VIETNAM NATIONAL UNIVERSITY

INTERNATIONAL SCHOOL

FINAL ASSIGNMENT

GROUP 3

Semester I, Academic year 2023 - 2024

Lecturer: Tran Thi Mai Thanh

Course name: International Trade Management

Course Code: INS3019 04

Group member:

- Le Thi Yen Ninh – 20070295

- Nguyen Thi Thuy Huyen – 20070202

- Le Thi Van Anh – 20070081

- Tieu Thi Nguyet Ha – 20070157

- Vu Dang Duy - 20070133

- Pham Khanh Phuong - 20070306

Hanoi, December 2023
 Table Of Contents
Part 1: Trade Situation Analysis ..............................................................................................................3

1. Overview of Germany‘s international trade situation in 2022 ............................................................3

1.1 Import and Export Situation of Germany’s in 2022......................................................................3

1.2 Major Import and Export Market ..................................................................................................3

1.3 Major Import and Export Product .................................................................................................4

1.3.1. Major Import Products ..........................................................................................................4

1.3.2. Major Export Products ..........................................................................................................6

2. Main body ...........................................................................................................................................7

2.1 Germany’s Trade Composition .....................................................................................................7

2.1.1 Trade Structure by Industry ...................................................................................................7

2.1.2 Trade Structure By Partners...................................................................................................9

2.2 Germany’s Major Trading United States of America Partner.....................................................10

2.2.1 Comparative advantage .......................................................................................................10

2.2.2 Bilateral trade relations and factors that determine those relations .....................................18

3. Conclusion .........................................................................................................................................19

Part 2: International Trade Policy Analysis – Topic 3 ..........................................................................21

Executive summary ...............................................................................................................................21

Introduction ...........................................................................................................................................21

I. General information of Vietnam - US BTA and Vietnam’s WTO Accession ...................................22

II. The benefit from the BTA (NOT from WTO accession) .................................................................22

1. Benefit ...........................................................................................................................................22

2. Reason ...........................................................................................................................................24

3. Examples .......................................................................................................................................25

4. Recommendation ..........................................................................................................................28

III. Conclusion .......................................................................................................................................29

References .............................................................................................................................................30

Individual Contribution .........................................................................................................................33

1
List of Tables and Figures

Table 1: Top 10 importing markets for the product exported by Germany in 2022 (Sources:

Trademap.org) ............................................................................................................................ 4

Table 2: Top 10 supplying markets for the product imported by Germany in 2022 (Source:

Trademap.org) ............................................................................................................................ 4

Table 3: Top 10 Imported Product of Germany in 2022 ( Sources: Trademap.org) .................. 5

Table 4: Top 10 Exported Product of Germany in 2022 ( Sources: Trademap.org) .................. 7

Table 5: US’s Balance of trade with Germany (Sources: U.S Census Bureau) ....................... 14

Figure 2-1: Top 10 Germany’s export by Industry in 2022 (Sources: Trademap.org) .............. 8

Figure 2-2: Top 10 Germany’s import by Industry in 2022 (Sources: Trademap.org) .............. 8

Figure 2-3: Top 10 Germany’s Export by Partners in 2022 (Sources: Trademap.org) .............. 9

Figure 2-4: Top 10 Germany’s Import by Partners in 2022 (Sources: Trademap.org) ............ 10

Figure 2-5: RCA in Germany in 2022 (Sources: Trademap.org) ............................................. 11

Figure 2-6: RCA in USA in 2022 (Sources: Trademap.org).................................................... 12

Figure 2-7: Trade of US goods with Germany (Sources: U.S Cesus Bureau) ......................... 13

Figure 2-8: Commodity sectors are imported from and exported to Germany by US (Sources:

U.S Cesus Bureau) ................................................................................................................... 15

Figure 2-9: Quantity of 2 products: Foods and Electronic ....................................................... 16

2
PART 1: TRADE SITUATION ANALYSIS

1. Overview of Germany‘s international trade situation in 2022

1.1 Import and Export Situation of Germany’s in 2022

Germany exported goods to the value of 1,574.0 billion euros and imported goods to the value

of 1,494.4 billion euros in 2022. Exports increased by 14.1% and imports by 24.1% compared

with 2021. The foreign trade balance showed a surplus of 79.7 billion euros in 2022. That was

the lowest surplus of the balance of exports and imports since 2000. In 2021, the surplus was

175.3 billion euros. This means that the export surplus in 2022 was down by more than half

from the previous year.

1.2 Major Import and Export Market

The United States, Netherlands, France, China, Poland, and Italy are the top countries actively

doing trade with Germany. Germany’s export destinations in terms of value were the United

States (USD 163,978M), France (121,578M), Netherlands (USD 113,839M) etc.On the import

side, Germany primarily sourced goods from China (USD 207,747M), Netherlands (USD

116,076M), the United States (USD 97,015M) etc.

Importers
Value exported in Trade balance 2022 Share in Germany
2022 (USD (USD thousand) exports (%)
thousand)

United States of 163,978,366 66,963,093 9.9

America

France 121,578,326 48,705,065 7.3

Netherlands 113,839,130 (2,237,386) 6.9

China 112,640,171 (89,107,271) 6.8

Poland 95,111,726 13,928,536 5.7

Italy 92,071,424 16,119,725 5.6

Austria 86,424,216 31,296,132 5.6

3
 United Kingdom 77,591,551 37,698,972 5.2

Switzerland 75,107,005 15,891,251 4.5

Belgium 64,763,081 3,705,801 3.9

Table 1: Top 10 importing markets for the product exported by Germany in 2022

(Sources:Trademap.org)

Exporters
Value imported in Trade balance 2022 Share in Germany
2022 (USD (USD thousand) imports (%)
thousand)

China 207,747,442 (89,107,271) 12.8

Netherlands 116,076,516 (2,237,386) 7.4

United States of 97,015,273 66,963,093 6.2

America

Area Nes 81,236,209 (67,311,955) 5.2

Poland 81,183,190 13,938,536 5.2

Italy 75,951,699 16,119,725 4.8

France 72,882,261 48,705,065 4.6

Belgium 61,057,280 3,705,801 3.9

Czech Republic 60,594,080 (5,258,699) 3.9

Switzerland 59,215,754 15,891,251 3.8

Table 2: Top 10 supplying markets for the product imported by Germany in 2022 (Source:

Trademap.org)

1.3 Major Import and Export Product

1.3.1. Major Import Products

Germany's imports, with significant contributions from fuels, electrical machinery and parts

thereof, pharmaceutical products, plastics and articles thereof, iron and steel were improved in

2022.

4
 Imported value in 2022 (US
Product label $) Share (%)

Mineral fuels, mineral oils and products of 13.18

their distillation; bituminous substances; 207,060,899
mineral ...

Electrical machinery and equipment and parts 12.82

thereof; sound recorders and reproducers, 201,362,706
television ...

Nuclear reactors, boilers, machinery and 11.08

mechanical appliances; parts thereof 174,047,388

Vehicles other than railway or tramway 8.72

rolling stock, and parts and accessories 137,010,409
thereof

5.06
Pharmaceutical products 79,434,183

4.25
Organic chemicals 66,737,055

3.60
Plastics and articles thereof 56,492,939

Optical, photographic, cinematographic, 2.99

measuring, checking, precision, medical or 46,974,117
surgical ...

2.50
Iron and steel 39,333,613

Natural or cultured pearls, precious or semi- 2.41

precious stones, precious metals, metals clad 37,795,680
Table 3: Top 10 Imported Product of Germany in 2022 ( Sources: Trademap.org)

5
1.3.2. Major Export Products

About Germany’ exports, with the exception of motor cars and other motor vehicles principally

designed for transport, exports increased across all product categories, with growth mostly

being driven by exports of machinery, parts and accessories of the vehicles, chemical products

and also increased in exporting instruments , appliances used in medicine.

Exported value in 2022

Product label (US$) Share (%)

Vehicles other than railway or tramway 257,941,481 15.55

rolling stock, and parts and accessories
thereof

Nuclear reactors, boilers, machinery and 253,530,548 15.29

mechanical appliances; parts thereof

Electrical machinery and equipment and 176,844,091 10.66

parts thereof; sound recorders and
reproducers, television ...

Pharmaceutical products 124,128,671 7.48

Optical, photographic, cinematographic, 4.76

measuring, checking, precision, medical or 78,890,264
surgical ...

4.52
Plastics and articles thereof 74,978,622

Mineral fuels, mineral oils and products of 3.72

their distillation; bituminous substances; 61,735,926
mineral ...

2.25
Iron and steel 37,381,212

6
 Exported value in 2022
Product label (US$) Share (%)

2.24
Commodities not elsewhere specified 37,189,645

2.14
Miscellaneous chemical products 35,490,727
Table 4: Top 10 Exported Product of Germany in 2022 ( Sources: Trademap.org)

2. Main body

2.1 Germany’s Trade Composition

The World Customs Organization (WCO) established the Harmonized Commodity Description

and Coding System (commonly known as the "Harmonized System" or merely "HS"), which is

a versatile worldwide product nomenclature. This approach is the cornerstone of most countries'

international trade statistics. In this section, create historical trade structure data for 2022 using

HS4.

2.1.1 Trade Structure by Industry

❖ Export:

In 2022, the top export of Germany are Vehicles other than railway (15.55%); Nuclear reactors,

boilers (15.20%); Electrical equipment (10.66%); Pharmaceutical products (7.48%) and Optical

(4.76%).

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 Figure 2-1: Top 10 Germany’s export by Industry in 2022 (Sources: Trademap.org)

❖ Import:

The top import of Germany are Mineral fuels, mineral oils (13%); Electrical d equipment

(13%); Nuclear reactors, boilers (11%); Vehicles (9%) and Pharmaceutical products (5%).

Figure 2-2: Top 10 Germany’s import by Industry in 2022 (Sources: Trademap.org)

8
2.1.2 Trade Structure By Partners

❖ Export

In 2022, Germany exported mostly to the United States (9.89%), France (7.33%), and

Netherlands (6.86%) .

Figure 2-3: Top 10 Germany’s Export by Partners in 2022 (Sources: Trademap.org)

❖ Import

In 2022, Germany imported mostly from China (12.84%), Netherlands (7.39%), and The

United States of America (6.18%).

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 Figure 2-4: Top 10 Germany’s Import by Partners in 2022 (Sources: Trademap.org)

2.2 Germany’s Major Trading United States of America Partner

2.2.1 Comparative advantage

Based on the comparative advantage theory, the idea of evaluating a country's comparative

advantage product by examining its exports. Typically, a nation's main exports are those in

which it has a competitive advantage. By comparing a country's proportion of a product's

exports in its overall exports to that product's share of exports in the entire amount of exports

worldwide, this coefficient illustrates the relative advantage or disadvantage that a country has

for a particular product. The RCA (Revealed Comparative Advantage) coefficient is calculated

using this formula:

Whereas:

10
Xa,b: Export of product b from country a

Xa: Total exports of country a

Xb: World exports of product b

Xw: Total export of all goods worldwide

For example:

● In Germany: Live animals: Exported value of Germany in 2022 = 1.410.127; Total

products = 1.658.442.825, Exported value in 2022( in the world) = 23.345.692;

Total products = 24.611.066.726.

—> RCA in Germany 2022 = (1410127:1658442825)/(23345692:24611066726) =

0.89635<1

—> When a country has a Revealed Comparative Advantage for a given product (RCA

>1), it is inferred to be a competitive producer and exporter of that product relative to a

country producing and exporting that good at or below the world average.

Figure 2-5: RCA in Germany in 2022 (Sources: Trademap.org)

According to the data table above lists the Germany RCA values for the 2022 Standard Product

Group. From the displayed RCA values for product groups show:

11
- Certain product groups with high RCA values (e.g. Vehicles other than railway, Tanning or

dyeing extracts; tannins and their derivatives; dyes, pigments, etc. ) may indicate a country has

a competitive advantage in exporting that product group. This may reflect the dynamism and

economic positioning of the country in those areas.

- Some product groups with low RCA values (e.g. Vegetable plaiting materials; vegetable

products not elsewhere specified or included etc.) may indicate that a country does not have a

competitive advantage in exporting that product group. This may suggest that the country is

dependent on imports of these products or is having difficulty competing in international

markets.

- Besides, there are some product groups with moderate RCA values that need to be maintained

in this position (e.g Coffee, Live animals,etc.).

Figure 2-6: RCA in USA in 2022 (Sources: Trademap.org)

The data table above lists the USA RCA values for the 2022 Standard Product Group. From the

displayed RCA values for product groups show:

- Certain product groups with high RCA values (e.g. Cereals, Oil seeds and oleaginous fruits;

miscellaneous grains, etc. ) may indicate a country has a competitive advantage in exporting

12
that product group. This may reflect the dynamism and economic positioning of the country in

those areas.

- Some product groups with low RCA values (e.g. Cork and articles of cork, Manufactures of

straw,etc.) may indicate that a country does not have a competitive advantage in exporting that

product group. This may suggest that the country is dependent on imports of these products or

is having difficulty

competing in international markets.

- Besides, there are some product groups with moderate RCA values that need to be maintained

in this position (e.g. Essential oils and resinoids; perfumery; products, whether or not containing

nicotine, etc.).

2.2.1.1. Trade Integration

❖ Trade dependency

In 2022, The United States' total exports to Germany came to $65.2 billion, up 13.5% ($7.7

billion) from 2020; the United States' total imports from Germany came to $135.2 billion, up

17.5% ($20.2 billion) from 2020; U.S; and the trade deficit was $70.1 billion, a 21.5% ($12.4

billion) increase.The trade balance of Germany with the US in 2022 was negative, with imports

exceeding exports.

Figure 2-7: Trade of US goods with Germany (Sources: U.S Cesus Bureau)

13
Germany is the third-biggest exporter in the world, behind the United States and China. Every

fourth job in Germany depends on exports, which accounted for 47 percent of Germany’s GDP

in 2022(almost four times the export share of the U.S. GDP).

The amount of American exports to Germany and imports from Germany in 2022 was higher

than the previous five-year average level, not accounting for inflation. By value, unadjusted for

inflation, the U.S. trade deficit with Germany exceeds the previous five-year average level.

Table 5: US’s Balance of trade with Germany (Sources: U.S Census Bureau)

❖ Main industries

In 2022, of $65.2 billion in U.S. exports to Germany, Transportation equipment accounted for

26.2% of U.S. exports to Germany in 2022, followed by chemicals and leather goods (20.3%),

machinery, and mechanical appliances (18.5%). In 2022, of $135.2 billion in U.S. imports from

Germany, the top commodity sectors were Machinery and Mechanical Appliances(26.9%),

Chemicals, Plastics and Leather products (26.4%), and Transportation Equipment (18.2%).

14
Figure 2-8: Commodity sectors are imported from and exported to Germany by US (Sources:

U.S Cesus Bureau)

❖ Trade policy

United States: In recent years, the United States' trade policy has shifted to preserve domestic

industrial and economic interests. To restrict competition from German imports, the US has

enacted protectionist policies such as tariffs and non-tariff barriers. The United

States, for example, have put specific tariffs on some German products, such as steel and

aluminum, and have launched anti-dumping and anti-subsidy investigations into German

products. The policy's purpose is to preserve domestic industry while reducing the trade deficit

with Germany.

Germany: Germany's trade strategy incorporates aspects of protectionism and control.

Germany has implemented limitations and laws to control the scope and content of technology

in commercial activity. For example, Germany's "Made in Germany 2025" program intends to

stimulate development in high-tech areas such as artificial intelligence, robots, and electric

vehicles while also imposing knowledge transfer and data protection restrictions. To protect

domestic industry and ensure information security, Germany has also established non-tariff

obstacles such as product quarantines, technical requirements, and import permits.

❖ Trade theory and Gravity model

Country A is US (i)

15
Country B/trade partner is Germany (j)

The selected product X that Germany exports is electrical machinery.

The imported product Y of the US is food.

Based on a gravity model, and trade theory, we show the factors that affect the imports and

exports of the US and its trade partners.

Figure 2-9: Quantity of 2 products: Foods and Electronic

—> Quantity of food decreased from 220 units down to 100 units; and Quantity of electronics

went up from 200 units to 250 units. If the price of electronic goods increases compared to the

price of food, the economy produces more electronic goods compared to food.

16
—> If food is relatively cheap in the home country and relatively expensive in the foreign

country before trade opens, the effect of trade is to raise food prices at home and reduce them

in foreign.

Gravity model analysis:

- Gravity Model Formula: Fij = G * (Mi Mj)/Dij

In this formula G is a constant, F stands for trade flow, D stands for the distance and M stands

for the economic dimensions of the countries that are being measured. This means that the value

of trade between any two countries decreases with distance between them and is proportionate,

other things being equal, to the product of the GDPs of the two countries.

i: US

j: Germany

Fij: US’s trade with Germany

Mi: GDP of US=21,06 trillion(2022)

Mj: GDP of Germany=14.69 trillion(2022)

Dij: distance (geography, culture, cost, etc.)

G: Constant

In terms of culture and lifestyle, the United States and Germany have little in common. When

compared to other countries, trade from the United States to Germany is relatively distant. This

has had a significant impact on transportation prices and delivery times between countries.

However, due to the two nations' long history of commerce and efficient trade policies, the

process of trade between the two countries continues to this day. Lower pricing has benefited

US consumers, while US corporations have profited greatly from access to the German market.

Germany is one of the largest exporters in the world, below the United States and China.

The positive effects of trade with the United States and the rest of the world are huge for

Germany. Germany's GDP has adjusted for inflation, and it is now the world's second-largest

17
economy, after only the United States. Because of this growth, hundreds of millions of people

have been pulled out of abject poverty.

2.2.2 Bilateral trade relations and factors that determine those relations

According to the aforementioned information, we can see that Germany is one of the United

States’ closest and strongest Allies in Europe. The foundation of U.S.-German ties is our

essential and reciprocal bond as friends, allies, and commercial partners. The following are the

contributing causes to that relationship:

2.2.2.1. Based on Trade Theories

● Major U.S. goods export categories to Germany in 2019 were aircraft and parts ($10.1

billion), vehicles ($7 billion), pharmaceuticals (5 billion), medical equipment ($2.7

billion), and industrial machinery ($2.2 billion), optical and medical instruments ($6.7

billion), and electrical machinery ($5.5 billion).

● Germany is a nation with a highly developed economy, diversified cost of commodities,

and advantageous geographic characteristics that will support the growth of its import

and export of goods to the US.

● With the exchange rate between the Euro (Euro) and Dollars ($) with a lower exchange

rate than other countries, German goods will be exported to the US at a more

competitive price than other countries.

2.2.2.2. Based on the Gravity model

● The US is a developed nation, thus the more the people must spend to support their daily

lives, the larger their needs, expanding the use of high-quality goods.

● Having borders between the US and Germany is a huge advantage that also helps to

reduce freight costs, guarantee the quality of the goods, and meet demand. When

exporting to this nation, there is a demand from the populace.

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 ● In addition, Germany and the United States belong to a number of the same international

organizations in addition to those mentioned above, including the United Nations, Euro-

Atlantic Partnership Council, IMF, World Bank, and WTO . Germany also is an

observer of the Organization of American States.

2.2.2.3. Based on Trade Integration

● As a member of the G-7, G-20, NATO, and the Organization for Security and

Cooperation in Europe, Germany is a prominent player in European politics and a focal

point of European affairs.

● To support American manufacturing and exports, Germany is a major supplier of

investment products like capital equipment to the United States. The main industries in

which Germany invests in the US are manufacturing, wholesale commerce, finance, and

insurance. More than 861,000 American workers are employed by German companies'

U.S. affiliates overall.

3. Conclusion

Germany experienced a dynamic international setting in 2022, with several major factors

impacting its trade situation. Germany’s trade composition was broad, including goods such as

electrical machinery, vehicles and pharmaceutical productsl. Germany’s import and export

relationships are diverse, and the composition of trade varied based on the demand for different

goods and services, as well as Germany’s competitive advantages in various sectors.

The German economy is the fourth largest in the world and accounted for one quarter (24.7

percent) of the European Union’s GDP in 2022. In addition, Germany is the sixth-largest market

for American exports and the United States' biggest trading partner in Europe. Its "social

market" economy is based mostly on market principles, but it also includes extensive social

assistance programs and a high level of government control. Following its cancellation or

postponement in 2020 and 2021 as a result of the COVID-19 pandemic, a large number of these

19
trade shows will resume in 2022, primarily as in-person events. Germany is a key component

around which many American businesses try to build their European and global expansion

strategies due to its volume of trade, population, and central location within the EU. The

bilateral trade relationship was driven by the geographical proximity, shared border, and

integrated supply chains, with the exchange of goods like vehicles, pharmaceutical products,

mineral fuels.

In conclusion, Germany’s international trade in 2022 featured a broad trade composition, with

major trading partners including the United States, China, United Kingdom and Italy.

Comparative advantages, bilateral trade relations, and numerous economic and geographical

factors have influenced Germany’s trade patterns and relationships with its trading partners.

20
PART 2: INTERNATIONAL TRADE POLICY – TOPIC 3

Executive summary

By carefully examining the costs and economic benefits derived from the BTA, this report

provides valuable insights on the topic: "Why does Vietnam benefit from the BTA but not from

joining the WTO?”. We divide the report into three parts: I. Introduction the general information

of Vietnam - US BTA and Vietnam’s WTO Accession, II. Analysis of the benefits of the BTA

(not from WTO accession) and recommendations; the last part is conclusion.

In Part II, analyze the benefits and impacts of BTA on Vietnam's market and give reasons for

them by comparing them with the WTO. Along with that, we provide concrete evidence that

BTA plays an important role in shaping Vietnam's economic trajectory and offer

recommendations for the government and businesses.

Introduction

● Structure: This report conducted research based on three parts: general information

about Vietnam - US BTA and Vietnam's WTO accession, the benefits of the BTA, and

the conclusion.

● Scope of the second part: Find out why Vietnam receives benefits from the BTA but

does not receive benefits from joining the WTO

● Research problem: Why did Vietnam benefit from the BTA but not from WTO

accession?

Compare the benefits that Vietnam receives from BTA, while WTO accession does not

mention those benefits from examples with actual data to find out why Vietnam benefits

from BTA without benefiting from the WTO.

● Issue description: Immediately after the signing of BTA and WTO, both agreements

brought expectations of economic development for Vietnam. However, the BTA

brought results far beyond initial expectations for relationship between Vietnam and

21
 United State, while the WTO, in addition to positive impacts, also had negative impacts

on the Vietnamese economy in global trade. The group had a deeper understanding of

why the BTA brings benefits to Vietnam while the WTO does not.

I. General information of Vietnam - US BTA and Vietnam’s WTO Accession

The Bilateral Trade Agreement (BTA) between the United States and Vietnam is a

comprehensive pact that covers commerce in products, property rights protection, intelligence,

trade in services, investment protection, business facilitation, and transparency. When the BTA

entered into force, the US quickly set the circumstances for Vietnamese products and firms to

enter the US market, and Vietnamese products now face much lower tariffs upon entry into the

US. Vietnam has pledged to overhaul its trade and investment environment in order to establish

a far more equal and level "playing field" in Vietnam for American firms and products.The

BTA has benefited both Vietnam and the United States in several ways.

According to the World Trade Organization (WTO), Vietnam's entry in 2007 constituted a

watershed moment in the country's economic prospects. Vietnam opened its markets to

international commerce and committed to complying with global trade regulations through a

process of comprehensive economic reform and policy adjustment. As a consequence, Vietnam

gained broader market access, more foreign investment, and improved integration into the

global supply chain. Joining the WTO has played a critical role in enhancing Vietnam's

economic growth, expanding export markets, and strengthening its international

competitiveness.

II. The benefit from the BTA (NOT from WTO accession)

1. Benefit

The BTA played a pivotal role in shaping Vietnam's economic landscape and fostering its

integration into the global trading system.

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After joining the BTA, Vietnam has enjoyed increased market access to the United States, one

of the world's largest consumer markets. This leads to an increase in Vietnam's exports to the

United States, boosting revenue and job opportunities. Accompanied by export diversification,

BTA encourages Vietnamese businesses to diversify export products to meet the needs of the

US market. This helps reduce Vietnam's dependence on certain industries and contributes to a

more balanced export portfolio.

At the same time, BTA creates conditions for gradually reducing tariffs imposed on Vietnamese

goods exported to the United States. Lower tariffs have improved the competitiveness of

Vietnamese products in the US market, leading to increased export volumes. This led to a

significant expansion of Vietnam's export sector, especially in industries such as textiles,

electronics and agriculture. BTA also attracts foreign direct investment (FDI) into Vietnam as

international companies seek to take advantage of the improved business environment and

market access opportunities. Through partnerships with US companies, BTA has facilitated the

transfer of advanced technology, production techniques and management expertise to

Vietnamese businesses. This helps enhance Vietnam's industrial capacity and increase the

competitiveness of domestic industries.

A clear benefit of Vietnam joining BTA is improving social welfare and creating jobs for

workers. The expansion of exports and increased foreign investment thanks to the BTA have

contributed to job creation in various sectors. This helps reduce unemployment and raise the

living standards of Vietnamese workers. BTA's positive impact on Vietnam's export-oriented

industries and the growth of the manufacturing sector have led to increased income for workers,

contributing to improving social welfare.

For consumers, lower tariffs and increased import options thanks to the BTA have brought a

wider range of affordable goods and services to Vietnamese consumers. This has improved

access to quality products and enhanced consumer satisfaction.

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In short, although the initial costs of implementing trade reforms are huge, long-term benefits

such as increased market access, foreign investment attraction and improved institutional

capacity have helped Vietnam become a country that plays an significant role in the global

economy.

2. Reason

The sectors that flourished under the BTA might not have been the same as those that benefited

from WTO accession.

The first justification offered is that joining the WTO requires a different degree of commitment

and takes longer to implement than joining the BTA. The BTA is a three-year agreement that

automatically renews unless one party waives it, just like the majority of other trade agreements.

However, the WTO's implementation timelines and degrees of commitment vary depending on

the trade (textiles, agriculture, etc.) and services sectors.

In addition, the WTO and BTA have different trading partners and target markets. While BTA

primarily targets the US market, the WTO commits to promoting Vietnam's international trade

with numerous other nations.

The BTA's real significance lies in the fact that it provides a plan for Vietnam's economic

development rather than just lowering tariffs. It increased economic rivalry and encouraged

reform and growth in general, particularly in the state sector. Reducing tariffs and allowing

foreign companies to compete with native companies are essential while joining the WTO.

Furthermore, one reason the WTO exists is that political constraints prevent governments from

adopting more effective trade policies, and through the reciprocity of free commitments,

countries can overcome these political constraints. WTO regulations and procedures

(https://www.wto.org/) are built on a number of common principles of many countries, not just

Vietnam and United State of America like BTA.

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In short, the provisions of the BTA agreement are built on the basis of WTO principles as a

practical test before entering the major global playground of the WTO. However, the BTA only

emphasizes the trade relationship between Vietnam and the United States, while the WTO

includes many countries around the world and it also involves political issues. Therefore, the

smaller and clearer scope is the reason why Vietnam benefits from joining the BTA but does

not benefit from joining the WTO.

3. Examples

❖ Vietnam’s Agriculture

Especially for Vietnam's agricultural sector, great achievements have been achieved. In the field

of investment cooperation, American businesses have directly invested in dozens of agricultural

projects in Vietnam, with a total investment capital of more than 200 million USD. Currently,

there are still 12 active projects with a total investment capital of 128.9 million USD.

According to data from the US Department of Commerce, in 2002, the total turnover of

Vietnam's agricultural and forestry products exported to the US was 194 million USD (if

according to data from the General Department of Vietnam Customs, this number is even

higher. about 263 million USD), an increase of 25.2% compared to 2001. In the first 9 months

of this year, turnover still increased quite well. The main agricultural products of Vietnam

exported to the US are coffee, cashews, vegetables, rubber, honey... Among them, the products

exported to the US that increased sharply are cashew nuts (up 47, 7%, equivalent to 23 million

USD), processed fruits and vegetables (up 170%, equivalent to 3.1 million USD), wooden

furniture and forest products increased 222% (equivalent to 2.7 million USD)... Agricultural

products and US agricultural supplies exported to Vietnam in recent times have increased but

not significantly (mainly soybeans, wheat, corn, breeding cows, milk and dairy products,

fertilizers, paper pulp and some high-end temperate fruits such as apples, pears, grapes...) and

import turnover also increased from 85.8 million USD in 2000 to 95.6 million USD in 2002.

25
Although the number of projects is still small and small-scale, it is worth noting that American

businesses have invested in areas where Vietnamese agriculture is still difficult such as: animal

feed production, seed production. corn, coffee processing, fruit and vegetable production,

wooden furniture production... Therefore, these projects have contributed significantly to

modernizing technology, equipment and accessing large markets for agriculture and rural areas.

Vietnamese products. In recent times, trade cooperation has been the most important area that

has been demonstrated most clearly. Especially since the Agreement took effect, incentives on

taxes, fees, regulations, procedures, payment methods, non-tariff measures... have strongly

promoted two-way trade transactions. In which, the export direction from Vietnam is higher

than the opposite direction.

On the contrary, Vietnam's agricultural sector encountered many difficulties after joining the

WTO. Agricultural production value growth occurs at a rate of 5% to 6%/year, decreasing to

3.5% in 2009, then increasing to 4.7% in 2010; The industry's GDP growth is lower and also

erratic, from 3% to 4%. As for the livestock industry, the proportion of livestock in agricultural

production value only increased from 24.5% (2006) to 30% (2009) - a rather weak growth rate.

For agricultural services, the impact of joining the WTO on this activity is insignificant and this

activity itself is very small in scale, not taking advantage of the advantages from joining the

WTO. The growth rate of export value in the 5 years before joining the WTO was 18.4%, higher

than the 5 years after joining the WTO, which was only 15.6%.

The change in agricultural growth rate over the past 4 years shows that, after joining the WTO,

the agricultural sector in general has erratic increases and decreases in conditions where

domestic changes according to WTO commitments are not very strong. The reason for this.

❖ Vietnam's textile

26
In May 2003, the United States and Vietnam signed a Textile and Apparel Agreement, which

fixed quotas on 35 types of garments and placed limits on those types of garments in total

exports. to the United States was 1.7 billion USD in 2003.

According to BTA, Vietnam enjoys preferential access to the US textile market. This means

lower tariffs and easier entry into the US market for Vietnamese textile and garment products.

Before the BTA, Vietnam's access to the US market was quite limited as Vietnam faced general

US tariffs (simple average of about 35%) that were much higher than most favored nation

tariffs. (MFN) of the United States is about 4.9 % (Fukase & Martin, 2000). Thanks to that,

Vietnam's textile and garment exports to the US skyrocketed. Starting from a very low level,

the United States absorbed 38.3% of Vietnam's textile exports, 56.9% of apparel, 16.6% of

footwear/leather in 2004 (Trade System United Nations). Vietnamese textile and garment

manufacturers have been able to gradually adapt to the requirements and standards of the US

market, benefiting from the phased implementation of the agreement. This leads to increased

investment in the textile sector and job creation, leading to overall growth of the industry.

(Fukase, 2013)

Until 2023, the largest market for Vietnam's textile and garment industry was still the US

market. In the first nine months of the year, garment products exported to the US market reached

over 11 billion USD (vcci.vn, 2023).

However, when joining the WTO, Vietnam's textile and garment industry is under great

pressure to comply with international regulations and commitments: (1) although quotas on

entering the US market are removed, Vietnam must subject to the US Textile Supervision

Mechanism and the risk of the US side initiating its own anti-dumping investigation; (2)

according to WTO commitments, Vietnam must terminate the effectiveness of Decision

55/2001/QD-Ttg on a number of support mechanisms for the textile and garment industry; (3)

WTO agreements and regulations in general are still very complicated for Vietnamese textile

27
and garment enterprises; Businesses are also under pressure from many technical barriers: CSR,

SA 8000, Reach waste treatment, TBT, etc.

At the same time, the openness of the economy after joining the WTO also caused Vietnam's

textile and garment industry to be heavily affected by the world economic recession, with orders

and prices falling sharply. Rising raw material prices, minimum wage, and cost of living create

pressure for businesses to increase production costs. Labor advantages are no longer the

dominant advantage of Vietnam's textile and garment industry in the context of fierce

international competition. Competitive pressure has put Vietnamese textile and garment

enterprises at risk of falling behind in both the international and domestic markets by revealing

a series of weaknesses in the weaving-dyeing-finishing stage, design capacity, human resource

training, and the ability to grasp and meet international regulations in the WTO and FTAs,

especially rules of origin for textiles and garments.

4. Recommendation

❖ For Businesses:

- When exporting to the United States, businesses need to define product strategies,

partners, and distribution channels clearly.

- Thoroughly research regulations, export barriers, and possibilities related to trade

defense cases, ensuring input materials have clear origins, do not affect the environment

or use forced labor. At the same time, gradually research and upgrade production

facilities and factories according to green production standards.

- Actively participate in trade promotion programs, exhibitions, connect with relevant

agencies, create reputation and build trust with US customers.

- Applying advanced technology in selecting and cross-breeding indigenous livestock

breeds with imported breeds, ensuring the creation of cattle and poultry herds with high

productivity and meat quality.

28
 ❖ For Government:

- Connecting domestic businesses with each other and with foreign invested businesses

to form supply chains and expand export markets.

- Coordinate with reputable international organizations to implement business support

programs on governance, green transformation, new technology, design, branding...

- Implement trade promotion programs at home and abroad to create opportunities for

Vietnamese businesses to exchange and promote their images; Timely transmit

information about the industry, economy and society in the country and the world to

members.

III. Conclusion

In summary, the more immediate and tailored benefits of the bilateral agreement with the US,

along with a phased implementation and specific market access, likely contributed to the initial

success seen after the BTA. In contrast, WTO accession includes broader and more immediate

integration into a complex multilateral system, coinciding with global economic challenges,

which might have impacted Vietnam negatively in the short term despite potential long-term

benefits.

Continue to implement commitments to reduce import taxes on schedule along with

implementing measures to help agricultural producers prevent risks. Accordingly, it is

necessary to take measures to prevent negative impacts when new import tax rates are applied

as committed.

29
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32
Individual Contribution

STT Name ID Tasks Level of

Number contribution

1 Lê Thị Yến Ninh 20070295 Part 1: Trade Situation Analysis 100%

2. Main body
2.1 Country’s Trade Composition
2.1.1 Trade Structure by Industry
2.1.2 Trade Structure By Partners
Part 2: International Trade Policy
Analysis
2. Reason (II. The benefit from BTA)
Edit Report

2 Nguyễn Thị Thúy Huyền 20070202 Part 1: Trade Situation Analysis 100%
1. Overview of Germany‘s
international trade situation in 2022
1.1 Import and Export Situation of
Germany in 2022
1.2 Major Import and Export Market
1.3 Major Import and Export Product
3. Conclusion

3 Lê Thị Vân Anh 20070081 Part 1: Trade Situation Analysis 100%

2.2 Country’s Major Trading Partners
(Use Trade Theories, Gravity model,
Trade Integration) Including Export
and Import
2.2.1 Comparative advantage
2.2.2 Bilateral trade relations and
factors that determine those relations

4 Tiêu Thị Nguyệt Hà 20070157 Part 2: International Trade Policy 100%

Analysis
Executive summary
I. General information of Vietnam -
US BTA and Vietnam’s WTO
Accession
II. The benefit from the BTA (NOT
from WTO accession)
1. Benefit

5 Vũ Đăng Duy 20070133 Part 2: International Trade Policy 100%

Analysis
Introduction
II. The benefit from the BTA (NOT
from WTO accession)
3. Example
4. Solution

33
STT Name ID Tasks Level of
Number contribution

6 Phạm Khánh Phương 20070306 Part 2: International Trade Policy 100%

Analysis
II. The benefit from the BTA (NOT
from WTO accession)
3. Example
4. Solution
III. Conclusion

34