FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS



International Economics – Semester 2 (2024-2025)

Assessment Task 1 – Group Assignment
Academic Instructor: Trinh Cong Tam
Class: K62MF
Word count: 8132

Ho Chi Minh, March 2025

 ASSIGNMENT COVER SHEET
Full name Student ID Contact Contribution

Vi Đăng Khoa 2312953015 100%

Nguyễn Thị Quỳnh 2312953026 100%

Như

Phạm Thành Phú 2312953027 100%

Trần Sanh Thiên 2312953028 100%

Phú

Lâm Hiểu Phương 2312953029 100%

Trương Ngọc Ý 2312950042 100%

Nguyễn Nhật Huy 2312950059 100%

Trần Gia Huy 2312950058 100%

Due date: Sunday 9th March 2025, by 11:59 PM

Assignment topic: International Trade in Vietnam and its determinants.

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Student signatures
Contents
I. Introduction ............................................................................................................................... 5
1.Purpose ........................................................................................................................................ 5
2.Report structure.......................................................................................................................... 5
3.Overview of International Trade in Vietnam .......................................................................... 5
4. Overall ........................................................................................................................................ 6
II.Vietnam’s International Trade: Data Analyst....................................................6
Trade Balance Trends ................................................................................................................... 6
EXPORT OVERALL TABLE ..................................................................................................... 9
IMPORT OVERALL TABLE.................................................................................................... 16
IMPORT OF PRODUCT GROUP TABLE.............................................................................. 22
EXPORT OF PRODUCT GROUP TABLE ............................................................................. 26
III. The Role of International Trade in Vietnam’s Socio-Economic
Development............................................................................................................. 31
1. Contribution to Economic Growth ........................................................................................ 31
2. Exchange Rate and Trade Competitiveness .......................................................................... 32
3. Social and Environmental Considerations ............................................................................ 33
IV. Current Policies Regarding Foreign Trade ................................................... 34
1.Overview of Vietnam's Foreign Trade Policies...................................................................... 34
2.Main Trade Agreements .......................................................................................................... 34
3.CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) ..... 35
V. Determinants of International Trade in Vietnam ........................................... 37
Determinants of International Trade in Vietnam ..................................................................... 37
1. Exchange Rate .......................................................................................................................... 38
2. Income ....................................................................................................................................... 40
3. Government Policies ................................................................................................................ 41
VI.Conclusion and Recommendations .................................................................. 44
1.Summary of Key Findings ....................................................................................................... 44
2.Important Factors and Strategies for Advancing Vietnam's Trade .................................... 45
VII.REFERENCES ................................................................................................. 49
I. Introduction

1.Purpose
Vietnam’s economic activities are analyzed in this report through indicators such as trade
balance and GDP. Factors such as socio-economic factors and current trade policies,Socio-
economic factors will be analyzed in the report, including cultural distance and its impact on
Vietnam trade. Furthermore, the good and bad sides that international trade brings to
Vietnam. At the end, there will be an analysis of the important factors affecting Vietnam's
trade.

2.Report structure
This report is organized in the following manner: Section 1 Vietnam’s International Trade:
Data Analyst supported by statistical data, figures, and tables, Section2 The Role of
International Trade in Vietnam’s Socio-Economic Development , Section3 Current Policies
Regarding Foreign Trade , Section4 Determinants of International Trade in Vietnam ,
Section5 Important factors and strategies for advancing Vietnam's trade.

3.Overview of International Trade in Vietnam

3.1. Economic
Vietnam's economy in 2024 remained robust and recorded a high growth rate of 7.09% GDP
growth despite uncertainty at domestic and international levels. Its per capita GDP increased
by $377 to approximately $4,700. The growth was led by the services sector with 49.46%
contribution to economic growth, followed by industry and construction with 45.17%, and
agriculture, forestry, and fisheries with 5.37%. The nation's GDP at current prices was
estimated to be $476.3 billion.[1]

3.2. Trade
Trade performance remained strong, with 14.3% growth in exports, aided by recovering
demand in major markets such as the U.S., EU, and ASEAN. Trade volume was close to
$800 billion, with a trade surplus of close to $25 billion for nine consecutive years. Foreign
direct investment (FDI) was strong, with close to $40 billion in registered capital. Above all,
behemoth tech giants like NVIDIA and Google invested in Vietnam, which said a lot about
Vietnam's attractiveness as an investment destination. Actual FDI disbursement was $25.35
billion, rising 9.4% compared to last year.[2]

3.3. Priorities, Indicators and Challenges

The target of the Vietnamese government on its 2025 henceforth horizon is to achieve 7-
7.5%, and some argue even higher i.e. at or above 8% of GDP growth. With regard to these
goals the main actions to be taken are more investment instate and private sectors;more
diversified its export models;take advantage of the global relocation of supply chains. It also
specifies the digitalization, green growth and administrative streamlining goal from an
improved economic competitiveness perspective. Meanwhile, though, important geopolitical
risks; trade protectionism and the fragmentation global economy require adaptive and
proactive policy responses to keep g-heavy economic growth.[3]

4. Overall
The Vietnamese economy was able to bounce back impressively, growing by 7.09% GDP in
2024 notwithstanding both global and domestic issues. Delivered key contributors: robust
performance from the services sector, increasing foreign investment and a massive export
increase hitting a new record trade surplus. GDP per capita hit $4,700 and FDI went as high
as $40 billion, boosting Vietnam's credentials as an attractive place in which to invest largest
on the FAO Trade Map. In 2025 they are shooting even higher growth, investment, exports,
digital transformation and green development focused by the Government. Looking aside
these challenges of geopolitical instabilities and trade protectionism, the world is looking at
Vietnam for long run growth with proactive policy oriented economic reforms behind its
back.

II.Vietnam’s International Trade: Data Analyst

Trade Balance Trends

Source: World Bank.[4]

The chart reveals a very significant growth tendency for Vietnam's import and export
turnover between 2000 and 2023. This indicates both the growth of indigenous industry and
Vietnam's profound trade relationship with the balance of the world. The Vietnam-US
Bilateral Trade Agreement (BTA) in 2000, which launched the market, attracted foreign
investment, and encouraged exports, as well as the Vietnamese government's ongoing efforts
to expand trade in general turnover—including joining the World Trade Organization (WTO)
in 2007—were contributing factors in the country's robust growth.

However, from 2008 to 2009, this figure decreased significantly due to the impact of the
global financial crisis in 2008, global consumer demand decreased, affecting Vietnam's
exports, negatively affecting both global and domestic trade activities. global and domestic
trade activities. Vietnam kept growing its export markets and industries after 2010, when the
world economy rebounded and increased steadily. During 2020–2021, the COVID-19
pandemic caused supply chain disruptions, decreased consumer demand, and restricted trade.
Even though the economy bounced back and expanded in 2022–2023, there were still a lot of
obstacles to overcome, like the Vietnamese government's import-export promotion policies
and the Russia–Ukraine conflict that affected the world supply chain.[5]

Year Import (US billion) Export (US billion) Trade balance % GDP

2000 15.637 14.483 -2.92%

2001 16.217 15.029 -2.88%

2002 19.746 16.706 -6.82%

2003 25.256 20.150 -10.16%

2004 31.969 26.485 -8.72%

2005 36.761 32.448 -5.90%

2006 44.892 39.827 -6.15%

2007 62.765 48.561 -14.35%

2008 80.714 62.685 -14.45%

2009 69.949 57.097 -9.95%

2010 84.839 72.237 -8.81%

2011 106.750 96.906 -5.75%

2012 113.781 114.530 0.38%

2013 132.032 132.033 0%

2014 147.840 150.218 1.02%

2015 165.776 162.017 -1.50%

2016 174.978 176.581 0.70%

2017 213.216 215.119 0.76%

2018 236.869 243.699 2.25%

2019 253.443 264.611 3.28%

2020 261.310 281.442 5.75%

2021 330.753 335.793 0.95%

2022 358.789 370.910 2.98%

2023 325.776 353.781 6.46%

(Table: Vietnam’s trade from 2000-2023)

 EXPORT OVERALL TABLE
The Vietnam trade balance fluctuated significantly between 2000 and 2023. The analytical
chart shows that Vietnam often suffered from a trade deficit in the early years of the 20th
century, which was a result of the country's need to import raw materials, machinery, and
equipment for the industrialization process. Although joining the World Trade Organization
(WTO, 2007) and the Vietnam-US Trade Agreement (2000) stimulated import and export
activity, they also deteriorated the trade deficit. Vietnam's exports declined during the 2008–
2009 global economic crisis as a result of a decline in worldwide consumer and investment
demand. Due to shifts in the country's economic structure and the effects of free trade
agreements, Vietnam's trade balance declined greatly between 2010 and 2019, alternating
between years of trade surplus and deficit. Vietnam's export markets have grown thanks to
the signing of free trade agreements (FTAs), while imports have climbed as a result of
increased competition. Specifically, the COVID-19 pandemic in 2020 created significant
disruptions, hurting import and export activities and upsetting supply lines, which resulted in
a temporary drop in the trade balance. However, Vietnam's ability to contain the pandemic
and increase exports of necessities allowed it to recover swiftly and record a trade surplus in
the years that followed.

Year Market Value exported Partner share (%)

2000 Japan 2,575 17.78%

China 1,536 10.61%

 Australia 1,272 8.79%

Singapore 886 6.12%

Others 757 5.22%

2001 Japan 2,510 16.70%

China 1,417 9.43%

US 1,066 7.09%

Singapore 1,044 6.94%

Australia 1,042 6.93%

2002 US 2,453 14.68%

Japan 2,437 14.59%

China 1,518 9.09%

Australia 1,328 7.95%

Singapore 961 5.75%

2003 US 3,940 19.55%

Japan 2,909 14.44%

China 1,883 9.35%

Australia 1,421 7.05%

Singapore 1,025 5.09%

2004 US 5,027 18.98%

Japan 3,542 13.37%

China 2,899 10.95%

 Australia 1,885 7.12%

Singapore 1,485 5.61%

2005 US 5,927 18.27%

Japan 4,340 13.38%

China 3,246 10.01%

Australia 2,723 8.39%

Singapore 1,917 5.91%

2006 US 7,850 19.71%

Japan 5,240 13.16%

Australia 3,689 9.26%

China 3,243 8.14%

Singapore 1,659 4.17%

2007 US 10,111 20.82%

Japan 6,090 12.54%

Australia 3,802 7.83%

China 2,234 7.51%

Singapore 4.60%

2008 US 11,903 18.99%

Japan 8,468 13.51%

China 4,850 7.74%

Australia 4,352 6.94%

 Singapore 2,714 4.33%

2009 US 11,416 19.99%

Japan 6,336 11.10%

China 5,403 9.46%

Switzerland 2,500 4.38%

Australia 2,386 4.18%

2010 US 14,251 19.73%

China 7,743 10.72%

Japan 7,728 107.00%

Korea 3,092 4.28%

Australia 2,704 3.74%

2011 US 16,970 17.51%

China 11,613 11.98%

Japan 11,092 11.45%

Korea 4,867 5.02%

Germany 3,367 3.47%

2012 US 19,681 17.18%

China 13,065 11.41%

Japan 12,836 11.21%

Korea 5,581 4.87%

Malaysia 4,500 3.93%

2013 US 23,870 18.08%

Japan 13,544 10.26%

China 13,178 9.98%

Korea 6,683 5.06%

Malaysia 4,984 3.78%

2014 US 28,650 19.07%

China 14,928 9.94%

Japan 14,675 9.77%

Korea 7,167 4.77%

Hongkong 5,265 3.50%

2015 US 33,475 20.66%

China 16,568 10.23%

Japan 14,100 8.70%

Korea 8,915 5.50%

Hongkong 6,959 4.30%

2016 US 38,473 21.79%

China 21,950 12.43%

Japan 14,671 8.31%

Korea 11,406 6.46%

Hongkong 6,088 3.45%

2017 US 41,550 19.31%

 China 35,394 16.45%

Japan 16,792 7.81%

Korea 14,807 6.88%

Hongkong 7,574 3.52%

2018 US 47,580 19.52%

China 41,366 16.97%

Japan 18,834 7.73%

Korea 18,241 7.48%

Hongkong 7,958 3.27%

2019 US 61,404 23.21%

China 41,434 15.66%

Japan 20,427 7.72%

Korea 19,729 7.46%

Hongkong 7,162 2.71%

2020 US 77,072 27.38%

China 48,880 17.37%

Japan 19,269 6.85%

Korea 19,125 6.80%

Hongkong 10,436 3.71%

2021 US 96,328 28.69%

China 55,923 16.65%

 Korea 21,934 6.53%

Japan 20,118 5.99%

Hongkong 11,985 3.57%

2022 US 109,460 29.51%

China 57,678 15.55%

Korea 24,265 6.54%

Japan 24,228 6.53%

Hongkong 10,936 2.95%

2023 US 109,460 29.51%

China 57,678 15.55%

Korea 24,265 6.54%

Japan 24,228 6.53%

Hongkong 10,936 2.95%

(Table: Vietnam’s overall export from 2000-2023)

 IMPORT OVERALL TABLE

Year Market Value exported Partner share (%)

2000 Singapore 2,694 17.23%

Japan 2,301 14.72%

Others 1,880 12.02%

Korea 1,754 11.21%

China 1,401 8.96%

2001 Singapore 2,478 15.28

Japan 2,183 13.46

Others 2,009 12.39

Korea 1,887 11.63

China 1,606 9.90%

2002 Singapore 2,533 12.83

Others 2,525 12.79

Japan 2,505 12.68

Korea 2,280 11.54

China 2,159 10.93%

2003 China 3,139 12.43%

Japan 2,982 11.81%

 Others 2,916 11.54%

Singapore 2,876 11.39%

Korea 2,625 10.40%

2004 China 4,595 14.37%

Others 3,698 11.57%

Singapore 3,618 11.32%

Japan 3,553 11.11%

Korea 3,359 10.51%

2005 China 5,900 16.05%

Singapore 4,482 12.19%

Others 4,304 11.71%

Japan 4,074 11.08%

Korea 3,594 9.78%

2006 China 7,391 16.47%

Singapore 6,274 13.98%

Others 4,825 10.75%

Japan 4,702 10.47%

Korea 3,908 8.71%

2007 China 12,710 20.25%

Singapore 7,614 12.13%

Others 6,947 11.07%

 Japan 6,189 9.86%

Korea 5,340 8.51%

2008 China 15,974 19.79%

Singapore 9,378 11.62%

Others 8,363 1.36%

Japan 8,240 10.21%

Korea 7,255 8.99%

2009 China 16,673 23.84%

Japan 7,468 10.68%

Korea 6,976 9.97%

Others 6,253 8.94%

Thailand 4,513 6.45%

2010 China 20,204 23.81%

Korea 9,758 11.50%

Japan 9,016 10.63%

Others 6,977 8.22%

Thailand 5,602 6.60%

2011 China 24,866 23.29%

Korea 13,176 12.34%

Japan 10,401 9.74%

Others 8,557 8.02%

 Singapore 6,391 5.99%

2012 China 29,035 25.52%

Korea 15,535 13.65%

Japan 11,602 10.20%

Others 8,534 7.50%

Singapore 6,691 5.88%

2013 China 36,886 27.94%

Korea 20,678 15.66%

Japan 11,558 8.75%

Others 9,402 7.12%

Thailand 6,283 4.76%

2014 China 43,648 29.52%

Korea 21,728 14.70%

Japan 12,857 8.70%

Others 11,064 7.48%

Thailand 7,053 4.77%

2015 China 49,441 29.82%

Korea 27,579 16.64%

Japan 14,182 8.55%

Others 10,943 6.60%

Thailand 8,270 4.99%

2016 China 50,038 28.60%

Korea 32,193 18.40%

Japan 15,098 8.63%

Others 11,242 6.42%

Thailand 8,855 5.06%

2017 China 58,533 27.45%

Korea 46,943 22.02%

Japan 16,917 7.93%

Others 12,710 5.96%

Thailand 10,702 5.02%

2018 China 65,516 27.66%

Korea 47,582 20.09%

Japan 19,041 8.04%

Others 13,231 5.59%

US 12,756 5.39%

2019 China 75,586 29.82%

Korea 46,942 18.52%

Japan 19,533 7.71%

Others 15,181 5.99%

US 14,377 5.67%

2020 China 84,198 32.22%

 Korea 46,862 17.93%

Japan 20,277 7.76%

Others 16,704 6.39%

US 13,764 5.27%

2021 China 109,851 33.21%

Korea 56,112 16.97%

Japan 22,602 6.83%

Others 20,758 6.28%

US 15,179 4.59%

2022 China 117,651 32.79%

Korea 62,051 17.29%

Japan 23,312 6.50%

Others 22,615 6.30%

US 14,477 4.04%

2023 China 117,651 32.79%

Korea 62,051 17.29%

Japan 23,312 6.50%

Others 22,615 6.40%

US 14,477 4.04%
 IMPORT OF PRODUCT GROUP TABLE

Year Product category Import Product share (%)

Raw materials 642 4.11%

Intermediate goods 5,894 37.70%

Consumer goods 4,133 26.43%

2000 Capital goods 4,458 28.51%

Raw materials 684 4.22%

Intermediate goods 6,563 40.47%

Consumer goods 3,672 22.64%

2001 Capital goods 4,510 27.81%

Raw materials 933 4.72

Intermediate goods 8,445 42.77%

Consumer goods 4,222 21.38

2002 Capital goods 5,243 26.55%

Raw materials 1,067 4.23%

Intermediate goods 10,786 42.71%

Consumer goods 5,449 21.57%

2003 Capital goods 6,987 27.66%

Raw materials 1,485 4.64%

Intermediate goods 14,574 45.59%

Consumer goods 7,814 24.44%

2004 Capital goods 7,951 24.87%

 Raw materials 1,777 4.83%

Intermediate goods 16,787 45.67%

Consumer goods 9,622 26.17%

2005 Capital goods 8,433 22.94%

Raw materials 2,239 4.99%

Intermediate goods 20,559 45.80%

Consumer goods 11,456 25.52%

2006 Capital goods 10,450 23.28%

Raw materials 3,037 4.84%

Intermediate goods 27,193 43.33%

Consumer goods 14,945 23.81%

2007 Capital goods 17,350 27.64%

Raw materials 4,488 5.26%

Intermediate goods 33,917 3.98%

Consumer goods 20,140 7.79%

2008 Capital goods 211,775 4.24%

Raw materials 4,232 6.05%

Intermediate goods 28,573 40.85%

Consumer goods 15,739 22.50%

2009 Capital goods 21,155 30.24%

Raw materials 6,084 7.17%

Intermediate goods 36,673 43.23%

Consumer goods 17,946 21.15%

2010 Capital goods 23,847 28.11%

2011 Raw materials 8,560 8.02%
 Intermediate goods 43,821 41.05%

Consumer goods 23,918 22.41%

Capital goods 30,103 28.20%

Raw materials 9,108 8.00%

Intermediate goods 42,185 37.08%

Consumer goods 24,028 21.12%

2012 Capital goods 38,108 33.49%

Raw materials 10,507 7.96%

Intermediate goods 48,539 36.76%

Consumer goods 23,926 18.12%

2013 Capital goods 48,403 36.66%

Raw materials 11,865 8.03%

Intermediate goods 54,772 37.05%

Consumer goods 26,397 17.85%

2014 Capital goods 54,064 36.57%

Raw materials 12,612 7.61%

Intermediate goods 56,750 34.23%

Consumer goods 26,383 15.92%

2015 Capital goods 69,264 41.78%

Raw materials 14,536 8.31%

Intermediate goods 57,961 33.12%

Consumer goods 28,432 16.25%

2016 Capital goods 73,843 42.20%

Raw materials 19,007 8.91%

2017 Intermediate goods 67,023 31.43%

 Consumer goods 33,523 15.72%

Capital goods 93,372 43.79%

Raw materials 24,268 10.25%

Intermediate goods 75,835 32.02%

Consumer goods 37,416 15.80%

2018 Capital goods 96,089 40.57%

Raw materials 26,300 10.38%

Intermediate goods 76,103 30.03%

Consumer goods 39,695 15.66%

2019 Capital goods 107,742 42.51%

Raw materials 27,053 10.35%

Intermediate goods 71,589 27.40%

Consumer goods 38,757 14.83%

2020 Capital goods 121,770 46.60%

Raw materials 39,038 11.80%

Intermediate goods 93,455 28.26%

Consumer goods 46,212 13.97%

2021 Capital goods 147,564 44.61%

Raw materials 44,157 12.31%

Intermediate goods 100,340 27.97%

Consumer goods 55,711 15.53%

2022 Capital goods 152,200 42.42%

Raw materials 44,157 12.31%

Intermediate goods 100,340 27.97%

2023 Consumer goods 55,711 15.53%

 Capital goods 152,200 42.42%

EXPORT OF PRODUCT GROUP TABLE

Year Product category Export Product share (%)

Raw materials 5,955 41.12%

Intermediate goods 1,028 7.10%

Consumer goods 6,028 41.62%

2000 Capital goods 1,007 6.95%

Raw materials 5,787 38.51%

Intermediate goods 1,259 8.38%

Consumer goods 6,616 44.02%

2001 Capital goods 938 6.24%

Raw materials 6,242 37.37%

Intermediate goods 1,297 7.76%

Consumer goods 8,072 4832.00%

2002 Capital goods 884 5.29%

Raw materials 7,183 35.65%

Intermediate goods 1,616 8.02%

Consumer goods 9,916 49.21%

2003 Capital goods 1,220 6.06%

Raw materials 9,911 37.42%

2004 Intermediate goods 1,896 7.16%

 Consumer goods 12,730 48.06%

Capital goods 1,830 6.91%

Raw materials 12,641 38.86%

Intermediate goods 2,345 7.23%

Consumer goods 14,954 46.09%

2005 Capital goods 2,368 7.30%

Raw materials 15,301 38.42%

Intermediate goods 3,425 8.60%

Consumer goods 17,643 44.30%

2006 Capital goods 3,308 8.31%

Raw materials 17,319 35.66%

Intermediate goods 4,455 9.17%

Consumer goods 22,043 45.39%

2007 Capital goods 4,402 9.07%

Raw materials 21,000 33.50%

Intermediate goods 7,330 11.69%

Consumer goods 27,969 44.62%

2008 Capital goods 5,959 9.51%

Raw materials 15,657 27.42%

Intermediate goods 6,817 11.93%

Consumer goods 28,210 49.41%

2009 Capital goods 6,047 10.59%

2010 Raw materials 16.83 23.30%

 Intermediate goods 9,288 12.86%

Consumer goods 36,128 50.01%

Capital goods 9,565 13.24%

Raw materials 22,756 23.48%

Intermediate goods 12,720 13.13%

Consumer goods 44,430 45.85%

2011 Capital goods 16,437 16.96%

Raw materials 24,229 21.16%

Intermediate goods 15,818 13.81%

Consumer goods 46,531 40.63%

2012 Capital goods 27,581 24.08%

Raw materials 22,530 17.06%

Intermediate goods 16,978 12.86%

Consumer goods 52,462 39.73%

2013 Capital goods 39,535 29.94%

Raw materials 23,742 15.81%

Intermediate goods 19,769 13.16%

Consumer goods 61,518 40.95%

2014 Capital goods 44,637 29.71%

Raw materials 18,108 11.18%

Intermediate goods 20,798 12.84%

Consumer goods 66,258 40.90%

2015 Capital goods 56,234 34.71%

 Raw materials 18,716 10.60%

Intermediate goods 21,778 12.33%

Consumer goods 70,751 40.07%

2016 Capital goods 65,090 28.86%

Raw materials 22,044 10.25%

Intermediate goods 27,238 12.66%

Consumer goods 79,168 36.80%

2017 Capital goods 86,381 40.16%

Raw materials 21,350 8.76%

Intermediate goods 32,893 13.50%

Consumer goods 87,791 36.02%

2018 Capital goods 97,780 4.12%

Raw materials 20,125 7.61%

Intermediate goods 33,652 12.72%

Consumer goods 99,338 37.54%

2019 Capital goods 107,023 40.45%

Raw materials 18,034 6.41%

Intermediate goods 33,909 12.05%

Consumer goods 103,345 36.72%

2020 Capital goods 123,265 43.80%

Raw materials 20,550 6.12%

Intermediate goods 49,912 14.86%

2021 Consumer goods 112,802 33.59%

 Capital goods 147,613 43.96%

Raw materials 23,565 6.53%

Intermediate goods 49,358 13.31%

Consumer goods 130,395 35.16%

2022 Capital goods 161,880 43.64%

Raw materials 23,565 6.35%

Intermediate goods 49,358 13.31%

Consumer goods 130,395 35.16%

2023 Capital goods 161,880 43.64%

(Chart: Vietnam’s export by product group)

The figure "Vietnam's export by product group" demonstrates a significant movement in
Vietnam's export structure from 2000 to 2023. Exports of raw materials predominated in the
beginning but progressively decreased as Vietnam's industrialization developed. On the other
hand, the percentage of consumer products kept increasing, particularly after 2010,
demonstrating the robust growth of the export-oriented processing and manufacturing sector.
Consumer goods exports increased dramatically, particularly between 2020 and 2023.
Foreign direct investment (FDI), free trade agreements (FTAs), a large labor pool, and
government policies that encouraged it all contributed to this shift. Vietnam's consumer
goods exports may have benefited from a change in investment by global corporations,
specifically as a result of the COVID-19 epidemic. However, to achieve sustainable growth,
Vietnam must keep diversifying its markets and raising the added value of its exports.

(Chart: Vietnam’s import by product group)

The graphic "Vietnam's imports by product group" illustrates the changes in Vietnam's import
structure from 2000 to 2023. Imports of capital goods increased significantly during the first
stage, which was indicative of the process of industrialization and modernization. 2009 saw a
particularly high rise, which may have been brought on by the stimulus plan implemented
following the 2008 financial crisis. Imports of capital goods have been steady since 2010, but
imports of intermediate products have grown, indicating the growth of the export sector. Free
trade agreements (FTAs), foreign direct investment (FDI), and the necessity of producing
export commodities are the main drivers of this shift. However, imports are affected as well
by outside variables like pandemics and economic crises. Sustainable development requires
the maintenance of a fair import framework.

III. The Role of International Trade in Vietnam’s Socio-

Economic Development

1. Contribution to Economic Growth

International trade has been a fundamental driver of Vietnam’s economic expansion,

significantly contributing to GDP growth through manufacturing, processing, and agricultural
exports. In 2024, Vietnam’s total trade turnover reached $786.29 billion, demonstrating the
country’s deep integration into global markets and its resilience amid economic uncertainties
[6]
. With exports continuing to thrive, Vietnam maintains a steady growth trajectory,
leveraging its strong industrial base and competitive advantages in various sectors.
A key factor behind this trade-driven growth is Vietnam’s active participation in free trade
agreements (FTAs). Over the past decade, Vietnam has signed and implemented multiple
FTAs, including RCEP, EVFTA, and CPTPP, which have significantly expanded export
markets and reduced trade barriers.These agreements have enabled Vietnam to access larger
markets, such as the US, EU, and Japan, boosting exports of key products like textiles,
footwear, and agricultural goods. [7]

In addition to increasing exports, FTAs allow Vietnam to import advanced technology and
modern machinery, enhancing productivity and enabling the country to move up the global
value chain.

Vietnam’s consistent trade surplus further underscores its strong export performance. In
2024, the country recorded a trade surplus of $50.29 billion, marking nine consecutive years
of surplus and reinforcing its position as a reliable global supplier. [6]

This sustained surplus indicates that Vietnam’s export markets are expanding and
strengthening, ensuring a stable inflow of foreign exchange and economic stability. As a
result, international trade continues to fuel GDP growth, support domestic industries, and
create employment opportunities across various sectors.

2. Exchange Rate and Trade Competitiveness

Vietnam’s exchange rate policy plays a critical role in shaping the country’s trade dynamics,
significantly influencing both export and import activities. A competitive exchange rate
makes Vietnamese goods more affordable in international markets, increasing demand for
exports. With an average income per capita of VND 8.2 million per month in Q4 2024,
Vietnam benefits from a relatively low-cost labor force, making its manufacturing and
agricultural products highly competitive globally.[6]

This cost advantage allows Vietnam to strengthen its position in key export markets,
particularly in the US, EU, and China, where demand for affordable and high-quality goods
remains strong.

However, managing the exchange rate presents numerous challenges in an increasingly

volatile global economy. Fluctuations in global financial markets, rising interest rates in
developed countries, and competitive pressures from regional economies have placed
significant pressure on Vietnam’s exchange rate policy. At the same time, domestic factors
such as trade deficits, high demand for foreign currency, and shifting market sentiment add
further complexity to exchange rate management. Given these challenges, ensuring a
balanced and stable exchange rate is crucial for maintaining Vietnam’s export
competitiveness while preventing inflationary pressures on imports.[8]

The State Bank of Vietnam (SBV) plays a vital role in maintaining exchange rate stability
through monetary policy interventions and foreign exchange market adjustments. In recent
years, the SBV has adopted a more flexible exchange rate mechanism, allowing the
Vietnamese đồng (VND) to adjust gradually according to market conditions. This approach
has helped Vietnam mitigate external shocks, such as global economic downturns and trade
tensions, while ensuring that businesses can plan long-term trade strategies with greater
confidence. [8]

3. Social and Environmental Considerations

3.1. Job Creation and Income Growth

Vietnam's entry into the global economy resulted in significant job creation and income
development. The country's per capita GDP climbed from $2,300 in 2015 to $4,086 in 2022,
with the goal of reaching at least $18,000 by 2035. Vietnam's rapid economic growth has
been largely fueled by its international trade. Trade became a vital growth driver when the
nation opened its markets after economic reforms. Vietnam's economy has grown
significantly. The population's economic prosperity and national income levels have
increased as a result of this growth.[9]

This economic expansion has been accompanied by significant poverty reduction, with the
poverty rate declining from about 60% in the early 1990s to 14% in 2014, pulling
approximately 40 million people out of poverty. Millions of jobs, especially for low-skilled
workers, have been created as a result of the expansion of industries like electronics,
footwear, and textiles, which have been fueled by demand from international markets. Both
urban and rural communities now have job prospects because of the creation of industrial
parks and export processing zones (EPZs).[10]

3.2.Environmental Impact of Trade

3.2.1. Pollution and Industrial Waste

Vietnam's rapid growth led to environmental difficulties, such as pollution and industrial
waste. The country is one of the world's five most vulnerable to climate change, experiencing
typhoons, floods, droughts, and landslides. Industrial operations have led to air and water
pollution, affecting both public health and the environment.[11]

3.2.2. Deforestation and Resource Depletion

Deforestation is a major environmental issue in Vietnam, owing to increased agricultural

activity and economic projects[12]. This has caused soil erosion, loss of biodiversity, and
higher CO₂ emissions. The increase in wood product exports has also contributed to
deforestation, as forests are removed to suit global demand.[13]
IV. Current Policies Regarding Foreign Trade

1.Overview of Vietnam's Foreign Trade Policies

Vietnam has developed the foreign trade environment by embracing numerous policies. The
main objectives of these policies are to aid in integrating Vietnam into the global economy,
boost exports, and invite foreign trade investment (FDI). The current government has
prioritized improving competitiveness, lessening trade barriers, and establishing a good
commercial environment.

2.Main Trade Agreements

2.1.EVFTA (EU-Vietnam Free Trade Agreement)

The European Union and Vietnam have agreed to a comprehensive trade agreement called the
EVFTA, and these entered into effect in August 2020. Its role is to enable business in goods
and services and remove barriers. By removing tariffs on a diverse array of products, such as
clothing, textiles, fruits, and vegetables, the agreement has given Vietnamese exporters
privileged entry to the EU market. Vietnam is becoming increasingly competitive in the EU
market because of this.[14]

2.2.Import and Export Industry

Vietnam has benefited greatly from the agreement because import duties have disappeared for
most of its export revenue in a short period of time. That is why Vietnam's exports to the EU
have increased by 16.7% from 2021 to 46.8 billion USD in 2022[15]. The country's main exports
include agricultural products, wood and wood products, clothing and textiles, footwear,
seafood, iron and steel, as well as computers, electronic components, and appliances. On the
other hand, the EU eliminated import duties on most Vietnamese goods immediately upon the
agreement's entry into force, with 85.6% of tariff lines being exempted right away and 99.2%
after 7 years[15]. While the volume of imports from Vietnam to the EU has grown, the value of
EU goods exports to Vietnam saw a decline of 8.6% in 2022 compared to 2021 [15]. The EU
primarily exports machinery, transport equipment, and chemical products to the Vietnamese
market.

2.3.Export Tariffs

The EVFTA includes export tax measures, although it focuses on reducing import taxes.
Vietnam has agreed to eliminate most export taxes within a specific time frame, except for
some key commodities here such as coal and crude oil, because taxes from oil and coal
contribute significantly to the national budget and to reduce greenhouse gas emissions and
implement national environmental protection policies. Meanwhile, the EU does not impose
export tariffs on goods exported to Vietnam, which helps lower costs and enhance the
competitiveness of EU products in the Vietnamese market. As a result, no goods from the EU,
including Germany, exported to Vietnam under the EVFTA are subject to export tariffs.
Nevertheless, the EU retains the right to apply other trade protection measures when necessary
to safeguard its domestic market.[16]
2.4.Economic Impact
EVFTA has provided Vietnam with economic growth through increased exports and foreign
investment. It is expected that Vietnam's GDP will increase by 2% to 2.5% thanks to EVFTA.
The agreement also helps Vietnam become the EU's largest trading partner in ASEAN. While
adopting a greater role in the global supply chain, Vietnam has been able to reduce its
dependence on the US and Chinese consumer markets for the reason of EVFTA. The deal
makes it possible for Vietnam's exports to the EU to rise by 30–40% and for EU exports to
Vietnam to rise by 20–25%. EVFTA affects state budget income in two ways: it lowers revenue
since import and export taxes are reduced, but it also increases domestic revenue because of
trade and economic growth. At the same time, the EVFTA facilitates EU businesses to access
the Vietnamese market, enhancing economic and trade cooperation between the two sides. EU
businesses can take advantage of the agreement to increase exports to Vietnam, especially items
such as automobiles, machinery and equipment, and pharmaceuticals. EVFTA also helps the
EU strengthen its position in the ASEAN region, expanding the market for EU goods and
services. This agreement contributes to promoting the EU's economic growth by increasing
trade and investment with one of the fastest growing economies in Asia. [17]

2.5.Policy and Investment

The agreement requires Vietnam to improve its business environment, enhance business
competitiveness and carry out institutional reforms to take full advantage of the opportunities
brought by the EVFTA[19]. In addition, the EVFTA provides more favorable conditions for EU
investors to access the Vietnamese market, especially in areas such as economics, financial
services, distribution and transportation[18]. The agreement also encourages economic structural
reforms and institutional improvements aimed at attracting foreign investment. To support
Vietnam in fulfilling its commitments, the European Union provides technical assistance to
Vietnam to help it fulfill its obligations in areas such as public procurement and intellectual
property. EU businesses benefit from incentives when investing in Vietnam, which strengthens
economic and trade cooperation between the two parties [19]. The EVFTA replaces existing
bilateral investment agreements between Vietnam and EU member states, thereby creating a
more favorable environment for business operations in Vietnam.

3.CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific

Partnership)
Vietnam became an associate member of the CPTPP, a free trade agreement among 11 Asia-
Pacific countries, in 2019. It seeks to become economically integrated and open up markets.
The CPTPP has given Vietnamese goods and services access to new markets, especially in
electronics, materials, and agriculture. To be effective at the global level, it has also promoted
changes in different businesses.[20]

3.1.Import and Export

In Vietnam, CPTPP has helped Vietnam diversify its export markets and enhance its turnover
from exports to member sectors, especially Japan, Australia and New Zealand. Textiles,
electronics, footwear, equipment, and equipment represent the main exports. Export revenue
to CPTPP markets in the Americas exceeded 11.7 billion USD in 2023, almost doubling from
2018. However, because many enterprises are not fully mindful of the commitments under the
CPTPP, the rate of taking advantage of tariff benefits is still low. At the same time, CPTPP
nations: By lowering their tariffs on Vietnamese goods, CPTPP nations have facilitated an
increase in two-way trade. Import taxes are lowered for items like wood furniture and
agricultural and marine items, which encourages the expansion of bilateral commerce. [21]

3.2.Export Tariffs

Under the CPTPP, it requires Vietnam to remove most export taxes in a schedule of 5 to 15
years after the Agreement comes into effect. There are 519 taxation lines in Vietnam's
favourable export tax schedule for the CPTPP, and the average tax rate has been steadily
declining over time: 8.3% in 2022, 7.9% in 2023, 7.4% in 2024, 7% in 2025, 6.6% in 2026,
and 3.6% in 2027. When exported to the countries where the CPTPP Agreement has taken
effect, goods that are not listed in the preferential export tax schedule will be subject to a 0%
tax rate[22]. While there is no specific information on whether CPTPP countries apply export
taxes on goods shipped to Vietnam, the agreement primarily focuses on reducing import tariffs
to facilitate trade. To qualify for preferential export tax rates, exported goods must be
accompanied by transport documents and import declarations that clearly indicate the
destination within the territory of CPTPP member countries where the agreement has come
into effect.

3.3.Economic Impact

The CPTPP has played a big role in helping Vietnam's economy grow by increasing exports
and attracting foreign investment. By opening up new markets for its products, Vietnam has
become less reliant on just a few main trading partners [23]. For example, the trade surplus that
Vietnam has with CPTPP countries in the Americas has almost tripled from 2018 to 2023,
showing how the agreement has helped improve trade relationships [23]. At the same time, the
CPTPP benefits other member countries by making it easier to enter the Vietnamese market
and boosting economic and trade cooperation. Besides strengthening trade ties, the agreement
also helps CPTPP nations gain a stronger position globally and within the ASEAN region.

3.4.Policy and Investment

The CPTPP helps Vietnam improve its business environment and make its companies more
competitive. To get the most benefits from the agreement, Vietnam needs to actively guide and
support businesses in using tariff incentives[24]. At the same time, the CPTPP creates favorable
conditions for foreign direct investment (FDI) in Vietnam while encouraging institutional
reforms and business environment improvements across member countries [24].These
developments help Vietnamese enterprises integrate more deeply into the global value chain,
strengthening their position in international markets.
3.5.RCEP (Regional Comprehensive Economic Partnership)
Initiated in January 2022, 15 Asia-Pacific nations, including China, Japan, South Korea,
Australia, and New Zealand, have signed an extensive trading accord called the RCEP. Trade
between Vietnam and its surrounding neighbors is forecast to increase through the RCEP,
which will reduce levies on goods of every variety and open markets for buyers more.[25]

V. Determinants of International Trade in Vietnam

Determinants of International Trade in Vietnam

Cultural Distance

Refers to differences in language, traditions, business etiquette, and consumer preferences

between Vietnam and its trading partners. A large cultural distance can create barriers to trade
due to misunderstandings and differences in business practices.

Geographical Distance

The physical distance between Vietnam and its trading partners affects transportation costs,
delivery times, and logistics efficiency. Closer trade partners, such as China and ASEAN
countries, benefit from lower shipping costs and faster trade flows.

Political Stability

A stable political environment attracts foreign investment and fosters consistent trade policies.
Political instability, on the other hand, can deter international investors and disrupt trade
agreements.

Government Policies

The political stability and progressive stance of the Vietnamese government are important
factors in determining the trading environment of the country.
To improve its importation and exportation areas, Vietnam has put in place a number of
government initiatives, with a particular emphasis on financial incentives, strategic planning,
and assistance for significant sectors.

Size of the Local Market

The demand for imported goods and services depends on Vietnam’s market size. A growing
population and increasing middle-class consumption make Vietnam an attractive destination
for international trade and investment.

Quality of the Labour Force

A skilled and educated workforce enhances Vietnam’s competitiveness in industries like
manufacturing, technology, and services. Continuous investment in education and vocational
training improves the country’s appeal for high-value trade.

Wage Levels

Vietnam’s relatively low labor costs compared to developed countries make it an attractive
manufacturing hub. However, rising wages could impact its cost competitiveness in labor-
intensive industries.

Income Levels

Higher disposable income among Vietnamese consumers increases demand for foreign goods
and services. Conversely, lower-income levels may limit purchasing power and reduce imports.

Exchange Rate

The value of the Vietnamese dong (VND) against foreign currencies affects trade
competitiveness. A depreciated VND makes Vietnamese exports cheaper but increases the cost
of imports.
Openness to Trade

Vietnam's commitment to free trade agreements (e.g., CPTPP, EVFTA, RCEP) enhances its
trade openness. Reduced trade barriers, improved market access, and foreign investment
liberalization contribute to greater international trade activity.

1. Exchange Rate
Exchange rates directly affect the value of imported and exported goods, the fluctuation of
foreign capital flows and indirectly affect the entire economy.
An economy’s exchange rate has a crucial role in a country’s international trade as it determines
trade volume and competitiveness in the market. In Vietnam, a country which is largely
developing, the State Bank manages the exchange rate through a floating system which has
direct implications on the costs of exports as well as imports. To further advance the growth of
the economy, the SBV has set goals for ensuring monetary stability.
To examine the impact of exchange rates on a country's trade balance, economists use the real
exchange rate (REER). REER comprehensively reflects the competitive position of domestic
goods with trading partners at a given point in time[26] .For exports, devaluation reduces export
prices. The fall in export prices causes the quantity of exports to increase by a greater amount
than the fall in prices, increasing the value of exports during the period. As a result, the trade
balance improves. The devaluation policy is successful. Conversely, if the quantity of imports
is inelastic to price changes (elasticity coefficient is less than 1), the devaluation policy will
fail because it does not improve the trade balance. The same argument holds for appreciation.
The proportion of each partner country's import and export value in a country's total import and
export turnover or the proportion of currencies used in a country's foreign trade transactions
are used as weights in REER. Thus, REER is an index reflecting the country's price
competitiveness and is the basis for assessing whether a currency is overvalued or undervalued.

Figure 1 shows the trade values of Vietnam from Q1, 2009 to Q4, 2022. As demonstrated, both
exports and imports continuously increased with exports having more growth. The average
monthly exports increased by 1.21% and imports increased by 1.18% monthly. Thus, Vietnam
was able to move from having a trade deficit in 2009 to a trade surplus in 2016. The
phenomenon is puzzling because all other currencies are rising with the VND being remarkably
stable, and yet exports and imports are sustained or increased. Furthermore, it can be seen that
like the economic environment, trade patterns within the country for imports and exports are
in many ways closely aligned.
Furthermore, there was a significant period during which both exports and imports saw a
considerable rise, diverging notably from the metrics of the preceding period. The results
indicate that structural changes in imports occurred in February 2012 and August 2016, while
exports experienced structural changes in February 2014 and September 2017.
2. Income

2.1. A look at the Domestic Income Situation:

The General Statistics Office[27] indicated that the monthly income of Vietnamese laborers in
2023 was 7.1 million VND (over 291 USD) per individual, 6.9% higher compared to last year.

Disaggregated by gender, the average earnings of male workers were 8.1 million VND and
female workers were 6 million VND.

In the fourth quarter of 2023, there was a substantial rise in the living standard of workers since
the average income increased by 180,000 VND a month from the last quarter to 7.3 million
VND. This is a quarterly increase of 2.5% and is nearly double that which had been recorded
in the same quarter of 2022, after the COVID-19 pandemic came to an end.

The growth of average income in the fourth quarter of 2023 was experienced across various
regions of the country, with the Red River Delta experiencing the largest quarter-on-quarter
growth at 3.5% and year-on-year growth at 8.2%. The Southeast region experienced the lowest
rate of growth at around 2.3%.[28]

2.2. Income: The impacts on Vietnam’s International Trade

The income levels of the Vietnamese consumers are included in the dynamics of domestic
consumption as well as export business and are key determinants of the country's
competitiveness and diversification in the international market. The increase in Vietnamese
income levels has sustained a substantial increase in domestic consumption. Meanwhile, the
growth in foreign market income levels has also triggered a corresponding demand for
Vietnam's exports.

Vietnam's middle class is expanding rapidly, projected to reach over 50% of the population by
2035 (World Bank). With rising income, Vietnamese consumers spend more on high-quality
goods, including electronics, automobiles, luxury goods, and branded products. The increase
in wages for laborers is a result of companies increasing their business and production activities
in response to a growing volume of orders. As income rises, Vietnamese consumers tend to
favor imported products such as premium foods and beverages. As purchasing power has
grown, the need for a greater variety of items has also increased, leading to a more diverse
market both locally and globally. Conversely, income is also a predictive element businesses
should take into account while deciding on production or investment; this will help to boost
export capacity and global competitiveness by means of this process. Another downside
regarding this factor is that those whose main industries include laborers working remain low
paid.[29]

Some industries in Vietnam that produce export goods and bring these profits on a large scale
on an annual basis, like textile and garment, would very often employ an enormous labor force,
which in itself has made the payment of laborers a very difficult situation. The overwhelming
labor force that exists in Vietnam is contributing to the low labor cost. The presence of labor
means that the employer can afford to offer wages and benefits on the low side without
compromising the quality and quantity of the output. This gives Vietnam an upper hand when
it comes to labor cost competition against other countries. This has affected not only the output
but also the quality of the product, making it very hard for Vietnam's exported products to
compete with those of other countries. Subsequently, such laborers who receive low income
are unable to contend with their cost of living, which in turn greatly reduces total domestic
consumption and, thus, curtailing the import turnover.

3. Government Policies

Government Policies are key to setting Vietnam's global trading environment.

The Vietnamese government has implemented various policies that have immediate impacts
on foreign trade. International trade policy has a function of advancing national economic
growth and significantly contributing to a country's economic restructuring process. This
entails the determination of the extent and modes of involvement as each country becomes part
of the world division of labor. Besides, international trade policy is also instrumental in
maximizing the comparative advantages of an economy, developing the production and service
industries to their limits, speeding up economic growth, and enhancing the overall efficiency
of economic activities.

3.1.EVFTA

In recent years, the form of “new generation” bilateral or multilateral FTAs (Free Trade
Agreements) has become more and more popular, with a broader scope of cooperation, and
will gradually be able to replace the old generation of trade agreements.
A large number of FTAs have been signed and implemented recently, attracting a lot of
attention, observation and assessment of the impacts surrounding these agreements, for
example, the Transatlantic Trade and Investment Partnership (TTIP), EVFTA, CPTPP,….

Currently, according to the determination of some research organizations in the world, as well
as in Vietnam, we only have 2 "new generation" FTAs that have completed negotiations,
namely CPTPP and EVFTA, in which CPTPP has officially come into effect since January
2019.[30]

3.1.1. Impact of EVFTA agreement:

Tariff reductions and import and export procedures:

As with any free trade agreement, the removal of border restrictions plays a central role in the
EVFTA. In particular, the agreement between the EU and Vietnam can envisage the
elimination of average tariffs of around 2.2% in the EU and 5% in Vietnam on a trade-weighted
basis. For almost all import tariffs, these reductions will be implemented within seven years in
the EU and ten years in Vietnam, from the entry into force of the agreement. However, some
flexibilities will be considered for sensitive products. For example, EU tariffs on Vietnamese
textile and garment exports will be eliminated within five to seven years for sensitive goods
and within three years or effective immediately for less sensitive goods. For footwear, EU
tariffs will be eliminated after seven years for sensitive goods and three years or effective
immediately for less sensitive goods. There is no doubt that the manufacturing sector in
Vietnam is competitive. The combination of cheap labor and free access to the ASEAN+
market is enabling Vietnam to become a transit hub for exports to the entire region. Having an
FTA with the EU will not only help enhance EU investment in Vietnam but also bring other
benefits to the Vietnamese economy. This benefit is clearly demonstrated by the fact that
Vietnam can take advantage to further strengthen its position as a production and export base
(better quality, cheaper goods from the EU; larger market of 3.5 billion people; increased
technology transfer to Vietnam), thereby attracting more investment capital, with better quality
investment from both inside and outside the FTA area. After the EVFTA came into effect,
Vietnam has become the EU's largest trading partner in ASEAN and ranked 11th among the
largest suppliers of goods to the Union. At the same time, the EU is also Vietnam's third largest
trading partner.[31]

Overall, the agreement creates opportunities for Vietnamese-based companies to participate

more in regional production sharing, especially in labor-intensive sectors. Preferential access
to the EU market will give these companies an advantage over other countries in the region.
Ultimately, the key value chain developments that the EVFTA may bring will be determined
by the strategic decisions of companies in Vietnam and in the EU based on changes in the
business environment.

The following are the integrations of trade agreements:

3.2.Tariffs on Import-Export

Countries around the world, when participating in international trade activities, must publicly
disclose their tariff schedules - which systematically stipulate tariff rates for imported goods,
tax calculation methods and tax collection methods. This is the basis for countries to
implement tariff measures, therefore, tariff measures are also the most transparent tools in
each country's trade policy.

In compliance with Vietnam's obligations under free trade agreements and the World Trade
Organization, tariff rates have been progressively eliminated. Three sets of tariff rates exist:
The WTO's most-favored nation (MFN) rates, free trade agreements' preferential rates, and
general rates for the select few nations and territories that do not have MFN status. From
11.79% in 2003 to 2.86% in 2016, the weighted average of Viet Nam's 211 effectively
imposed tariff rate fell precipitously (Figure 10.2). Nominal protection rates are low in the
industries that produce intermediate commodities, such as chemicals, fertilizer, metal
products, and building materials. On the other hand, larger taxes are still applied on finished
goods, especially clothing, medications, and food and beverages.

With its FTAs, Vietnam has gradually lowered tariffs, thereby making its exports
competitive. Tariffs substantially influence exports. With the EVFTA taking effect, barriers
will be dismantled down to zero, which will, in any case, provide great support for Vietnam's
exports. Following this opportunity, Vietnam must further continue improving product
quality, closely following the production process to ensure consistent quality, and better
meeting the improvement of demands from consumers in the EU. On the side of the State, it
should establish and boost trade promotion measures and start implementing programs that
promote Vietnamese products to partners in the EU market.[32]
VI.Conclusion and Recommendations

1.Summary of Key Findings

1.1Understanding International Trade

International trade is like a global marketplace where countries specialize in certain goods
and exchange them.

Vietnam, for instance, excels in coffee and electronics, while other countries focus on
machinery or textiles.

1.2. Role of International Trade in Vietnam’s Development

1 Economic Growth:

International trade contributes significantly to GDP, with strong industrial and export growth.

FTAs have helped Vietnam access bigger markets, boosting exports and technological
advancements.

2.2 Exchange Rate Policy:

Vietnam maintains a competitive exchange rate, supporting exports but facing challenges due
to global financial market fluctuations.

2.3 Social & Environmental Considerations:

Positive: Job creation and income growth (GDP per capita increased from $2,300 in 2015 to
$4,086 in 2022).

Negative: Pollution, industrial waste, and deforestation due to rapid economic expansion.

1.3. Government Trade Policies & Agreements

EVFTA (EU-Vietnam Free Trade Agreement):

Nearly 100% of Vietnamese exports to the EU benefit from tariff removal.

CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership):

Helps Vietnam diversify markets but faces challenges in tariff preference awareness.

RCEP (Regional Comprehensive Economic Partnership):

Enhances trade with Asia-Pacific countries, reducing tariffs and boosting regional commerce.
1.4. Determinants of International Trade in Vietnam

Exchange Rate:

Plays a critical role in trade competitiveness; stable exchange rates have supported Vietnam’s
export-driven economy.

Income Growth:

Rising incomes have increased domestic consumption and improved Vietnam’s export
potential.

Government Policies:

Trade agreements, tariff reductions, and non-tariff barriers shape Vietnam’s global trade
environment.

Conclusion:

Vietnam's trade sector has demonstrated strong resilience and adaptability, contributing
significantly to economic growth, job creation, and foreign investment. However,
challenges like exchange rate fluctuations, tariff risks, and environmental concerns
remain. Moving forward, effective trade policies, sustainable development strategies, and
continued global integration will be crucial for maintaining Vietnam’s competitive edge in
the international market.

2.Important Factors and Strategies for Advancing Vietnam's Trade

Vietnam has made significant strides in international trade, but to sustain and expand its
success, several key factors and strategic measures are essential. Below are the most critical
factors and strategies for advancing Vietnam’s trade in the coming years.

2.1Key Factors Influencing Vietnam's Trade Development

Diversification of Markets:

Reducing dependence on a single major market is very important. Vietnam is actively

pursuing diversification into markets in Africa, the Middle East and South America. This
helps to reduce risks associated with economic fluctuations in specific regions. [33]

This helps mitigate risks associated with economic fluctuations in specific regions.
"Navigating global trade: Vietnam's strategies for export success in 2025 - TTWTO
VCCI"[34]

Leveraging Free Trade Agreements (FTAs):

Vietnam's participation in numerous FTAs (e.g., CPTPP, RCEP, EVFTA) provides

significant tariff advantages and market access. [35]

Maximizing the benefits of these agreements is essential for trade growth.

"Vietnam's Strategy Amid Changing The United States Trade Policies - Source of Asia"[36]

Enhancing Logistics and Infrastructure:

Efficient logistics and robust infrastructure are essential for smooth trade operations.
Investment in transportation, warehousing, and digital infrastructure is necessary. [37]

Information gathered from Vietnam Briefing, that indicates the importance of investing in
modernizing logistics sectors[38]

Improving Product Quality and Standards:

Meeting international quality and safety standards is essential to be competitive in the global
marketplace.This includes compliance with regulations relating to food safety, environmental
protection, and labor practices.[39]

Focusing on High-Growth Sectors:

Vietnam is strategically developing areas sục as technology, renewable energy, and advanced
manufacturing. Attracting foreign investment and promoting innovation in these areas is
crucial.[40],[41],[42]

Embracing Digital Transformation:

Leveraging e-commerce, digital platforms, and advanced technologies can enhance trade
efficiency and expand market reach.[43]

Strategies:

Strengthening Public-Private Partnerships: Collaboration between the government and the

private sector is necessary for developing effective trade policies and initiatives.

Promoting Sustainable Trade Practices:Adopting environmentally friendly production

processes and sustainable sourcing can enhance Vietnam's competitiveness in global markets.
[44]

Investing in Skills Development:Equipping the workforce with the necessary skills to meet
the demands of modern industries is crucial. [45]
Enhancing Trade Promotion Activities: Participating in trade fairs, organizing business
delegations, and utilizing digital marketing can help Vietnamese businesses expand their
export markets. [46]

By focusing on these factors and implementing these strategies, Vietnam can continue to
boost trade and strengthen its position in the global economy.
VII.REFERENCES
[1] Tổng cục Thống kê. (2025, January 6). Báo cáo tình hình kinh tế - xã hội quý IV và năm
2024. Retrieved from: https://www.gso.gov.vn/bai-top/2025/01/bao-cao-tinh-hinh-kinh-te-xa-
hoi-quy-iv-va-nam-2024/

[2] Bộ Tài chính Việt Nam. (n.d.). Chi tiết tin về tài chính. Retrieved from:
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