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27/07/2021
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Bui, D. L., Nguyen , L. Q. M., & Ahmed, R. (2021). The potential impacts of the EVFTA on Vietnam’s imports of dairy products from the EU: a SMART model analysis. Journal of International Economics and Management, 21(2), 66-90. https://doi.org/10.38203/jiem.021.2.0029
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The potential impacts of the EVFTA on Vietnam’s imports of dairy products from the EU: a SMART model analysis
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Abstract
This study investigates the potential impacts of tariff elimination under the European Union - Vietnam Free Trade Agreement (EVFTA) on Vietnam’s imports of dairy products from the European Union market. The SMART model, which is a simulation tool under the WITS, is employed with support data from TrendEconomy and Trade Map Database, UNCTAD’s TRAINS, WTO’s IDB (Integrated Data Base), and Vietnam’s Ministry of Finance. The study examines two scenarios of Vietnam’s tariff reduction commitments under the EVFTA and the big picture vVietnam’s import value by product line and by European Union (EU) nations would increase insignificantly as the trade creation effect dominates the trade diversion. Additionally, the results indicate insignificant welfare gain for the consumers and potential revenue loss for the government. The study provides insights for Vietnam’s dairy industry and policymakers to fully grasp the possible benefits and losses under the EVFTA and implications for decision-making.
Article Details
Keywords
EVFTA, SMART model, Vietnam’s import
References
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Vu, H.T. and Pham, T.M. (2017), “An application of the SMART model to assess impacts of the EVFTA on Vietnam’s imports of automobiles from the EU”, VNU Journal of Science: Economics and Business, Vol. 33 No. 2, pp. 1 - 4.
WTO. (1995), “The general agreement on trade in services”, Available at https://www.wto.org/english/ docs_e/legal_e/26-gats.pdf (Accessed 12 April, 2020).
WTO. (2012), A practical guide to trade policy analysis, WTO Publications.
Zhao, L., Malouche, M. and Newfarmer, R. (2008), “China’s emerging regional trade policy”, Journal of Chinese Economics and Foreign Trade Studies, Vol. 1 No. 1, pp. 25 - 26.
Zgovu, K. and Kweka, J. (2009), “Empirical analysis of tariff line-level trade, tariff revenue and welfare effects of reciprocity under an Economic Partnership Agreement with the EU: evidence from Malawi and Tanzania”, in Proceedings of the African Economic Conference.
Akinkugbe, O. (2000), “The European Union - South Africa Free Trade Agreements and the SADC region”, South African of Economics, Vol. 68 No. 3, pp. 641 - 642.
Baker, P., Pham, L.H. and Vanzetti, D. (2014), Sustainable impact assessment EU-Vietnam FTA, Hanoi: MUTRAP IV.
Cheong, D. (2010), “Methods for Ex ante economic evaluation of Free Trade Agreements”, ADB Working Paper Series on Regional Economic Integration No. 52, Manila: Asian Development Bank.
Delegation of the European Union to Vietnam. (2019), “Guide to the EU Vietnam Trade and investment agreements 2019”, Available at https://trade.ec.europa.eu/doclib/docs/2016/june/ tradoc_154622.pdf (Accessed 12 December, 2020).
European Commission. (2018), “EU-Vietnam trade and investment agreements”, Available at http:// trade.ec.europa.eu/doclib/press/index.cfm?id=1437 (Accessed 12 December, 2020).
Hadjinikolov, D. and Zhelev, P. (2018), “Expected impact of EU-Vietnam free trade agreement on Bulgaria’s exports”, Economic Alternatives, University of National and World Economy, Sofia, Bulgaria.
Jon, B., Christopher, F.C., Samuel, D.S. and Fabience, V. (2020), “New EU - Vietnam FTA Enters into Force”, Whitecase, Available at https://www.whitecase.com/publications/alert /new-euvietnam-fta-enters-force (Accessed 12 December, 2020).
Laird, S. and Yeats, A. (1986), “The UNCTAD trade policy simulation model: a note on the methodology, data and uses”, UNCTAD Discussion Paper No. 19, Geneva.
Laird, S. and Yeats, A. (1987a), “Empirical Evidence concerning the Magnitude and Effects of Developing Country Tariff Escalation”, The Developing Economies, Vol. 35 No. 2, pp. 99 - 122.
Laird, S. and Yeats, A. (1987b), “Tariff cutting formulas and complications”, In The Uruguay Round : a handbook on the multilateral trade negotiations, World Bank, Washington DC.
Mikic, M. and Gilbert, J. (2007), Trade statistics in policymaking - A handbook of commonly used trade indices and trade indicators, United Nations Economic and Social Commission for Asia and the Pacific.
Mugano, G., Brookes, M. and Le Roux, P. (2013), “Estimating the impact of a COMESA Customs Union on Zimbabwe Using a Tariff Reform Impact Simulation Tool (TRIST)”, African Journal of Business Management, Vol. 7 No. 8, pp. 4000 - 4010.
Philip, M.J., Laurenza E., Pasini F.L., Dinh V.A., Nguyen H.S., Pham A.T. and Minh N.L. (2011), “The free trade agreement between Vietnam and the European Union: quantitative and qualitative impact analysis”, MUTRAP III, Hanoi.
Ratisai, C. (2014), An assessment of the impact of Zimbabwe joining SACU using the WITS/SMART model (Unpublished master’s thesis), University of Zimbabwe.
The Government of the Socialist Republic of Vietnam. (2017), Decree No. 125/2017/ND-CP dated November 16, 2017 of the Government on amending a certain Articles of the Government’s Decree No. 122/2016/ND-CP dated September 01, 2016 on export duty schedule, preferential import duty schedule and lists of commodities and their flat tax rates, compound tax rates and outside tariff quota rates.
Thurlow, J. and Holden, M. (2003), “The Impact of the EU-SA FTA on Selected COMESA Countries”, The South African Journal of Economics, Vol. 70 No.2, pp. 287 - 309.
TrendEconomy. (2020), “Vietnam, imports and exports, world, Dairy produce 2009-2018”, Available at https://trendeonomy.com/data/h2/Vietnam/04 (Accessed 12 December, 2020).
Tu, A.T. and Le, N.M. (2015), “Challenges to Vietnam from the comprehensive integration into ASEAN + 6: Analyses for sectors”, Journal of Economics and Development, Vol. 21 No. 212, pp. 2 - 12.
UNCTAD. (1985), Trade and Development Report, United Nations Publication.
Viner, J. (1950), The customs union issue, New York: Carnegie Endowment for International Peace.
VITIC. (2020), “Xuat khau banh keo, san pham ngu coc sang cac thi truong 6 thang dau nam 2020”, Available at http://vinanet.vn/thuong-mai-cha/xuat-khau-banh-keo-san-pham-ngu-coc-sangcac-thi-truong-6-thang-dau-nam-2020-733066.html (Accessed 10 October, 2020).
Vo, T.T., Le, H.Q. and Hoang, H.T. (2018), “Effects of EVFTA on Vietnam’s apparel exports: An application of WITS-SMART simulation model”, Journal of Asian Business and Economic Studies, Vol. 25 No. 2, pp. 4 - 28.
Vu, H.T. (2016), “Assessing potential impacts of the EVFTA on Vietnam’s pharmaceutical imports from the EU: an application of SMART analysis”, Springer Plus, Vol. 5, 1503.
Vu, H.T. (2016), “Assessing potential impacts of the EVFTA on Vietnam’s pharmaceutical imports from the EU: an application of SMART analysis”, Springer Plus, Vol. 5 No. 1, pp. 2 - 19.
Vu, H.T. and Pham, T.M. (2017), “An application of the SMART model to assess impacts of the EVFTA on Vietnam’s imports of automobiles from the EU”, VNU Journal of Science: Economics and Business, Vol. 33 No. 2, pp. 1 - 4.
WTO. (1995), “The general agreement on trade in services”, Available at https://www.wto.org/english/ docs_e/legal_e/26-gats.pdf (Accessed 12 April, 2020).
WTO. (2012), A practical guide to trade policy analysis, WTO Publications.
Zhao, L., Malouche, M. and Newfarmer, R. (2008), “China’s emerging regional trade policy”, Journal of Chinese Economics and Foreign Trade Studies, Vol. 1 No. 1, pp. 25 - 26.
Zgovu, K. and Kweka, J. (2009), “Empirical analysis of tariff line-level trade, tariff revenue and welfare effects of reciprocity under an Economic Partnership Agreement with the EU: evidence from Malawi and Tanzania”, in Proceedings of the African Economic Conference.