The Impact Of Participation In FTA On The Economic Development Of Vietnam And Strategic Options

In recent twenty years, the economic globalization has swept across the world, and the participation in FTA has become an important choice for more and more countries to gain economic development goals. Vietnam’s foreign trade co-operation has focused on the ASEAN region, mainly focused on Vietnam’s participation in the bilateral and regional free trade agreement to develop the economy. The economic and trade effects arising from Vietnam’s participation in FTA is the focus of the current academic and practical circles. This paper uses economic data bases in related FTAs of Vietnam(up to 2014) as the empirical analysis, using the new trade theory and the economic geography theory as the foundation, focusing on the achievement and negative effect of Vietnam’s participation in FTA. The paper combined with the relevant economic data of Vietnam’s foreign trade development, key economic zone layout, the adjustment of economic structure, FDI attraction, GDP growth and so on, so that the paper selected and improved the computable general equilibrium model and the classical gravity model to measure the economic and trade effects of Vietnam’s participation in FTA. Based on the existing problems in reality, the paper has put forward the countermeasures to deal with FTA. The research of this paper has shown that since Vietnam’s participation in FTA, the country has gained so many achievements such as rapid GDP growth, large increase in the amount of FDI attraction, more and more increasingly modernize the structure of the economy, trade flows rapidly develop, key economic zone plays a more and more important role in the economic development of the whole country. At the same time, FTA has brought a certain negative impact on Vietnam; the main problem is that domestic enterprises are facing to increasing competitive pressure.This paper is divided into 9 parts as followings:Chapter 1 is the introduction part. Mainly introduces the background of the research problem, Vietnam domestic and foreign related research papers situation. At the same time, this chapter also makes clear the significance of the research, and put forward the research methods and technical routes.Chapter 2 refers to the related concepts, basic theories and methodology. This chapter aims to brief Introduction of FTA traditional concepts and a new generation of FTA, the main classification and level of the regional economic integration, the establishment of the basic theory of FTA, to provide theoretical support for further research. And then, this chapter also introduces the empirical model methodology, which can be used to the Computable General Equilibrium Model and the gravity model.Chapter 3 refers to FTA development strategy over the world and then suggests some experiences for Vietnam FTA strategy. Taking several typical examples, such as China, Korea and Japan, this chapter introduces the development trend of FTA in the world, summarizes these countries’ FTA development strategies and their beneficial experiences for Vietnam. On the basis of these typical countries, the chapter puts forward the enlightenment of the development strategy of FTA in Vietnam.Chapter 4 concentrates on the process of Vietnam’s participation in FTAs. Summarizing Vietnam’s participation in FTAs, and the main contents of each FTA are also introduced, especially the classification of the trade goods and the arrangement of the tax reduction.Chapter 5 refers to the influence of FTA strategy on the economic development of Vietnam. Based on the theoretical basis of the FTA strategy established in the previous chapters, combined with the development process of Vietnam’s FTA strategy, the impact of FTA strategy on Vietnam’s economic development was analyzed qualitatively.Chapter 6, based on the Computable General Equilibrium Model, the economic benefit of FTA in Vietnam is calculated. In this chapter, the author constructs and uses CGE model to analyze the economic benefits of Vietnam’s participation in FTA. And ingredients play the advantages of CGE, the forecast has come into force and have the potential of FTA to Vietnam’s macroeconomic effect.Chapter 7 is the next step to assess the impact of FTA on Vietnam trade flows-based on the analysis of the gravity model, the impact of the expansion of the free trade agreement and other variables on the impact of FTA on Vietnam trade flows are empirically analyzed. In order to overcome the shortcomings of the CGE model, the gravity model is applied in order to obtain some more reliable conclusions.Chapter 8 refers to the reaction policies of Vietnam’s participation in FTA. Focusing on existing problems in the FTA strategy implementation, proposing the new trade policy framework in Vietnam and the way of making, from the strategic target, strategic principles, development path, partner selection, initially propose Vietnam overall strategic FTA.Chapter 9 is conclusion and prospect of the thesis. This chapter summarizes the full text, summarize the main conclusions of the study, make clear the innovation of the paper, and examine the lack of research and follow-up work to make a prospect.