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1 INTRODUCTION Research Rationale Free Trade Agreement (FTA) eliminates tariff and non-tariff barriers in trade between members, FTA has a strong economic impact on participating members and nonmember countries However, the benefits of a free trade agreement vary from country to country, it depends on the complementarity and competition or level of trade protection among member countries In the context of globalization and international economic integration with many changes in the region and the world, Vietnam has actively participated in free trade agreements to exploit potential and advantages for economic development The Eurasian Economic Union (EAEU) is an economic union in the CIS region including the countries of the former Soviet Union (Russia, Belarus, Kazakhstan, Armenia, Kyrgystan), members of the Eurasian Economic Union are traditional partners of Vietnam, especially Russia, an important comprehensive strategic partner of Vietnam Russia is a huge market with nearly 150 million people and a GDP of more than $1.400 billion1, Russia is the largest economy and leads the economic integration processes in the region, but the fact that the Russian economy does not open and deeply integrated into the global economy as other countries, Russia becomes attractive to many global trading partners In the Eurasian Economic Union, Russia is Vietnam's main trading partner who accounted for more than 90% of trade between Vietnam and EAEU countries (Fedorov, 2018), remaining countries including Armenia, Belarus, Kazakhstan and Kyrgyzstan have less trade turnover with Vietnam On May 29, 2015 Eurasian Economic Union signed a free trade agreement with Vietnam, a country outside the union and Vietnam also became the first country in the world to join a free trade agreement with the Eurasian region This agreement has a comprehensive regulatory scope, high commitment and balance of benefits, to facilitate trade and investment promotion between Vietnam and Eurasian economic union countries, especially Russia’s strategic partner Vietnam - EAEU Free Trade Agreement is an important legal framework, which facilitates trade and promotes investment between the two countries However, studies on the impact of the agreement on trade between Vietnam and Russia in the period before and after the agreement are still not clearly and fully defined in both qualitative and quantitative aspects The question arises, it is necessary to analyze and evaluate the impact of this agreement on the trade of the two countries in the agreement in general as well as the trade between a country and economic union to promote positive effects, simultanously further promote trade exchange between Vietnam and Russia in particular, Vietnam and EAEU countries in general in the coming time is necessary Based on the research rationale, the author chooses the research topic: “Impact of the Vietnam – Eurasian Economic Union Free Trade Agreement on the trade between Vietnam and Russia” Research objective and mission 2.1 Objectives The thesis analyzes and assesses the impact of the Vietnam - EAEU free trade agreement on trade between Vietnam and Russia From there, propose solutions to promote trade between the two countries in the context of implementing the agreement in the coming time 2.2 Research missions Firstly, systematize the theoretical basis and propose a research framwork to assess the impact of free trade agreement on trade between two member countries Secondly, analyse and assess the impact of the Vietnam –EAEU free trade agreement before and after the agreement comes into effect Thirdly, determine the context, orientation and propose solutions to promote trade between Vietnam and Russia in the context of the implementation of the Vietnam – EAEU free trade agreement in the coming time Research subject and Scope 3.1 Research subject The thesis studies the impact of the Vietnam - EAEU free trade agreement on trade between Vietnam and Russia The free trade agreement is used in this study under the definition of the General Agreement on Tariffs and Trade (GATT, 1947) or as a "new generation" free trade agreement 3.2.Research scope 3.2.1 The content The thesis focuses on assessing the impact of the Vietnam - EAEU FTA on trade between the two countries Simultanouslly, the effect of non-tariff barriers such as rules of origin, sanitary and phytosanitary measures (SPS), technical barriers in trade (TBT), facilitation and customs are also considered The thesis does not consider the impact of commitments in the agreement related to trade in services, investment, government procurement, competition, intellectual property right, e-commerce and sustainable development 3.2.2 Time scope The thesis analyzes the current situation of trade between Vietnam and Russia in the period before (from 2012 to 2015) and after the agreement comes into effect (from 2016 to 2019), in which notably changes in Vietnam's trade policy with the EAEU since 2016 Simultanouslly, the thesis uses an econometric model with panel data at the industry level for the period from 2001 to 2019 (2001 marked the establishment of a strategic partnership between Vietnam and Russia) 3.2.3 Geography and Location: Trade in goods between Vietnam and EAEU countries, which focuses on trade between Vietnam and Russia https://countryeconomy.com/countries/groups/eurasian-economic-union 4 Research Methodology The thesis uses qualitative and quantitative approaches to assess the impact of the free trade agreement on trade between two countries 4.1 Qualitative approach The qualitative method used includes interviews with a number of enterprise and independent experts to assess the impact of the agreement on the performance of enterprises and the economy, and to explore the factors that affect trade between the two countries when the agreement comes into force In addition, the research also uses trade indicators to analyze industry groups with comparative advantages in the period before and after the agreement On that basis, synthesize and compare research results to assess the impact of the agreement on trade between Vietnam and Russia 4.2 Quantitative approach Quantitative methods used to estimate and test the factors that affect trade, include exports and imports between Vietnam and Russia, Vietnam and the countries in the agreement In quantitative research, the thesis tests the impact of the Vietnam - EAEU FTA on export and import to use a structural gravity model based on the theories of Tinbergen (1962), Feenstra (2002); Anderson & Van Wincoop (2003); Deardoff (2004) and Head and Mayer (2014) Based on the above approach, the research uses the two-step Heckman test which tests the impact of the agreement on export and import between Vietnam and Russia, Vietnam and the countries in the agreement New contributations of the thesis 1) For the theoretical basis: The thesis has shown the impacts of free trade agreements on trade under static (short-term) and dynamic (long-term) impacts, simultanously clarify the factors to affect trade between the two countries, thereby proposing a framework and research model to comprehensively assess the impact of the Vietnam - EAEU free trade agreement on trade between Vietnam and Russia before and after the agreement In particular, in the quantitative research model, the author has tested the two-stage Heckman estimator to solve the problem of endogeneity and trade with "0" or zero trade, thereby overcoming the limitations of the other models in previous studies The model's estimation result have measured the impact of the trade agreement and tariff reduction according to the time on direct trade benefits (change in trade turnover) and expansion benefits (ability to expand the market) between Vietnam and the member countries of the agreement and Vietnam and Russia Simultanously, from the result of calculating trade indicators such as revealed comparative advantage (RCA), regional orientation (RO) and trade intensity index (TII), the research has also shown competitive advantage industry groups and benefit of Vietnam and Russia 2) For practical: From the research results include (1) Non-tariff barriers, tariff quotas as well as barriers to market access are obstacles to promote trade growth between Vietnam and Russia; (2) Trade between Vietnam and Russia is complementary, export products have not competed directly; (3) The trade agreement has had a positive impact on trade between Vietnam and Russia The thesis has proposed solutions to promote trade between the two countries such as (1) continuing to advertise the benefits of the agreement to enterprise communities of the two countries; (2) further accelerating the process of reducing non-tariff barriers on goods in which the two sides have competitive advantages, match to comprehensive strategic cooperation relationship between Vietnam and Russia; (3) promote production and export of comparative advantage products and complement each other to take advantage of incentives from the agreement; (4) facilitate trade, improve infrastructure and cut logistics costs, specify regulations related to payment currencies, connect and expand the market through the enterprise communities of the two sides Simultanously, promote trade through foreign investment activities and improve the business investment environment for enterprises as well as enhance the competitiveness of Vietnamese goods in the Russian and EAEU market 3) For research method: The thesis has combined qualitative and quantitative analysis methods in studying the impact of a free trade agreement on trade between two countries to overcome the limitations of each methods compared to previous studies in a comprehensive assessment of the impact of the agreement on trade between the two countries before and after the agreement The qualitative method is performed to show the impact of non-quantitative factors included in the model Meanwhile, the quantitative method indicates the impact of the agreement and other factors on the increase in trade between Vietnam and Russia The structure of the thesis Chapter 1: Literature Review Chapter 2: Theoretical basis of international trade and impact of free trade agreement Chapter 3: Analytical Framework and Research Methodology Chapter 4: Situation of the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia Chapter 5: Orietations and Solutions to promote the trade between Vietnam and Russia in the context of implementing the Vietnam – Eurasian Economic Union (EAEU) free trade agreement CHAPTER LITERATURE REVIEW 1.1 Theoretical studies on trade liberalization In fact, Free trade exists in popular forms such as (1) a free trade agreement on a global scale, represented by the World Trade Organization (WTO) and (2) a free trade agreement between two countries or a group of countries Countries participate in free trade agreements to promote trade liberalization and international economic integration Viner (1950) pointed out the relationship of trade liberalization to economic growth and trade facilitation based on the following two factors: (1) trade creation and (2) trade diversion These impacts lead to a more efficient allocation of productive resources in the economy, contributing to the formation of a new economic structure based on the commitments which were signed between members Consequently, most research points out positive effects of trade liberalization as follows: - Static gains from international trade refer to an improvement in output or social welfare with a fixed amount of inputs or supplies - The benefits of trade liberalization mainly result from improved productivity, increased foreign exchange reserves, and national welfare - Trade liberalization will provide the opportunity to exchange at international rather than domestic prices This opportunity benefits from exchange, as domestic consumers can buy imported goods cheaper and producers can export goods at higher foreign prices - Moreover, there is another benefit that are specialization Free trade encourages industries to reallocate production from goods that is producing at a relatively high cost (comparative disadvantage) in a closed economy to goods that are producing at a relatively low cost (comparative advantage) By taking advantage of its comparative advantage in international trade, a country can increase its total output and social welfare 1.2 Theoretical studies on the impact of free trade agreement 1.2.1 Impact of the free trade agreement on trade and factors affecting trade between two countries Impact of the FTA on member countries and on the rest of the world (Bhagwati Krueger, 1995) through trade creation and trade diversion which mentioned by Viner (1950) in the partial equilibrium approach of international trade, these effects support the efficient distribution of interdisciplinary productive forces in the economy that contribute to the formation of a new economic structure based on the commitments to reduce tariff barriers in the FTA The reduction of trade barriers provides opportunities for developing countries to promote economic growth, shift economic structure towards improving efficiency based on promoting advantageous industries (Krueger, 1997) Some industries have opportunities to develop by promoting their comparative advantage, while some other industries (especially previous protected industries) are forced to reduce production or under the pressure of competition that may go bankrupt The complementarity in trade between FTA member countries is also one of the important factors to determine the impact of FTA The more complementaries’s trade structure between countries, the more FTA is likely to promote trade creation between the parties (Maliszewska et al., 2008) Conversely, two countries with a similar trade structure will have difficulties in promoting trade unless the two countries already have a proportion of intra-industry trade as shown by the rate of intra-industry trade which is shown by analyzing the structure of trade according goods through the trade complementarity index or the export similarity index - Factors affect supply and demand of exporting and importing countries: Carrere (2006), Sandberg (2004), Nguyen Tien Dung (2011), Arapova and Isachenko (2019) supposed that the factors positively affect the import and export of some members in the regional and bilateral trade which is GDP and population size, the larger economy, the larger the volume of goods traded Similarly, per capita income is also proportional to trade - Factors affect the attractiveness or impediment of trade between countries: Bhattacharya et al (2007), Krugman et al (2012) supposed that the hinder factors have an impact on countries trade which are geographical distance, socio-economic distance (per capita income), tariffs, exchange rate and trade policies, bilateral or multilateral trade agreement Thus, the free trade agreement not only affects directly, but also indirectly, through the relevant import and export policy of the countries 1.2.2 Impact of the free trade agreement on industries in the economy There are many studies to determine the factors and mechanism of impact of the free trade agreement (FTA) One of the effects of trade liberalization is to promote economic restructural and allocate resources of each member country in the implementation of FTAs (Berg&Krueger, 2003) Industries always have uneven growth in the economy under the impact of FTAs, leading to shifts and changing economic structure of industries Countries seek to promote the competitiveness and growth of comparative advantage industries and narrow the disadvantaged industries based on allocating and shifting resources to comparative advantage industries which can be effective (Bhagwatin and Srinivasan, 2002) FTAs required the removal of trade barriers which will directly affect the industries prices and imported goods for consumption as well as the prices of raw materials and equipment for production inputs Manufacturing enterprises will change their production strategies, import-export activities and investment to maximize profits, the change of enterprises in the industry that will affect the industry through economic linkages The economy will take place through a process of reallocating resources, shifting to development advantage industries in the medium and long term If taking advantage of the effective implementation of FTAs, it will promote the formation of backward and forward linkages in the economy, create a new economic structure based on competitive advantage industries 1.2.3 Empirical studies related to the method of assessing the impact of free trade agreement - The first group of methods: Based on an ex-ante impact assessment approach which is based on the Computable General Equilibrium (CGE) model However, the research does not use CGE model to analyze the impact of Vietnam - EAEU FTA on trade between Vietnam and Russia which has some limitations as follows: the I/O data table of Vietnam and the Eurasian Economic Union countries that collect very limited; (2) Data collected by the level of industry detail to limit because the structure of the economy according to aggregate industry groups which are different from country to country; (3) The research only evaluates the impact of this FTA on trade between Vietnam and Russia but does not consider the overall linkages in the economy and simulate the impact on other activities such as investment and transfer factors of production according to each industry - The second group of methods: Based on the ex-post impact assessment approach to use the gravity model The gravity model is widely used and increasingly popular in the empirical research of international trade CHAPTER THEORETICAL BASIS OF INTERNATIONAL TRADE AND IMPACT OF FREE TRADE AGREEMENT 2.1 International Trade and Free Trade Agreement 2.1.1 International Trade International trade is an important engine for the growth of countries at different development stages, it not only contributes to an efficient allocation of resources but also promote growth International trade plays an important role, it stems from the fact that no country can produce all the goods and services that every country requires for their consumption largely due to differences in comparative advantage and limited resource International trade also specifies a relationship that shows economies need to export goods and services which have a comparative advantage, simultaneously import products that cannot be produced domestically or can be produced at a high cost It shows that international trade affects the development of the world economy and affect the economic growth of countries Theories have explained international trade as trading advantageous goods between countries, thereby reallocating factors of production, reducing production costs, increase output, and promote economic growth 2.1.2 Free Trade Agreement 2.1.2.1 Definition A free trade agreement is understood as an agreement between two or more countries (or territories) for trade liberalization in one or several groups of goods by reducing tariffs, creating regulations to facilitate the exchange of goods and services and the movement of capital between member countries 2.1.2.2 Form of Free Trade Agreement - Bilateral FTA: An agreement signed by only two countries or territories The scope and content of the FTA are bound and implemented by two countries The bilateral FTA between the United States and Chile, the bilateral FTA between Peru and Singapore or the FTA between Vietnam and Japan can be used as examples of this type of FTA - Multilateral FTA: An agreement signed by three or more territories Countries or territories usually are geographically close to each other - Mixed FTA: There is a form of combination between a bilateral FTA with multilateral FTA FTA is similar to a bilateral FTA in that the number of parties to the agreement is only two: on the one hand is a free trade area with one or partner countries on the other This FTA is signed between an economic association with a country, several countries or some other international economic association - New generation FTA: There is a scope of a comprehensive agreement, go beyond the framework of trade liberalization in goods such as investment, competition, public procurement, e-commerce, encourage the development of small and medium enterprises, provide technical assistance to developing countries as well as give reasonable transition From the literature review on methods of assessing the impact of FTA on trade that use many different methods and give results to effect FTAs, there are more benefits than risks 1.3 Studies on Eurasian Economic Union and Vietnam – EAEU free trade agreement The Eurasian Economic Union was formed in 2015, which is an economic link of the CIS region including Russia, Belarus, Kazakhstan, Armenia, Kyrgystan who built on the foundation of the customs union (CU) include the Russian Federation, Belarus, Kazakhstan There is a market with 180 million people and a strong economy of $5 trillion (Saud Kalim, 2020) However, the fact that it has not been deeply integrated into the global economy like other regions makes the EAEU be attractive to many trading partners on the global and especially in the Asia-Pacific region Vietnam is considered an important partner in Asia Pacific of the EAEU, promote relation with Vietnam that will create favorable conditions for the Eurasian Economic Union to penetrate the ASEAN market In 2015, the Eurasian Economic Union ratified its first free trade agreement with a country outside the union, that is Vietnam When the Vietnam - EAEU FTA comes into effect, the average tariff rate for EAEU goods will be reduced from 10% to 1% Vietnam has reduced or eliminated import tariff on the EAEU on 91% of its goods In return, Eurasian Economic Union will immediately eliminate import tariffs on 88% of goods or with a transition period of to 10 years 1.4 Studies related to trade between Vietnam and Russia Vietnam and Russia have a special relationship, even more strategic2, this relationship is the inheritance and promotion of the tradition of the former Vietnam-Soviet relationship The economic and trade relationship was signed in 1955 between Vietnam and the Soviet Union, which is an important premise to cooperate between the two sides in the future After the dissolution of the Soviet Union in 1991, the relationship between Vietnam and the Soviet Union was replaced by the relationship between Vietnam and Russia later, on the basis of which Vietnam and Russia signed and issue a joint statement on the strategic partner relationship in 2001, that marks a new stage in the economic and political cooperation between the two countries To promote bilateral economic cooperation as well as consider Vietnam as Russia's partner in the process of international economic integration into the Asia-Pacific region, the two countries have upgraded to a strategic comprehensive partnership in 2012 and participated in the Vietnam - EAEU free trade agreement in 2015 https://trueinform.ru/modules.php?name=News&sid=21688 dated 12 Nov 2013 (Accessed on 15 Sept 2019) 10 time so that the followed countries can adjust their policies according to the roadmap suitable to their development level 2.1.2.3 Contents of the free trade agreement Free trade agreements usually include major issues related to trade in goods, trade in services, investment, rules of origin and other issues such as intellectual property, competition, legal and regulatory, institutions etc For free trade agreements in general, trade in goods is the main content that participants are often interested in, cut tariffs and facilitate trade in goods that is the foundation of FTAs Promote trade liberalization to be the main goal to support parties to expand markets and facilitate the movement of goods 2.2 The impact of free trade agreement on trade between countries 2.2.1 Static effects of free trade agreement Trade agreement removes tariff barriers for member countries but maintain tariff barriers for non-member countries, simultanously it requires member countries to implement an open door policy for foreign direct investment (FDI), to facilitate trade and economic cooperation Trade agreements affect “trade creation” and “trade diversion” The impacts lead to an interdisciplinary distribution of productive forces in the economy, contributing to the formation of a new economic structure based on commitments between countries 2.2.2 Dynamic effects of free trade agreement Dynamic effects are effects of an FTA on the economy in the long-run, as the economy responds to policy changes related to the implementation of the FTA This impact is mainly from the aspect of integration with the world economy through trade agreements from the removal of trade barriers to facilitate the flow of goods across borders The effects of the agreement include: - Drive productivity through economies of scale - Attract foreign investment - Enhance competitiveness, production specialization and efficiency - FTAs promote trade and investment liberalization, simultanously enhance regional and multilateral international integration in the context of globalization 2.3 Factors that affect the impact of free trade on bilateral trade - Similarities, economic and diplomatic relations between countries - Trade relations, comparative advantage and complementarity in trade - Trade liberalization policy - Trade-related policies and regulations of countries - Elasticities of supply and demand and prices in international trade CHƯƠNG RESEARCH FRAMEWORK AND METHODOLOGY 3.1 Research Framework In this research, trade is represented between two countries through export and import turnover, so the theoretical basis for building an analytical framework is based on literature review of trade liberalization and international trade theories The framework analysis assess the impact of the Vietnam - EAEU free trade agreement on trade between Vietnam and Russia as follows: World & Russia: Political, Economic, Science Technonogy and Russia’s foreign policy Tariffs and Non - tariffs Exchange rate Geogra phical distance Barriers/Attractive factors Vietnam – EAEU FTA - Agreement’s time was signed VIETNAM (Exporter) Russia/EAEU countries (Importer) Trade barriers: TBT, SPS,… Differences between countries Size of economy Per capita income Population size Economic, political and diplomatic relations between Vietnam and Russia Directly impact Indirectly impact Source: Author’s summary 3.2 Analyze the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia by the gravity model To assess the impact of Vietnam - EAEU FTA on trade between Vietnam and Russia Trade between two countries through import and export turnover The thesis chooses a structural gravity model to analyze the impact of FTA and economic factors on 11 12 import and export between Vietnam and Russia as studied by Bergstrand (1989), Anderson and Wincoop (2003), Head and Mayer (2014) In the gravity model, the FTA_EAEU and tariff variable are the research main, variables represent the impact of the agreement on trade between two countries To evaluate the factors that affect export and import between Vietnam and countries in the agreement, the equation is written as follows: - Hypothesis 4: Tariffs are positively correlated with Vietnam's imports to Russia and vice versa The data sample of the research only includes import and export turnover between Vietnam and its trading partners, which are countries in the EAEU, the research used the fixed effect estimation method (FEM) Moreover, Hausman test is also performed to check if the random effect model (REM) is more effective than the fixed effect estimation model (FEM), the research will also estimate model with robust to get better estimation results 3.3 Analyze the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia by trade indicators - Revealed Comparative Advantage (RCA) - Regional Orientation (RO) - Trade Intensity Index (TII) include export intensity index (XII) and ixport intensity index (MII) 3.4 Methods of data collection Trade data collected for 19 years (from 2001 to 2019) which is used for quantitative model estimation, in which are countries related to industries import and export and countries that are not related, so the number of observation obtained is 5,386 observations that form an unbalanced repeat pattern The total number of observations included is 5,386 in the quantitative model Data collected from international databases Specifically, import and export data is collected from UN Comtrade statistical data by sector, data on GDP, per capita income (INCGAP), population are collected from the World Development Indicators database, distances between countries are collected from CEPII, real exchange rates are obtained from Bruegel data Tariff data from the World Integrated Trade Solutions (WITS) database, FTAs are centered on WTO, Vietnam Chamber of Commerce and Industry ܺܧ ݊ܮ௧ = ߚ + ߚଵ ݈݊(ܲܦܩே௧ ∗ ܲܦܩ௧ ) + ߚଶ ݈݊(ܱܲܲே௧ ∗ ܱܲܲ௧ ) + ߚଷ ݈݊ ܲܣܩܥܰܫே௧ + ߚସ ݈݊ ܶܵܫܦே௧ + ߚହ ܷܧܣܧ_ܣܶܨ + ߚ ܴܣܶ݊ܮ௧ + ߚ ܴܧܧܴ݊ܮே௧ + ߝ௧ (5) ܺܫ ݊ܮ௧ = ߚ + ߚଵ ݈݊(ܲܦܩே௧ ∗ ܲܦܩ௧ ) + ߚଶ ݈݊(ܱܲܲே௧ ∗ ܱܲܲ௧ ) + ߚଷ ݈݊ ܲܣܩܥܰܫே௧ + ߚସ ݈݊ ܶܵܫܦே + ߚହ ܷܧܣܧ_ܣܶܨ + ߚ ܴܣܶ݊ܮ௧ + ߚ ܴܧܧܴ݊ܮே௧ + ߝ௧ (6) Where: i is for industry i, j is index for country j, t is for time ܺܧ୧୨୲ is export value of industry i from Vietnam to country j in year t; IX ୧୨୲ is Vietnam import value of the industry from country j in year t; GDP୲ , GDP୨୲ are Gross Domestic Product of Vietnam, country j in year t; POP୲ , POP୨୲ are a population of Vietnam and country j in year t; ln INCGAP୨୲ is the difference in per capita income between Vietnam and its trading partners j; lnDIST୨ is the distance between Hanoi’s capital of Vietnam to capital’s country j; REER ୨୲ is he real exchange rate between Vietnam and country j at time t; TAR ୧୨୲ is the tax rate of Vietnam applied to import/export goods from country j for goods i at time t; ܷܧܣܧ_ܣܶܨ୧୨ as a dummy variable, it measures the impact of FTA on export and import, it takes the value if Vietnam and the EAEU have signed the agreement and comes into force, the value otherwise To assess the impact of Vietnam - EAEU FTA on trade between Vietnam and Russia, the thesis uses the above model but removes the distance variable from the model, because the relationship between the two countries is considered only, the distance between the two countries does not change between observations overtime in the quantitative model estimation, so the estimation equation: ܺܧ ݊ܮ௧ = ߚ + ߚଵ ݈݊(ܲܦܩே௧ ∗ ܲܦܩ௧ ) + ߚଶ ݈݊(ܱܲܲே௧ ∗ ܱܲܲ௧ ) + ߚଷ ݈݊ ܲܣܩܥܰܫே௧ + ߚସ ܷܧܣܧ_ܣܶܨ + ߚହ ܴܣܶ݊ܮ௧ + ߚ ܴܧܧܴ݊ܮே௧ + ߝ௧ (7) ܺܫ ݊ܮ௧ = ߚ + ߚଵ ݈݊(ܲܦܩே௧ ∗ ܲܦܩ௧ ) + ߚଶ ݈݊(ܱܲܲே௧ ∗ ܱܲܲ௧ ) + ߚଷ ݈݊ ܲܣܩܥܰܫே௧ + ߚସ ܷܧܣܧ_ܣܶܨ + ߚହ ܴܣܶ݊ܮ௧ + ߚ ܴܧܧܴ݊ܮே௧ + ߝ௧ (8) Empirical equations (7) and (8) aim to test the correlation of two main representative variables to affect trade between two countries, it’s FTA_EAEU and TAR with the following basic assumptions: - Hypothesis 1: The impact of the Vietnam - EAEU trade agreement on increasing Vietnam's export turnover to Russia - Hypothesis 2: The impact of the Vietnam - EAEU trade agreement on increasing Vietnam's import turnover to Russia - Hypothesis 3: Tariffs are positively correlated with Vietnam's exports to Russia and vice versa CHAPTER SITUATION OF THE IMPACT OF VIETNAM – EAEU FREE TRADE AGREEMENT ON TRADE BETWEEN VIETNAM AND RUSSIA 4.1 Vietnam – Eurasian Economic Union free trade agreement - The main content of the agreement related to trade in goods + Commit on tariffs: When Vietnam - EAEU FTA comes into effect with 4,959 import tariff lines, account for 52.4% of the total number of tariff lines which will be removed immediately in the 2016 – 2017 period, within the next 10 years from 2018 the number of import tax lines will be lifted to 90% + Commit on non – tariff: Establish a mechanism for close cooperation to ensure non-tariff measures such as technical barriers to trade (TBT), food safety, sanitary and phytosanitary (SPS) measures 13 14 + Rule of Origin: To take preferential tariffs of the FTA, the rule of origin substitution under this FTA include the value-added content criteria, the rule of change in code conversion, and the process standards are also detailed in the agreement that explains in detail for goods eligible for preferential tariff treatment, set a common standard for the process by which authorities determine compliance with rules of origin + Trade and custom facilitation: Help parties to the FTA promote (1) transparency of customs processes and procedures; (2) trade facilitation and harmonization of custom activities; (3) custom cooperation include information exchange between customs authorities (article 5, chapter 5) The Vietnam - EAEU FTA has committed to implementing mechanisms related to custom procedures and cooperation, risk management, information exchange, transparency, custom value and tariffs 4.2 The trade between Vietnam and Russia 4.1.1 Factors affect trade between Vietnam and Russia - Russia’s economic and foreign policy - Political and diplomatic relations between Russia and Vietnam - Vietnam’s foreign and trade policies with Russia - Vietnam and Russia’s international economic integration policies 4.1.2 Situation of trade between Vietnam and Russia - Trade value: Total trade value between Vietnam and Russia in the period before the agreement from 2012 to 2015 reached US$9,95 billion After the agreement was signed, trade between Vietnam and Russia grew very well, the total trade value reached US$15,39 billion, an increase of 54.6% respectively compared to before the agreement Trade between Vietnam and Russia accounts for a large proportion of 92,5% of the trade balance between Vietnam and Eurasian Economic Union In the trade exchange between the two countries during this period, Vietnam exports to Russia key products such as electronics, footwear, coffee and tea, seafood, textiles, etc Products of industries are labor intensive Meanwhile, Vietnam imports products in which Russia has strengths such as crude oil, iron and steel, fertilizer, grain, mechanical equipment, aircraft and spare parts, etc - Trade structure between Vietnam and Russia + Goods export by industry group: Export of Vietnam’s goods to Russia after the agreement compared to before the agreement to improve significantly in terms of quality and technology in products which continuously increased, thereby increasing the value of Vietnam's export to Russia However, Vietnam's machinery, equipment and electronic products are currently mainly manufactured and assembled from foreign investment enterprises, so Vietnam’s value-added content is still low in products Vietnam's key industry groups such as wood, plastic, and rubber products are mainly resource – intensive and in a raw material form or semi-processed agricultural products have a share of exports to Russia very low and the growth rate was almost unchanged in both the period before and after the agreement + Goods import by industry group: The structure of Vietnam's imports from Russia increased sharply, all of which were input materials for production activities such as minerals and petroleum, metal products, chemicals and plastic products, rubber and fertilizers These products meet the input needs of the industrialization process and domestic production In addition, imported products cannot be produced domestically or meet the market's consumption demand with high-quality goods for domestic consumption such as processed foods including sugar, vegetable oil and sugar, flour, animal products such as seafood, These are consumer goods products that are in high demand in the country, and also include products with high technological content and high added value such as optical and medical equipment that not compete directly with domestic goods but also meet the needs of Vietnam's consumption - Trade between Vietnam and Russia in EAEU + Export and Import market share between Vietnam and Russia Vietnam's share of total import and export value to the EAEU market grew by an average of 11% from 2012 to 2019, of which export increased by 8.08% and 7.5% for imports In the trade value between Vietnam and EAEU in the period 2012 - 2019, Russia accounted for the largest proportion of Vietnam's exports and imports, accounting for the average proportion of 91.29% and 88.59%, respectively For export value: Since Vietnam and Russia established a comprehensive strategic partnership in 2012, Vietnam's exports to Russia in 2019 increased by 39.4% compared to 2012 Especially, when Vietnam and EAEU signed a free trade agreement in 2015, Vietnam's export value to EAEU increased by an average of 13.7% in the period from 2016 to 2019 After the Vietnam - EAEU FTA took effect, Vietnam's exports still accounted for an average of 91.6% to Russia, while Vietnam's exports to Kazakhstan only accounted for 8.17%, Belarus accounted for 23%, Armenia and Kyrgyzstan are 0% For import value: Vietnam still imports mainly from Russia which increase from US$829,37 million in 2012 to US$1,84 billion in 2019 with an average growth rate of 9,5% in the period 2012 – 2019 After the agreement was signed, Vietnam's imports increased sharply to 17.9% compared to 1,1% from Russia in the period before the agreement Russia is Vietnam's main import market with an average rate of 91,78%, Belarus accounted for 5,38%, Kazakhstan accounted for 2,84% and Armenia and Kyrgyzstan accounted for 0% + Trade growth rate between Vietnam and Russia After the trade agreement was signed and took effect, Vietnam trade growth rate and EAEU increased an average of over 19%, in which trade between Vietnam and Russia has an average growth rate of 16% that compared to average Vietnam's trade growth rate to the rest of the world of 10.7% Russia is Vietnam's 24th largest export market and Vietnam's 15th largest importer (Nguyen An Ha and Nguyen Thanh Lan, 2019) However, 15 16 Vietnam's export value to EAEU market in general and Russia in particular accounts for a very low proportion, but the growth rate of trade between Vietnam and Russia is higher than the growth rate of trade of Vietnam to the rest of the world 4.2 Analyze the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia 4.2.1 Qualitative Analysis - Non – tariff barriers - Rule of Origin in a trade agreement - Trade and customs facilitation 4.2.2 Analyze the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia by trade indicators - Vietnam and Russia’s RCA From Vietnam and Russia’s RCA index in industries, it can be seen that (1) Vietnam has opportunities to boost exports to the Russian market for industries in which Vietnam has a high comparative advantage while Russia does not have a comparative advantage such as footwear, textiles, and agricultural products such as tea and coffee, cocoa and pepper, electrical equipment and components In addition, mechanical machinery and electrical, electronic equipment are a potential industry group to increase exports because RCA has tended to increase rapidly in recent years Vietnam has begun to have advantages in these items (2) industries are likely to compete from Russia that includes wood products and cereal products; (3) Vietnam products have opportunities to export but it may face competitive pressure such as industries related to machinery, mechanical and electronic equipment; (4) Vietnam and Russia’s industry group can complement each other as Vietnam promotes comparative advantage product groups including textiles, footwear, electronic goods Meanwhile, Russia can export product groups to Vietnam that are inputs for the production process such as crude oil and minerals, base metals, and means of transport - Regional Orientation Index Industries such as live animals and animal products, plant products, footwear and hats and electronic goods, machinery and mechanical equipment These are industries that Vietnam has comparative advantages in production and export, accounting for an average share of 80,1% of total the export value of Vietnam to EAEU after the agreement is signed Therefore, Vietnam needs to promote the export of products belonging to the group of competitive advantage industries to the EAEU market in general and Russia in particular in the coming time - Trade Intensity Index (TII) The trade intensity index (MII and XII) shows that the impact of the Vietnam EAEU FTA is still very small on trade between Vietnam and Russia, not matching with the potential of strategic partnership cooperation Although Vietnam's export grow faster than Vietnam's imports from Russia, this shows that the agreement has an impact on trade diversion The impact of an agreement by industry shows that a number of products which Vietnam has an advantage in exporting to Russia include electronic products, processed foods, etc and simultaneously Vietnam also imports products from Russia include fresh animals, plant products, vehicles and transport equipment 4.2.3 Analyze the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia by the gravity model - For the impact of the agreement on Vietnam’s export to Russia + Trade agreement has a positive impact on Vietnam's exports to Russia, Vietnam's export value to Russia increased by 0,136% compared to before the agreement + Tariff reduction increases Vietnam's export value to Russia, equivalent to 0,009% - For the impact of the agreement on Vietnam’s import from Russia + Trade agreement has a positive impact on Vietnam's imports from Russia, Vietnam's import value from Russia increased by 0,019% compared to before the agreement + Tariff reduction increases Vietnam's import value from Russia, equivalent to 0,014% 4.3 Evaluate the impact of Vietnam – EAEU free trade agreement on trade between Vietnam and Russia 4.5.1 The positive effects Trade agreement increase import and export value and facilitates trade between Vietnam and Russia: The average growth rate of the period after the agreement comes into force is higher than that of the period before the signing, the growth of imports is higher than exports respectively 17.9% compared to 14% The trade balance is always in favor of Vietnam, specifically, the value of Vietnam's exports to Russia is higher than the value of Vietnam's imports from Russia after the agreement comes into effect Promote import and export of competitive advantage goods between the two countries: Vietnam’s products such as shoes and hats; textiles, leather products; agricultural products (include tea, pepper, coffee, ), components and electronic equipment with competitive advantages While, Russia’s products have advantages such as minerals, oil; wooden product; base metals, it is an input for the production process of Vietnam Vietnam and Russia’s trade structure is highly complementary When there is an agreement, it will have a "trade creation" effect that will increase trade between the two countries The trade agreement has established clear regulations on the rule of origin, requirements on technical trade barriers, and sanitary and phytosanitary (SPS) measures, phytosanitary to control the quality of goods for the member countries in the agreement: This is the legal basis when there is a dispute in the process of commercial exchange Regulations also help Vietnam and Russia to select priority goods with 17 18 competitive advantages to promote import and export to each other's markets with appropriate quality and technical standards in comprehensive strategic partner cooperation Vietnam - EAEU Free Trade Agreement is matched to Russia's foreign policy and Vietnam's international economic integration in the near future: The agreement is also consistent with Russia's economic cooperation and integration strategy in particular, countries in the Eurasian economic union in general for the Asia-Pacific region, of which Vietnam is considered an important partner in both economic and political aspects In addition, the trade agreement also has a spillover effect in attracting foreign investment flows of investment members to each other to establish production and supply chain bases, reduce trade transaction costs in these markets 4.5.2 Negative effects and Challenges when implementing the agreement - Russia still has a lot of interventions in important sectors of the economy which affect the transparency of the market, as well as diversification of export and import of goods is very low For Vietnam, continue to implement international economic integration policies, renew the growth model based on the export strategy In addition, Vietnam's export goods are still in the low value-added chain, export products are mainly based on raw materials such as agricultural and aquatic products - Challenges from disruption risks related to the global supply chain is present and more complicated in the post-Covid19 Disruptions in the supply chain can lead to connection to export markets that are no longer as stable or seamless as before Industries in which Vietnam has the advantage to increase exports to Russia and EAEU countries that will suffer the greatest impact due to disruptions in supply chains during the Covid-19 pandemic - Trade barriers related to sanitary and phytosanitary (SPS), technical barriers to trade (TBT) and other regulations required by Russia and EAEU countries are complex and tight - Along with the roadmap to remove tariff barriers, goods want to be exported to each other's markets which must comply with the regulations of agreement on the origin of goods To determine a valid certificate of origin, the agreement also stipulates competent authorities of the two sides to notify the seal sample of the unit issuing the certificate of origin under the agreement (C/O EAV), a requirement not only creates more convenience for businesses in the process of customs clearance of goods, but it also creates administrative procedures that make it difficult for both parties - For some export products with the advantage of Vietnam, are subject to export quotas and apply the trigger mechanism, which shows preferential benefits are partially limited from the agreement, simultaneously the mechanism for allocation and monitoring of quotas also creates administrative procedures, cause difficulties for state management agencies and enterprises, reduce output as well as export value to the Russian market - Besides, in the process of negotiating, signing contracts and making payments between the two countries, there are still many difficulties due to the ruble and Vietnamese dong conversion system In addition, payment methods in strong foreign currencies such as the US dollar (USD) between Russia and Vietnam through a third country's bank when exports to Russia are also difficulties in the context that Russia is under the pressure of financial sanctions and restrictions on Russia's trade with other countries such as the US and Europe during Ukraine crisis in 2014 - Russia's customs declaration procedures are also said to be complicated with many administrative procedures involved - Geographical distance is not convenient for trade exchange between the two parties, leads to an increase in logistics costs and affects the quality of goods during transportation - Vietnam enterprises still access market very limited because Vietnam enterprises have not attended to the Russian market, trade promotion, find markets, build distribution channels, advertising as well as product introduction and brand building have not been focused 4.5.2 Causes of restrictions - An environment of international economic relations is not favorable for import and export activities in recent times, especially the disruption in the global supply chain affected by the Covid19 pandemic, the trade war between the US and China, Political relations of major countries such as the US - Russia, Russia - Europe that has affected global trade and trade between Vietnam – Russia - Inadequate concern and awareness about the importance of the Russian market and Eurasian economic union countries among Vietnamese managers and business community - Policy environment is still lacking in synchronization and system - Capacities of state officials and enforce the agreement's implementation is still limited at all levels - The role of industry associations in supporting market research, promotion and connection between businesses of the two countries is still very limited CHAPTER ORIENTATIONS AND SOLUTIONS TO PROMOTE THE TRADE BETWEEN VIETNAM AND RUSSIA IN THE CONTEXT OF IMPLEMENTING VIETNAM – EURASIA ECONOMIC UNION (EAEU) FREE TRADE AGREEMENT 5.1.Prospect and Development Orientation of Vietnam and Russia’s trade 5.1.1 Trade prospect of Vietnam and Russia In the period of 2020 - 2025, most tariff lines will be cut to 0%, and Vietnamese advantage products such as electronics, textiles, agricultural products, aquatic products 19 20 and livestock products which will continue to export to Russia, import and export value will continue to be promoted between two countries For trade prospect by industry group: Vietnam - EAEU Free Trade Agreement will promote trade between Vietnam and Russia’s industry groups due to differences in comparative advantages, import and export structure, development level, production resources (labor, technology, capital etc) and highly complementary import and export goods Vietnam will continue to depend on key export products and maintain the lack of diversity in the structure of exports to Russia in the coming period 5.1.2 Development orientation of the trade between Vietnam and Russia Vietnam and Russia need to continue to take advantage of the economic-trade cooperation mechanism within the framework of the Vietnam - EAEU FTA to expand the market for each side as well as promote trade to achieve the goal of bringing the total value of the two countries to US$10 billion3 as committed by the leaders of the two countries in the coming time and the development orientation of trade between Vietnam and Russia from now to 2026, the annual growth rate is expected to reach 1012% Along with tariff reduction schedule according to commitments of the Vietnam EAEU FTA, it will take place more strongly which support Vietnam and Russia to specialize in production and export more effectively, simultaneously expand into a potential market of two sides Promote trade exchange between the two sides that complement and replace products and materials with competitive advantages that provide inputs for production activities and consumers 5.2 Solutions to promote trade between Vietnam and Russia in the context of implementing Vietnam – EAEU free trade agreement 5.2.1 Solutions to take advantage of positive effects to promote trade between Vietnam and Russia - Vietnam and Russia continue to review and amend policies and regulations, simultaneously the two countries need to adopt measures to promote bilateral trade in the agreement framework by cutting unnecessary administrative procedures, simplifying the process of requesting documents that are presented - Vietnam and Russia need solutions to increase the rate of taking incentives in the agreement, two sides popularize for businesses to take advantage of incentives in the agreement to increase two-way trade value in the period 2021-2026 - Two sides also enhanced consultation and cooperation in periodically assessing the impact of the Vietnam – EAEU free trade agreement to identify difficulties, obstacles and facilitate the implementation process - Vietnam and the member of Eurasian Economic Union countries, of which Russia is a key member, that needs to further accelerate to reduce the administration of tariff and non-tariff barriers (customs tariff quotas and non-tariff measures, trigger) for products in which two sides have a competitive advantage, in line with comprehensive strategic cooperation relationship between Vietnam and Russia to reduce costs and increase the competitiveness of goods in each other's market - Vietnam and Russia need to promote production and export of products with comparative advantage to take incentives from the agreement which not affect competition and complement each other to increase “trade creation” 5.2.2 Solutions to limit the negative impact of the agreement to facilitate trade between Vietnam and Russia - Trade facilitation: Continue to improve institutions and legal systems which to meet commitments in the agreement, develop reasonable non-tariff policies in line with commitments in the agreement Vietnam and Russia also need to connect and exchange information related to trade facilitation in order to remove barriers and difficulties for businesses of the two sides when carrying out import and export activities into each other's market Vietnam should proactively propose and negotiate with Russia and EAEU countries on the recognition of equivalence by industry and preferential products in the agreement in accordance with the cooperation relationship Vietnam continues to innovate and effectively apply national single window, simplify administrative and import-export procedures - Improve infrastructure and cut logistics cost: Vietnam should continue to spend resources to invest in infrastructure systems, cut logistics cost related to tolls, seaports, warehouses, etc and administrative procedures such as certificate of origin, customs clearance or other documents For shipping goods to Russia’s market, Vietnam opens the shipping route between Vietnam and the Eurasian economic union in the near future to improve the efficiency of import and export activities between the two regions Simultaneously, in long term, Vietnam should study to invest in and upgrade the Asia-Europe railway transport route to connect Vietnam, transit China, Kazakhstan to Russia Transporting by the railroad will reduce cost and ability to transport large volumes of goods safely compared to sea transport - Payment in commercial transactions between Russia and Vietnam: The two sides should have specific policies and regulations related to payment currency, such as recognizing the conversion between the ruble and Vietnamese dong as a payment intermediary of the Eurasian economic union in order to limit risks and promote trade exchange between Vietnam and Russia - Connect and expand the market through business communities in Vietnam and Russia: In order to increase the rate of taking of incentives in the agreement, cooperation and coordination between state management agencies and businesses of the two sides are very important Vietnam’s trade counselor in Russia and Russia in Vietnam actively support businesses to find partners through forums and trade https://dangcongsan.vn/thoi-su/dua-kim-ngach-thuong-mai-viet-nam lien-bang-nga-len-10-ty-usd-517424.html 21 exhibitions Simultaneously, it is necessary to promote the role of the Vietnamese community who are working, studying and doing business in Russia as well as the Russian community and Russian businessmen who are working and live in Vietnam to maintain, connect and exchange trade - Vietnam support enterprise to set up supply chain which provide agriculture products in Russia: To be able to export to the Russian market, Government should support Vietnamese businesses in setting up supply system in the host country to provide products in a supermarket chain - Promote trade in goods through foreign investment activities: Vietnam and Russia should continue and expand the implementation of joint projects in the oil and gas field, attract investors of the two countries to increase investment in the fields such as agriculture, fisheries, forestry and industry serving agriculture, irrigation, disaster prevention Strengthen cooperation and expand markets in the fields of trade, investment, finance and banking in Russia’s Far East 5.2.3 Solutions to enhance industry association role - Organize trade promotion, update information about the Russian market and EAEU countries for businesses according to each specific product - Build development strategies for industries and improve export capacity for Vietnamese enterprises to the Russian market - Enhance connective with relevant individuals, organizations and multinational corporations to bring Vietnamese goods into the Russian supermarket system - Organize to train professional, Russian market research skills for officials and employees of the association, businesses, organizations and individuals who need to meet actual requirements 5.2.4 Solutions for enterprises - Continue to export products in competitive advantage industries to the Russian market - Take advantage of e-commerce methods to promote the export of goods to Russia - Improve enterprises production capacities and create an initiative in exporting to the Russian market 5.3.5 Other solutions - Vietnam continues to implement macro solutions in a synchronous manner, consistent, timely, flexible, prioritize macroeconomic stability in the coming time to ensure the implementation of the socio-economic development strategy for the period of 2021 - 2016 - Vietnam should accelerate further reform processes, business environment to create a favorable environment for businesses to shorten transaction time, reduce administrative costs, thereby cutting input costs, improving competitiveness 22 - Improve Vietnamese goods competitiveness when implementing the Vietnam - EAEU FTA by identifying advantageous products and attracting, creating favorable conditions for enterprises to invest in production - Complete education and training policies to aim at developing highly qualified professional and technical human resources with reasonable structure in terms of qualifications and occupations and improve new qualities of employees 5.3 Some recommendations 5.3.1 For Government, Ministries and Localities - The Government continues to develop and improve legal system and trade policies to fully implement commitments in the agreement according to the proposed roadmap, improve the quality and effectiveness of legal documents, check and monitor policies implementation process - Enhance the competitiveness of industries in which Vietnam has a competitive advantage - Develop a system of national standards in line with international standards according to commitments in the agreement to promote production activities to meet product quality requirements and improve competitiveness, create reputable Vietnamese brands when export to the Russian market in the near future - Continue to reform and simplify administrative procedures and issue licenses related to import and export activities - Promote further trade promotion activities, exchange delegations at all levels and business forums between Vietnam, Russia and member countries - Simultaneously, the Government should have policies to support enterprises to participate in export activities 5.3.2 For enterprises and industry association - Business associations as well as the Vietnam Chamber of Commerce and Industry (VCCI) need to be more proactive in improving operational efficiency, support and protecting the interests of enterprises who participate in international trade in general and the EAEU market, Russia in particular - Business associations need to coordinate with state management agencies to directly organize trade promotion activities, market research to support information provision and connect between businesses of the two countries - Business associations need to actively expand cooperation with Russian agencies within their authorized powers to directly access information, participate and cooperate in the proposal to develop specific criteria of technical barriers to quality regulation, designs and standards related to hygiene and food safety, environment and security for export products of the two sides through consultation with the association 23 24 - For enterprises, need to pay more attention to learning, study and updating regulations on non – tariff barriers such as TBT, SPS and certificate of origin of the EAEU and Russia related to their exports which not only pass inspection and control, but also take advantage of new incentives and opportunities from the agreement's nontariff commitments - Enterprises also need to participate in the process of developing and issuing standards, technical regulations by an industry group on non-tariff barriers so that Vietnam can not only obtain standards consistent with its commitments but also in line with practices of manufacturing enterprises and export to the EAEU market in general, Russia in particular in the framework of the agreement - Improve product quality, price, and design in line with a target market that will create a competitive advantage, reputation and brand of the business on its products 5.4 Limitations of research and future research directions in next time 5.4.1 Limitations of research For research data: Vietnam - EAEU Free Trade Agreement was signed on May 29, 2015 and took effect on October 5, 2016, this agreement is more political than economic, the signing of the agreement shows that Russia considers Vietnam a comprehensive strategic partner and implement Russia's Look East (RLE) strategy in Asia-Pacific region in the context of a serious relationship with Western countries that affect Russia's economy and interests In the scope of research in terms of the time of the thesis, the author only assesses the situation and calculate trade indicators between Vietnam and Russia from 2012 (2012 marked the comprehensive strategic partnership between Vietnam and Russia) to 2019, years in the period before and after the agreement into force Simultaneously, in order to increase the number of observations for the quantitative research model, the thesis uses unbalanced repeating panel data by industry from 2001 to 2019 to estimate the impact of the agreement on trade between Vietnam and Russia However, because the agreement has been come into effect in a short time (from 2016 to present), the assessment of the impact of the agreement on trade between the two countries, as well as the benefits that the agreement brings to parties that rely on the import and export data after the entry into force of the agreement to be still limited On the other hand, according to the tariff reduction schedule in the agreement until 2026, and the abundance of trade barriers to protect the Russian market and countries in the EAEU Therefore, assessing the positive effects of the agreement and high economic benefits for the parties is quite difficult and unclear after the agreement comes into force For research method: The thesis uses a quantitative method, specifically estimating the gravity model to assess the impact of a trade agreement on trade between two countries before and after the agreement, the quantitative variables used in the model to base on the results of the literature review and the specificity of the Vietnam - EAEU free trade agreement, which is the research data sample that only includes import and export value between Vietnam and EAEU countries Therefore, the thesis uses the fixed effects model (FEM) However, in addition to the quantitative variables included in the model, there are also some characteristic variables such as economic and political shocks, Russia’s foreign policy, foreign policy of Vietnam and Russia, trade barriers or indirect impacts of international investment activities of members in the agreement on trade which not include in the model because variables are not quantifiable, the author has used qualitative analysis to clarify the variables of the impact factors In addition, to assess the impact of this agreement on trade between Vietnam and Russia as well as the benefits to other industries, competitive advantages products and highly complementary in trade exchange between two countries, the thesis must perform forecasts about the impact of the agreement on trade liberalization between Vietnam and Eurasian Economic Union to 2026 However, in the context of complicated developments in political and economic relations between major countries (Russia - US, Russia - EU, Russia - China) In particular, the emergence of the Covid-19 pandemic has affected world economic growth and global trade due to disruptions in the global supply chains of multinational companies in early 2020 Simultaneously, Covid19 has impacted the world economy in general, and the economy of Vietnam and Russia in particular due to countries implementing social distancing and taking solutions related to preventing the pandemic The Covid19 pandemic is considered a huge "shock" to affect economy and production activities as well as lives of people around the world, so far this pandemic has not yet ended Therefore, forecast trade growth prospects between Vietnam and Russia as well as the impact of this agreement is very difficult in the near future and meaningless in the context of the Covid-19 pandemic is still very complicated now The author only provides the prospect of trade between Vietnam and Russia which is based on political commitments of the two countries' senior leaders, rather than rely on forecast results from the quantitative model 5.4.2 Future research directions in next time From the thesis limitations, the author would like to suggest some research in the future as follows - The study uses the Computable General Equilibrium (CGE) model to analyze the impact of the agreement on linkages in the economy and simulate the impact of the agreement on investment, science and technology, and shift factors of production by industry between Vietnam and Russia, Vietnam and EAEU countries - Analyze directly and indirectly the impacts of liberalization trade policy in the framework of the agreement on foreign direct investment and scientific and technological cooperation between Vietnam and Russia in the new context ... directly with domestic goods but also meet the needs of Vietnam's consumption - Trade between Vietnam and Russia in EAEU + Export and Import market share between Vietnam and Russia Vietnam's share... Vietnam’s trade counselor in Russia and Russia in Vietnam actively support businesses to find partners through forums and trade https://dangcongsan.vn/thoi-su/dua-kim-ngach-thuong-mai-viet -nam. .. industry i from Vietnam to country j in year t; IX ୧୨୲ is Vietnam import value of the industry from country j in year t; GDP୲ , GDP୨୲ are Gross Domestic Product of Vietnam, country j in year
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