VIETNAM ACADEMY OF SOCIAL SCIENCES GRADUATE ACADEMY OF SOCIAL SCIENCES NGUYEN HA PHUONG THESIS IMPACT OF ASEAN-AUSTRALIA- NEW ZEALAND FREE TRADE AGREEMENT ON TRADE RELATIONS BETWEEN VIETNAM AND AUSTRALIA, NEWZEALAND Major: International Economics Major code: 31 01 06 SUMMARY OF THE THESIS Hanoi, 2019 The thesis is completed in: Graduate Academy of Social Sciences, Vietnam Academy of Social Sciences Supervisors: Assoc.Prof.Dr Nguyen Chien Thang Assoc.Prof.Dr Dang Thi Phuong Hoa Reviewer 1: Prof Dr Do Duc Binh Reviewer 2: Assoc.Prof.Dr Trinh Thi Thanh Thuy Reviewer 3: Assoc.Prof.Dr Trinh Thi Hoa Mai Phd thesis will be defended in front of the Academy-level Dissertation Committee in: at……… ….…………, ……………….……………… The thesis can be found at the library: INTRODUCTION The rationale Vietnam has established formal diplomatic relations with Australia since 1973 and with New Zealand since 1975 Over the past 40 years, the relationship between Vietnam and Australia and New Zealand has been continuously consolidated and developed, especially in the economic field In recent years, the Government of Vietnam, Australia and New Zealand have always launched many policies to promote the expansion and development of economic and trade relations among countries, facilitating businesses in the export dynamics, especially Vietnam's exports to these two important markets Currently, Australia and New Zealand are one of Vietnam's major trading partners On February 27th, 2009, after 34 years with many rounds of discussions and negotiations, the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) was signed at the 14th ASEAN Summit in Thailand The following year, AANZFTA entered into force Accordingly, AANZFTA is the first trade agreement between Australia and New Zealand with trade partners from ASEAN including Vietnam AANZFTA not only brings many opportunities but also challenges to economic relations in general, trade in goods in particular between Vietnam and Australia, New Zealand If Vietnam can take advantage of this opportunity, it will be an extremely favorable condition for Vietnam to easily expand its market, absorb advanced technology and improve the quantity and quality of export products with Australia and New Zealand However, compared to some ASEAN countries, trade between Vietnam and these two countries is still modest Specifically, in 2017, Vietnam ranked fifth in total import-export turnover with Australia and New Zealand, after Thailand, Malaysia, Singapore and Indonesia with a relatively far distance Thus, increasing export of goods through reducing trade barriers for Vietnamese exports to Australia and New Zealand is an urgent need now and in the future AANZFTA has been signed and implemented for nearly 10 years, of which Vietnam is an official member The implementation process of the Agreement has changed the trade in goods between Vietnam and Australia and New Zealand Therefore, in-depth study of the impacts of AANZFTA on trade relations, namely import and export of goods between Vietnam with these two countries, is extremely necessary in making comments and assessments in time to make appropriate strategic adjustments, taking advantage of AANZFTA's commitments in promoting trade and improving relations with these two potential partners Moreover, Vietnam, Australia and New Zealand are also members of the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) The problem is compounded by the fact that Vietnam and its partners have to implement different free trade agreements (FTAs) Therefore, the study of the implementation impacts of AANZFTA plays an important role in the process of developing policies and orienting cooperation between Vietnam and Australia, New Zealand in the coming time Although there have been a number of studies and forecasts of the impact of AANZFTA on Vietnam's economic development and trade relations with participating partners, there must be adequate and comprehensive studies in the new context Therefore, the thesis " Impact of ASEAN-Australia-New Zealand Free Trade Agreement on trade relations between Vietnam and Australia, New Zealand" is extremely necessary in the context of the dynamic integration today 2.2 The purpose and research tasks of the thesis 2.1 Research purpose of the thesis The thesis examines the actual impact of the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) on Vietnam's trade in goods with Australia and New Zealand after the agreement is signed As a result, asessment and suggestions for Vietnam are provided 2.2 Research tasks of the thesis • The thesis summarized the theoretical and practical contents that are the basis of the ASEAN-Australia-New Zealand Free Trade Agreement and its impact on Vietnam's trade in goods with Australia and New Zealand • The thesis assessed the impact of AANZFTA on trade turnover, growth rate and trade balance, the proportion of Vietnam's trade in goods with Australia and New Zealand • The dissertation examined the shift in commodity structure in Vietnam's trade with Australia and New Zealand before and after AANZFTA is implemented • The thesis evaluated and analyzes the impact of AANZFTA's trade creation and trade diversion on Vietnam's trade • The thesis analyzed the prospects and solutions for Vietnam to take advantage of AANZFTA in trade in goods with Australia and New Zealand Subjects and scope of research of the thesis 3.1 Research subjects Research on the impact of implementing AANZFTA commitments on trade in goods of Vietnam and Australia and New Zealand based on three contents: impact on trade value of goods, impact on trade structure, trade creation and trade diversion 3.2 Research scope -Content: the content of thesis is trade in goods relations, particularly, the import and export of goods between Vietnam and Australia, New Zealand, in which the commodity structure is classified into two types: good groups under the HS code 2012 and good groups according to the production stage -Time: The thesis will evaluate in the period 2002-2017 and orientation 2025 -Space: Countries in the AANZFTA (including Australia, New Zealand, Vietnam, Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, Philippines, Singapore and Thailand) Methodology and research methods of the thesis With the research object of exchanging trade in good between Vietnam and Australia, New Zealand in the context of AANZFTA implementation, the author used the Post- ante methods and give a rough overview of trade potential These methods are commonly used to assess impacts after a free trade agreement is implemented 4.1 Methodology and resources The author approached the issue based on the theory of Free Trade Agreement, the theory related to the impact of Free Trade Agreement on trade in goods of nations The qualitative and quantitative methods were applied to examine the impact of AANZFTA on Vietnam's trade in goods with Australia and New Zealand In particular, the structure of goods is classified into two types: groups under HS code 2012 and groups according to production stage References of the topic are collected from import and export data from Trade map, Wits, Vietnam General Department of Customs; GDP from the World Bank is the input to calculate the impact of AANZFTA 4.2 Research methods of the thesis 4.2.1 Qualitative method Looking at the impact of AANZFTA on Vietnam's trade with Australia and New Zealand, the author used the qualitative methods such as general analysis methods, statistical methods and comparative methods before and after AANZFTA was implemented, methods of inheritance, experts’ opinions interviews Since then, we can explain issues related to the impact of AANZFTA on Vietnam's trade in goods with Australia and New Zealand 4.2.2 Quantitative methods 4.2.2.1 Method of usinghave strong points like textile and garment and footwear will be reduced until 2018-2020 Moreover, competitors with Vietnam in these two markets are China, Singapore, Thailand, etc enjoy very low tariff incentives through previous bilateral FTAs Third, the rate of utilization of AANZFTA incentives in Vietnam is still low compared to the national potential Compared to some countries in the region, Vietnam's preferential utilization rate is still low Vietnam's rate of using preferential tariffs is still low because Vietnamese exporters are reluctant to apply for C / O for certificates of origin because of the time and cost to receive C / O even higher than the benefit from tariff incentives Fourth, the support from the concerned agencies is not really effective Although agencies such as the Ministry of Industry and Trade, Trade Offices in Australia and New Zealand, VCCI, etc have made efforts to support businesses but are still limited and lack professionalism Fifth, enterprises have not been proactive in implementing AANZFTA commitments, especially small and medium enterprises Although there has been a change in recent times, it has not yet met the rapid changes of the region as well as the global economy Enterprises still have not paid attention to, invested and developed the brand for Vietnamese exports Sixth, Australian and New Zealand businesses have boldly invested in Vietnam So far, the investment of these two countries into Vietnam has not been commensurate with the potentials and expectations of both sides Especially for manufacturing and processing industry, which is the strength of these two countries is still at a low rate Therefore, creating regional supply chains to take advantage of the reduction of tariff and nontariff barriers is slower than in other countries such as Korea, China, Taiwan, and Japan 19 CHAPTER 4: FORECASTING THE PROSPECTS OF VIETNAM’S TRADE RELATIONS WITH AUSTRALIA AND NEW ZEALAND BY 2025 AND SOME IMPLICATIONS FOR VIETNAM 4.1 The regional and world context affects Vietnam's trade relations with Australia and New Zealand 4.1.1 World context Currently, the process of globalization and international economic integration is happening strongly in the world, especially bilateral trade and regional liberalization Along with the process of globalization and free trade, the process of trade protection is also rising strongly In other words, countries are considering between protecting domestic production and international trade integration Along with the trend of globalization is the strong development of global science and technology The world economy is showing signs of recovery after the crisis and there will be positive signs until 2025 4.1.2 Domestic and regional context Vietnam's trade integration with Australia and New Zealand is partly affected by the regional political security context The formation of the ASEAN Community (AC) after 2015 is a premise for Vietnam's commercial development with Australia and New Zealand Two-way trade will increase rapidly due to regional agreements and integration policies of Vietnam Therefore, regional and international contexts are changing quickly with complex and unpredictable changes This will affect relations between countries in general, members of AANZFTA in particular both positive and limited Vietnam needs to grasp the opportunities and take advantage of advantages and incentives in AANZFTA to enhance trade with these two countries 4.2 Orientation of trade cooperation of Vietnam with Australia and New Zealand 4.2.1 Orientation of Vietnam's trade cooperation with Australia Vietnam and Australia have established diplomatic relations since 1973 and have so far achieved good results in many fields In the coming years, the two sides emphasized the role of economic cooperation in raising the strategic partnership To achieve this, the direction of cooperation between the two sides is confirmed through talks between leaders of the two sides With these orientations, Vietnam-Australia trade relations will develop strongly in the coming time, creating an important turning point towards the bilateral trade relations with 10 billion USD 4.2.2 Trade cooperation orientation of Vietnam and New Zealand Along with the signing of AANZFTA, Vietnam and New Zealand have been implementing many measures to promote trade cooperation 20 Specifically in the direction of economic cooperation, the two countries continue to commit to implementing bilateral and unilateral measures to reduce two-way trade barriers, especially for agricultural products Thus, with the orientation of cooperation to improve bilateral relations, especially economic relations, the prospects in Vietnam 's two - way trade relations with New Zealand will increase rapidly, reaching the goal of 1.7 billion USD in 2020 Especially Vietnam will have the opportunity to fully enjoy the benefits that AANZFTA brings 4.3 Forecast of export and import prospects between Vietnam and Australia, New Zealand within the framework of AANZFTA After 2020, when all tariffs are reduced to 0% for Australia and New Zealand and 90% of tariff lines are reduced to 0% for Vietnam, along with the orientation to strengthen bilateral cooperation and trade in goods The chemistry between Vietnam and these two countries will develop positively and will grow rapidly in the next years First, Vietnam's trade value of goods with Australia and New Zealand will increase rapidly, especially in Vietnam's exports Secondly, along with the stronger tariff reduction in the following years, AANZFTA will help Vietnam and Australia and New Zealand to specialize in the production and export of advantageous goods more effectively Thirdly, the structure of export goods continues to shift towards increasing the proportion of capital goods and consumer goods, gradually reducing the proportion of raw materials and preliminary processing; import structure will shift in the opposite direction Fourth, in the coming years, Vietnam will optimize the advantages of creating trade when joining AANZFTA through strengthening the import of your country's goods with a comparative advantage 4.4 Some implications for Vietnam to take advantage of AANZFTA in trade in goods with Australia and New Zealand 4.4.1 More attention should be paid to the impacts of regional and world context in strengthening relations with Australia and New Zealand Along with the flow of globalization and international economic integration, AC formation after 2015 as well as bilateral and multilateral agreements, whichVietnam has been participating, is a premise for Vietnam's trade development with Australia and New Zealand Therefore, Vietnam needs to take advantage of this opportunity to participate in the regional network Along with taking advantage of opportunities that the regional and world context brings, Vietnam also needs to overcome new difficulties First of all, it is necessary to reduce the structure of exports of natural resources such as oil and minerals to Australia and New Zealand because these products depend heavily on the world economy, so our country will be difficult to take the initiative in market regulation In 21 addition, there should be appropriate forecasts on the world financial situation to promptly respond to fluctuations and adjustments Our country needs to cooperate with the two countries on security and defense issues in order to build a stable area to strengthen trade cooperation In addition, the three sides need to support each other at regional and international forums 4.4.2 Cooperation with Australia and New Zealand should be strengthened through trade promotion measures within the framework of AANZFTA So far, AANZFTA has been implementing for years and is continuing to adjust a number of terms for the implementation to get high efficiency Therefore, Vietnam also needs to continue implementing the roadmap as committed as well as change the circulars to fit the adjustments in the agreement To address the non-tariff issues mentioned above, Vietnam needs to meet SPS and TBT requirements through support programs to improve production and processing that Australia and New Zealand has been sponsoring our country 4.4.3 The rate of preference utilization should be increased in AANZFTA In general, the rate of preferential utilization in AANZFTA of our country is still low Therefore, Vietnam needs to increase the rate of preferential utilization in AANZFTA, at least keep up with ASEAN-India and ASEAN-China is about 40% Stricter control in the production, processing and distribution of agricultural and fishery products to Australia and New Zealand so that there are no poor quality products, international standards and meet origin In addition, the rate of utilization of Vietnam's preferential tariffs is still low because Vietnamese exporters are reluctant to apply for C / O for certificates of origin due to the loss of time and costs to receive C / O even higher Fees to benefit from tariff incentives Therefore, our country needs to resolve this situation by simplifying administrative procedures and import and export procedures Vietnam needs to promote propaganda and awareness of AANZFTA to industry associations and business community so that they can understand the contents of the Agreement Enhance the promotion of the practical benefits that AANZFTA brings to Vietnam, especially the benefits of Vietnamese enterprises participating in Australia and New Zealand markets 4.4.4 Coordination between authorities and businesses should be strengthened in implementing AANZFTA Although Vietnam has carried out promotion activities and trade support and support from relevant agencies, the reality is not really effective Therefore, in order to enhance two-way trade and take advantage of the opportunities provided by AANZFTA, this activity needs to be 22 improved both in quality and quantity, and implemented in various combinations with many measures both domestically and abroad, aiming to maximize professionalism and efficiency in this work Government authorities need to continue negotiating with Australia and New Zealand in opening markets, and speeding up the process of granting import licenses and reducing import regulations for Vietnamese products , especially fruit items such as labels, breast milk, grapefruit Along with that, Vietnamese enterprises need to actively participate in trade promotion programs In addition, in trade promotion, enterprises must also focus on branding for export products 4.4.5 Enhancing Vietnam's competitiveness with AANZFTA countries In order to improve our country's competitiveness for countries participating in the agreement, Vietnam needs to enhance investment attraction from Australia and New Zealand To this, the government and businesses need to work closely together to innovate technology, thereby increasing labor productivity, improving quality and lowering product prices to meet requirements from Australia and New Zealand Besides, it is necessary to invest in building a brand name for export products and for Vietnamese exporters Therefore, Vietnamese products and enterprises are in the international market and in the domestic market in the context of increasingly fierce competition 4.4.6 It is necessary to step up production and export of advantageous goods and take advantages of tariff incentives from Australia and New Zealand within the framework of AANZFTA In order to promote this advantage without affecting the competition of domestic enterprises, our country needs to use a special import strategy of overseas exploiting and processing products Vietnam needs to specialize in the production of products with comparative advantages, high commercial potential and especially Australian and New Zealand products that reduce tariffs In addition, in order to take advantage of AANZFTA's role in trade diversion in Australia and New Zealand markets, Vietnam should step up production and export of goods such as machinery and electrical equipment 23 CONCLUSION Based on the research results, the thesis comes to some conclusions: The project reviewed and analyzed a number of references published in Vietnam and abroad on trade exchanges, FTAs and especially the impacts on stakeholders and shows that this is a master The problem is quite complex and there are many different ways to evaluate and comment The research results of the works are published as well as the data from reputable commercial agencies, the comments of the government, businesses, associations, etc provided scientific arguments learning and practice are valuable to help the thesis author see more multidimensional issues, inherit and better examine commercial impact practices On the basis of analyzing the concepts of Free Trade Agreement, classification, major rules, etc the thesis has pointed out the main contents and changes in agreements in contextual agreements scenes, benefits of the parties The thesis tries to analyze the theoretical basis of free trade agreements and the impact on trade in goods of the countries, that is: dynamic effects, potential economic effects, basic theories and the contents of trade creation and trade diversion, etc The use of theoretical basis to assess the impact of trade agreements is essential That is the use of index method including: Current comparative advantage index, regional direction index, etc and models: gravity model, trend prediction method, etc To create Setting up a theoretical and practical basis, the author tried to develop an analytical framework to assess the status of AANZFTA's impacts on trade in Vietnam and Australia and New Zealand Although newly signed in 2009 and effective in 2010, research on AANZFTA has shown a clear impact on Vietnam's trade with Australia and New Zealand, especially in the context of Big Vietnamese partners like the EU and the US are dealing with post-crisis issues With the reduction of deep import tariffs of Australia and New Zealand and support programs under the AANZFTA side program, Vietnam will have the opportunity to export advantageous commodities such as textiles, seafood and import of Quality products with low prices that countries in the Agreement have advantages such as fruits, milk and dairy products This agreement is an important premise to strengthen Vietnam's trade relations with Australia and New Zealand and this has been proven after years of implementing the Agreement Specifically, the total trade turnover of Vietnam with Australia and New Zealand was higher after the agreement came into effect in 2010 In particular, the trade balance is always inclined to Vietnam and the growth rate in export higher imports In addition, the average growth rate of trade after AANZFTA was higher 24 LIST OF PUBLICATION Name of author, Name of article, Name of journal, Number of No Volume of journal, Page of articles and Publishing ISSN year Nguyễn Hà Phương, “Tác động Hiệp định thương 1859-0012 mại tự đến thương mại quốc gia: Lý thuyết phương pháp đánh giá”, Tạp chí Kinh tế phát triển, Vol 215 (II), pp.40-46, 2015 Nguyen Ha Phuong, “Assessing impacts of Asean — 2072-0297 Australia — New Zealand and free trade agreement on Vietnam's imports: using the gravity model”, Молодой учёный Международный научный журнал Выходит, № (106), pp.554-556, 2016 Nguyễn Hà Phương, “Quan hệ thương mại 0868-2739 ASEAN với Australia New Zealand giai đoạn 2009-2015: Thực trạng triển vọng”, Nghiên cứu Đông Nam Á, Vol (198), pp.13-20, 2016 Nguyễn Hà Phương, “Tác động Hiệp định thương 0868-2739 mại tự ASEAN- Australia- New Zealand cấu ngành xuất nhập Việt Nam đến Australia New Zealand”, Nghiên cứu Đông Nam Á, Vol 10 (211), pp.48-55, 2017 Nguyễn Hà Phương, “Quan hệ thương mại hàng hóa 0866-7489 Việt Nam Niu-Di-lân giai đoạn 2010-2016”, Nghiên cứu Kinh tế, Vol (479), pp.76-85, 2018 Nguyễn Hà Phương, “Cơ hội xuất hàng nông sản 0868-2739 Việt Nam sang Australia New Zealand”, Nghiên cứu Đông Nam Á, Vol (219), pp 60-74, 2018 Nguyen Ha Phuong, “ASEAN-Australia- New 0868-359X Zealand Free Trade Area: Prospects, Challenges, Policy Direction for Vietnam”, Vietnam’s Socio-Economic Development, Vol 23, No 93, pp 30-36, 2018 ... Name of author, Name of article, Name of journal, Number of No Volume of journal, Page of articles and Publishing ISSN year Nguyễn Hà Phương, Tác động Hiệp định thương 1859-0012 mại tự đến thương. .. New Zealand giai đoạn 2009-2015: Thực trạng triển vọng”, Nghiên cứu Đông Nam Á, Vol (198), pp.13-20, 2016 Nguyễn Hà Phương, Tác động Hiệp định thương 0868-2739 mại tự ASEAN- Australia- New Zealand. .. cấu ngành xuất nhập Việt Nam đến Australia New Zealand , Nghiên cứu Đông Nam Á, Vol 10 (211), pp.48-55, 2017 Nguyễn Hà Phương, Quan hệ thương mại hàng hóa 0866-7489 Việt Nam Niu-Di-lân giai