarding Vietnam – EU trade relation in fishery sector EU is one of the most important partners of Vietnam in field of trade For the period from 2001 to 2013, Vietnam has continuously increasing surplus trade balance with the EU The major products Vietnam exports to the EU are textiles, footwears, fisheries, coffee, computers, phones and accessories While Vietnam imports from the EU high technology and capital products such as machinery, equipment, tools, vehicles, pharmaceuticals, dairy products, etc EU is one of the three largest fishery export markets of Vietnam since 2005 There is an increasing trend in fishery exports turnover from Vietnam to the EU over the period from 2001 to 2011 However, the value has decreased since 2012 The major competitors of Vietnam fishery exports in the EU market are Norway, China, Ecuador, Iceland, Thailand, India, etc In addition, most of Vietnam’s fishery exports to the EU belong to HS03 (Fish, crustaceans, molluscs, aquatic invertebrates), average account for 82.69% of total export value The small share belongs to the products of HS1604 (Prepared or preserved fish, fish eggs, caviar) and HS1605 (Crustaceans, molluscs, etc prepared or preserved) Germany is the largest export partner of Vietnam in the EU with an average value over USD 200 million per year, followed by Italy, Netherlands, Spain, etc 63  Regarding EVFTA negotiation process Up to now, EVFTA has undergone twelve official rounds and both Vietnam and the EU express the detemination to complete and come to conclusion in 2015 EVFTA is considered a comprehensive agreement on goods, services and investment, government procurement In addition to tariffs and non-tariff barriers elemination, there are other trade-related issues, regulatory issues, competition, and intellectual property rights  Regarding the potentials to bring about benefits of EVFTA In order to figure out the potentials to bring about benefits of the forthcoming EVFTA, this thesis presents clearly with the analysis of three main trade indicators, namely, revealed comparative advantage, trade intensity index and export specialisation index i Revealed Comparative Advantage (RCA): RCA index of Vietnam fisheries is much greater than which implies that Vietnam has great comparative advantage in producing and exporting fishery products However, RCA index tends to decrease gradually (from 14.19 in 2001 to 5.52 in 2013) and has reduced sharply since 2009 This implies that Vietnam fisheries seem to lose their level of comparative advantages year by year in the world market ii Export Specialization (ES): The ES index of Vietnam fishery exports is much larger than implies that Vietnam has favourable specialization opportunities in the EU market Thus, EVFTA will help create opportunities for Vietnam to continue promoting exports to the EU market However, the ES index of Vietnam fisheries tends to decrease (from 14.15 in 2001 to 4.88 in 2013) It decreased sharply in 2009 before increasing slightly in 2011 and continued plummet since 2012 This implies that Vietnam fisheries seem to lose their level of comparative advantages year by year in the EU market iii Trade Itensity (TI): The TI index of Vietnam’s fishery exports to the EU is very high and has increasing trend (from 24.35 in 2004 to 46.09 in 2013) 64 This means larger trade flows than might be expected In this sense, higher fishery exports value are more favourable to EVFTA To sum up, Vietnam has comparative advantage in exporting fishery products in general and advantage in the EU market in particular EVFTA will help create opportunities for Vietnam to continue promoting exports to the EU market  SMART simulation results Regarding scenario 1: With unchanged tariff rate, Vietnam will reduce USD 19,537.5 thousand in export revenue, equivalently 13.23% reduction in growth of trade because of the loss market to major competitors like China, India, Norway, Thailand, Iceland, etc Tunas (yellowfin) frozen is the product reducing the highest export revenue by USD 13,377.1 thousand and equivalent to 46.75% growth reduction It is followed by fish fillets and other fish meat, Aquatic invertebrates nes, frozen or preserved; Scallops other than live, fresh or chilled; Crabs, frozen; Crustaceans nes, frozen; Swordfish; Snails, edible (except sea snails); Cuttle fish, squid, live, fresh or chilled) Regarding scenario 2: When Vietnam’s fishery exports receive 50% tariff reduction in the EU market, the potential change in export revenue from Vietnam to the EU will be USD 23,030.29 thousand, equivalent to 13.49% value growth It can be said that the 50% reduction will result in significant increase in fisheries export revenue of Vietnam On the contrary, there is a reduction in total trade and growth of export revenue from Norway, India, China, Thailand, Morocco etc There is an opportunity for Vietnam compared with major competitors because they shall suffer trade diversion while Vietnam will have the great opportunity to create a strong trade creation with the EU Tunas (yellowfin) fozen is the product gain the highest increae in export revenue by USD 17,415.39 thousand, equivalent to 65 59.1% growth rate It is followed by Albacore or longfinned tunas; Aquatic invertebrates nes, frozen or preserved; Fish fillets and other fish meat, Cuttle fish, squid, frozen, dried, salted or in brine; Octopus, frozen, dried, salted or in brine; Dried fish, other than cod, not smoked; Scallops other than live, fesh or chilled, etc Regarding scenario 3: Under the tariff elimination on fishery exports, Vietnam will increase USD 89,796.53 thousand in export revenue to the EU market and the potential growth of export value in this scenario is 60.8% On the contrary, Norway and India suffer in the order USD 254.842 thousand and USD 250.727 thousand reduction of export revenue, equivalently to 0.04% and 0.09% growth rate China and Thailand also have the export revenue fall of 0.08% and 0.07%, respectively It can be said that tariff elemination will result in significant increase in export revenue of Vietnam There is a great opportunity for Vietnam compared with major competitors because they will suffer trade diversion while Vietnam will have the great opportunity to create a strong trade creation with the EU Tunas (yellowfin) frozen is the product gain the highest increase in export revenue by USD 72,808.27 thousands and equivalently 247.08% growth rate It is followed by Cuttle fish, squid, frozen, dried, salted or in brine; Aquatic invertebrates nes, frozen or preserved; Fish fillets and other fish meat; Albacore or longfinned tunas; Octopus, frozen, dried, salted or in brine; Scallops other than live, fresh or chilled; Dried fish, other than cod, not smoked; Skipjack or strip-bellied bonito; Crustaceans nes, frozen; Crabs, frozen; Smoked fish and fillets other than herrings or salmon, etc Regarding scenario 4: Under the assumption of fishery exports from Vietnam, Thailand, India to the EU will be duty free; the potential increase of Vietnam fishery export turnover to the EU is USD 87,100.55 thousand, equivalent to 59.97% growth 66 rate while India and Thailand increase USD 102,451.8 thousand and USD 64,092.41 thousand This implies that other FTAs conclued by the EU and other countries will not much affect negatively on Vietnam’s fishery exports to the EU Tunas (yellowfin) frozen is the product gains the highest increase in export revenue by USD 72,682.58 thousand, equivalent to 246.65% growth rate It is followed by Cuttle fish, squid, frozen, dried, salted or in brine; Aquatic inverbrates nes, frozen or preserved; Albacore or longfinned tunas, Scallops other than live, fresh or chilled; Dried fish, other than cod, not smoked; Skipjack or strip-bellied bonito; Tunas nes, frozen, whole, Smoked fish and fillets other than herrings or salmon; Cod (Gadus morhua, Gadus ogac, Gadus macrocephalus); Snails other than sea snails; Livers or roes of fish, dried, smoked, salted or in brine; Anchovies (Engraulis spp.); Mussel, frozen, dried, salted or in brine In summary, the results of SMART based on four scenarios show that the fishery exports from Vietnam to the EU will significantly increase under the tariff reduction and duty free scenarios On the basis of the analysis fishery exports from Vietnam to the EU, indicators as well as SMART simulation, we can see the opportunities and challenges of EVFTA toward Vietnam’s fishery exports  Opportunities: The involvement of the EU - one of the three major export markets in FTA with Vietnam will create opportunities for Vietnam to increase fishery exports revenue to this market if the tariff is reduced The products Vietnam will have opportunities in increasing export value are Tunas (yellowfin) frozen; Cuttle fish, squid, frozen, dried, salted or in brine; Aquatic invertebrates nes, frozen or preserved; Fish fillets and other fish meat; Albacore or longfinned tunas; Octopus, frozen, dried, salted or in brine; 67 Scallops other than live, fresh or chilled; Dried fish, other than cod, not smoked;etc Geographical location with a long coastline, a large area of exclusive economic sea zone and river systems are the favorable natural conditions provide Vietnam with outstanding strength to develop export- oriented fisheries and meet requirements of partner markets Many aquaculture areas and products for export have been created Vietnam government has implemented policies to support fishery sector such as the implementation of Decree 67/NĐ-CP about several fisheries development policies and support fishermen Besides, from 1st January 2015, animal feed will have value added tax equal to zero which can help enterprises reduce production costs (Vietnam customs, 2015) Vietnam fishery exports have high level of market diversification Vietnam exports to over 150 countries and territories and three largest markets including US, EU, Japan account for approximately 55% export turnover in 2013 Having various markets help Vietnam reduce the risk of policies from the main export markets  Challenges: If the tariff applied on Vietnam fishery exports remain unchanged after EVFTA, the export turnover will decrease sharply RCA and ES index of Vietnam fisheries tend to decrease This implies that Vietnam fisheries seem to lose comparative advantage year by year due to the increasing competition from other countries exporting fisheries to the world market as well as the EU market such as China, Thailand, India, etc Vietnam fishery exports have unstable growth and are easily affected by negative impacts from foreign markets There has been a fluctuation in export 68 turnover of Vietnam fisheries since 2009 and in the first quater of 2015, total fishery exports fell 23% compared with the first one in 2014 Vietnam only significantly increases export of commodities with low added value, preliminary processed products or raw materials For the period 2009-2013, share of HS03 in Vietnam fishery exports to EU avarage accounts for 82.69% while the share of Thailand fishery exports is only 40% In fact, competitiveness of fishery exports is in processed goods, not preliminary processed products or raw materials With the trade liberalization from EVFTA, Vietnam fishery exports would be beneficial with tariff reduction but will be subject for EU to adopt non-tariff barriers such as anti-dumping tax, countervailing duty, the inspection regulations of chemicals and antibiotics Morever, Vietnam still faces many difficulties in the product quality management with the abuse of chemicals, antibiotics in aquaculture and processing In addition, the disease situation in aquaculture continues to threaten the productivity and product quality In addition to these, along with many surcharges, sea freight cost in Vietnam remains higher 10-15% per each container 20 feet compared with other countries in region such as Thailand, Philippines (VASEP, 2014) These factors contribute to the increasing exporting cost and result in competitiveness reduction 5.2 Implications Based on analysis in the thesis, to enhance Vietnam’s fishery exports to the EU under the EVFTA, Vietnam should perform the following implications: Firstly, from the SMART simulation results, Vietnam should continue negotiating to reduce the tariff rate that the EU applies on fishery products to help Vietnam gain significantly increasing export revenue to the EU Secondly, Vietnam government should offer more policies to support and promote fishery sector such as loans support, shipbuildings for farmer and 69 fishermen; reform and decline administrative procedures, customs procedures to save the time and create favorable conditions for fishery enterprises in export activities Besides, the departments like VASEP, Directorate of fisheries should provide with updated foreign market-related information such as the new regulations, prefferences, competitors, potential products, opportunities in expanding market to the countries having great import potential as well as organize trade promotion activities abroad, etc Thirdly, to take advantage from upward trend the fishery exports to the EU, enterprises should understand carefully the clauses, regulations to enlist the tariff preferences and promote domestic production of commodities eligible for tariff incentives Particularly, they should concentrate on products bring about increasing export potential such as: Tunas (yellowfin) frozen; Cuttle fish, squid, frozen, dried, salted or in brine; Aquatic invertebrates nes, frozen or preserved; Fish fillets and other fish meat; Albacore or longfinned tunas; Octopus, frozen, dried, salted or in brine; Scallops other than live, fresh or chilled; Dried fish, other than cod, not smoked; Skipjack or strip-bellied bonito; Crustaceans nes, frozen; Crabs, frozen; Smoked fish and fillets other than herrings or salmon; Swordfish; Flatfish exept halibut, plaice or sole, frozen; Aquatic invertebrates nes, fresh or chilled, live; Snails, edible (except sea snails), Cod (Gadus morhua, Gadus ogac, Gadus macrocephalus); Livers or roes of fish, dried, smoked, salted or in brine; etc In adddtion, they should diversify products, raise the proportion 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ountry=VN ... 70 iii ABBREVIATIONS ADB Asian Development Bank AFTA ASEAN Free Trade Agreement APEC Asia-Pacific Economic Cooperation ASEAN CGE Association of South East Asian Nations Computable General Equilibrium... Revealed Comparative Advantage RTA Regional Trade Agreement Agreement on the Application of Sanitary and SPS Phytosanitary Measures TBT Technical Barriers to Trade Agreement TI UNCTAD Trade Intensity... chosen the theme: ? ?ESTIMATING THE POTENTIAL IMPACTS OF A FREE TRADE AGREEMENT BETWEEN VIETNAM AND THE EUROPEAN UNION ON VIETNAM? ??S FISHERY EXPORTS? ?? 1.2 Research objective The thesis aims to estimate