Analyzing the impact of the EVFTA on the importation of transportation vehicles, parts, and components into Vietnam from the EU: A SMART model approach


Authors

  • Tran Thi Mai Thanh VNU University of Economics and Business
  • Duong Thu Huyen VNU University of Economics and Business
  • Au Thi Thanh Hiep VNU University of Economics and Business
  • Dinh Hoang Linh Mai VNU University of Economics and Business
  • Nguyen Thi Nha Nam VNU University of Economics and Business
  • Nguyen Duy Dat Thuongmai University
  • Luong Thuy Linh VNU University of Economics and Business
DOI: https://doi.org/10.57110/vnu-jeb.v4i4.288

Keywords:

EVFTA, transportation imports, SMART model, trade creation

Abstract

This study examines the impact of the EU-Vietnam Free Trade Agreement (EVFTA) on Vietnam’s imports of transportation vehicles, parts, and components from the EU. Using the SMART model and data from UN COMTRADE and Vietnamese government agencies, the analysis shows modest increases in import values. Growth rates are 0.23% with the EVFTA alone and 0.21% when the Regional Comprehensive Economic Partnership (RCEP) is also considered. These findings reveal different effects among EU member states and product categories, especially in HS group 87 (vehicles) and HS group 89 (ships and boats), where trade creation is notable for Germany, Slovakia, and Italy. However, the study also finds significant trade diversion, with $361.91 million shifting from other regions to the EU. Despite these modest gains, the EVFTA positively impacts Vietnam’s industrial growth and green energy transition by enabling the import of advanced EU products. The research emphasizes the importance of considering how agreements like the RCEP influence the broader economic effects of the EVFTA, as some benefits shift to RCEP countries like Japan, South Korea, and China.

References

Tu, A. (2022). Vietnam Railways to promote international links. VnEconomy. <https://vneconomy.vn/vietnam-railways-to-promote-international-links.htm> Accessed 10.3.2024.

Baker, P. (2015). Sustainable impact assessment of the EU – Vietnam Free Trade Agreement (International Trade and Economics Series). International Economics.

Baker, P., Vanzetti, D., & Pham, T. L. H. (n.d.) Sustainable impact assessment EU - Vietnam FTA (European Trade Policy and Investment Support Project). [Final Report. Hanoi Law University].

Brauer, R., Vu, D. T., Frey, N. (2014). Free Trade Agreement between the EU and Vietnam. Difficult Partnership. KAS International Reports. 31-47.

Bui. D. L., Nguyen. L. Q. M., & Ahmed. R. (2020). The potential impacts of the EVFTA Vietnam's imports of dairy products from the EU: a SMART model analysis. Journal of International Economics and Management. 21(2). 66-90.

Bui. T. V. (2022). Impact of the CPTPP Agreement Vietnam’s meat imports. Master Thesis. Vietnam National University. Hanoi]. Library and Digital Knowledge Centre.

Commission for Information and Education. (2023). The Politburo orients the development of Vietnam’s railway transport. From rom https://tulieuvankien.dangcongsan.vn/home/chu-truong-chinh-sach-moi/bo-chinh-tri-dinh-huong-phat-trien-giao-thong-van-tai-duong-sat-viet-nam-3901. accessed 10/03/2024

Dam. T. P. T., & Vu. T. B. (2022). Evaluate the impact of EVFTA on VietNam's export of electronic goods. computers and their parts to the EU. International Economic Integration: A Journey to The New-Generation FTAs. Vietnam National University Press. Hanoi. 189-203.

Davis, L. W., & Kahn, M. E. (2010). International trade in used vehicles: The environmental consequences of NAFTA. American Economic Journal: Economic Policy, 2(4), 58-82.

Doan. D. M., & Nguyen. D. H. (2021). The potential impacts of the EVFTA on Vietnam’s exports of agricultural products: An application of the SMART model. Journal of International Economics and Management. 21(2). 47-65.

Doan. M., Le. T. V. N., Dinh. T. N. H., & Pham. M. D. Vietnam's meat import market under the Impacts of the European-Vietnam Free Trade Agreement and quality management demand. Management. 25(1). 99-117.

European Union (2018). The economic impact of the EU - Vietnam Free Trade Agreement. Publications Office of the European Union.

Ha. V. H., & Nguyen. T. M. (2022). Assessing the impact of EVFTA on Vietnam's textile and garment exports to the UK. International Journal of Professional Business Review. 7(2).

Huong, V. T. (2017). An application of the SMART model to assess the impacts of the EVFTA on Vietnam's imports of automobiles from the EU. VNU Journal of Science: Economics and Business, 33(2), 1-22.

Ji. S., & Yoo, J. (2018), A study on the changes of agricultural import structure according to implementation of FTAs in South Korea, Journal of Korea Trade, Vol. 22 No. 1, pp. 2-16. https://doi.org/10.1108/JKT-01-2018-0001

Jones. K. G., & Blayney. D. (2014). Assessing changes in dairy product import demand: The case of South Korea with implementation of the KORUS FTA. Agribusiness. 30(1). 74-84.

Katsioloudes. M. I., & Hadjidakis. S. (2007). International business: A global perspective. Butterworth-Heinemann Elsevier. Oxford.

Le. T. V. N., Doan. N. M., & Pham. M.D. (2020). European-Vietnam Free Trade Agreement (EVFTA) impacts on imports: a case study. Journal of Security & Sustainability Issues. 9(M). 56-68.

Moon. H. P., Lee. H. K., & Park. H. U. (2013). Impacts of the KORUS FTA Orange Import Tariff-Cut on Domestic Fruit Prices. The Korean Journal of Agricultural Economics.

Nga, L. T. V., Huy, D. T. N., Minh, D. N., & Dat, P. M. (2020). European-Vietnam Free Trade Agreement (EVFTA) impacts on imports: A case study. Journal of Security and Sustainability Issues, 9(5), 117-129.

Nguyen. B. D., Ta. T. A., & Vu. T. T. (2015). Future Vietnam – EU Free Trade Agreement (Vietnam – EU FTA): An Analysis of Trade Creation and Trade Diversion Effects. External Economics Review. 3-19.

Nguyen. N. D. (2022). The impacts of Vietnam's exports of garments: An application of SMART model. International Economic Integration: A Journey to The New-Generation FTAs. Vietnam National University Press. Hanoi. 57-76.

Nguyen. T. C., & Pham. H. N. (2017). Impacts of the EU - Vietnam Free Trade Agreement on the economy of Vietnam. Institute of Research and Socio-Economic Development. Hanoi.

Nguyen. T. H., & Tran. T. V. (2021). Impacts of Vietnam's pharmaceutical imports from the EU. Journal of Research in Finance-Marketing. 64-81.

Nguyen. T. H., & Trinh. T. N. (2021). Impacts of EVFTA on the exportation of Vietnamese agricultural products to the EU market. Journal of International Economics and Management. 21(1). 1-23.

Nguyen. T. T. T., & Phung. T. L. P. (Eds). (2021). Exploiting the EVFTA to import and export goods between Vietnam and Germany. Centre for WTO and International Trade Vietnam Chamber of Commerce and Industry.

NH. (2022. December 4). THACO officially assembles BMW 3-series. 5-series. X3 and X5 cars in Vietnam. Tuoi Tre News. https://tuoitrethudo.vn/thaco-se-chinh-thuc-lap-rap-xe-bmw-3-series-5-series-x3-va-x5-tai-viet-nam-213035.html. accessed 10/03/2024.

Nong. H. X. (2020). Importing steel from some Northeast Asian countries and its impact on Vietnam’s steel industry [Master's Thesis. Hanoi National University].

Pham. H. T., & Dang. T. P. (2022). Sustainable export development of Viet Nam's goods to the EU market in the context of the implementation of EVFTA - Some policy recommendations. Directions for strategies and policies of import and export of goods for Vietnam’s sustainable development towards 2030. 114-125.

Pham. N. M., Nguyen. T. H., Le. H. K., Hoang. T. V., & Nguyen. K. L. (2018). Impacts of the new generation of free trade agreements (FTAs) on developing member export-import markets - Vietnam case study. Вьетнамские исследования. 2(3). 18-31.

Plummer. M. G., Cheong. D., & Hamanaka S. (2010). Methodology for Impact Assessment of Free Trade Agreements. Asian Development Bank.

Prajakta. A., Rahul. C. & Pravin. J. (2022). Potential gains from India - Australia Free Trade Agreement: An ex-ante evaluation. A Journey to the New-Generation FTAs. Vietnam National University Press. Hanoi. 37-56.

Quang. V. N. (2022). The EVFTA agreement and the issues it poses for Vietnam’s economy. <https://vietq.vn/hiep-dinh-evfta-va-nhung-van-de-dat-ra-doi-voi-nen-kinh-te-viet-nam-d202850.html> Accessed 15.3.2024.

Russo, M., Alboni, F., Sanginés, J. C., De Domenico, M., Mangioni, G., Righi, S., & Simonazzi, A. (2022). The changing shape of the world automobile industry: A multilayer network analysis of international trade in components and parts. Institute for New Economic Thinking Working Paper Series, 173.

Huong, T. (2023. January 1). Automotive companies increase production in Vietnam. Bao Dau Tu. https://baodautu.vn/doanh-nghiep-o-to-tang-san-xuat-tai-viet-nam-d181312.html. Accessed 10.03.2024.

Dat, T. (2023). What are the key projects of the Vietnamese automotive industry in 2023? Cartimes. <https://cartimes.tapchicongthuong.vn/bai-viet/dau-la-du-an-trong-diem-cua-nganh-cong-nghiep-o-to-viet-nam-nam-2023-14656.htm> Accessed 10.03.2024.

Tran. D. T., Bui. V. T., Vu. N. M., Pham. T. S., Truong. H. M., Dang. T. T., & Trinh. T. V. (2021). Impact of EVFTA on trade flows of fruits between Vietnam and the EU. The Journal of Asian Finance. Economics and Business, 8(5). 607-616.

Tran. T. T., & Do. T. M. T. (n.d.). Prominent impacts of the New-Generation FTA on Vietnam’s economic growth. Proceedings of the National Conference on Science, 5, 60-71. National Economics University.

VCCI (2016). Summary of EVFTA. <https://wtocenter.vn/file/18176/ttwto-tom-luoc-evfta-final--eng.pdf> Accessed 10.03.2024.

Vo. V. T (2016). Impacts of the Trans-Pacific Partnership Agreement on seafood exports: Comparative research with the Vietnam-EU Free Trade. Master’s Thesis. Hanoi National University.

VOV (2022). (News) EVFTA presents opportunities and challenges for exporters in 2023. TTWTO VCCI. < https://wtocenter.vn/chuyen-de/21039-evfta-presents-opportunities-and-challenges-for-exporters-in-2023> Accessed 10/03/2024.

Vu, H. T. (2016). Assessing potential impacts of the EVFTA on Vietnam’s pharmaceutical imports from the EU: An application of SMART analysis. SpringerPlus 5(1), 1-22.

Vu, T. H., & Nguyen. H. C. (2022). Assessing impacts of the United Kingdom - Vietnam Free Trade Agreement on Vietnam’s electronic exports. International Economic Integration: A Journey to The New-Generation FTAs. Vietnam National University Press. Hanoi. 14-36.

Vu, T. H., & Nguyen, T. M. P. (2016). Sectoral impact assessment of the Vietnam-EU Free Trade Agreement: Using trade indicators. VNU Journal of Economics and Business, 32(3).

Vu, T. H., & Pham, M. T. (2017). An application of the Smart model to assess the impacts of the EVFTA on Vietnam’s imports of automobiles from the EU. VNU Journal of Economics and Business, 33(2).

Vu, T. T. (2017). The impact of the Trans-Pacific Partnership Agreement on Vietnam’s textile imports from China according to the theory of trade diversion. Master’s Thesis. National Economics University.

Yadav, N. (2014). Impact of trade facilitation on parts and components trade. The International Trade Journal, 28(4), 315-343.

Downloads

Download data is not yet available.

Downloads

Published

25-08-2024

Abstract View

330

PDF Downloaded

216

How to Cite

Tran Thi Mai Thanh, Duong Thu Huyen, Au Thi Thanh Hiep, Dinh Hoang Linh Mai, Nguyen Thi Nha Nam, Nguyen Duy Dat, & Luong Thuy Linh. (2024). Analyzing the impact of the EVFTA on the importation of transportation vehicles, parts, and components into Vietnam from the EU: A SMART model approach. VNU University of Economics and Business, 4(4), 32. https://doi.org/10.57110/vnu-jeb.v4i4.288

Issue

Section

Original Articles