TAILIEUCHUNG - An Application of the SMART Model to Assess Impacts of the EVFTA on Vietnam’s Imports of Automobiles from the EU
This paper assesses the potential impacts of the European - Vietnam Free Trade Agreement (EVFTA) on Vietnam's imports of automobiles from the EU by adopting the Software on Market Analysis and Restrictions on Trade (SMART) based on two scenarios. The simulation results reveal that the EVFTA would result in a significant increase in Vietnam's automobile imports from the EU, implying that the EU would be still among the biggest car sources for Vietnam in the upcoming time. | VNU Journal of Science: Economics and Business, Vol. 33, No. 2 (2017) 1-13 RESEARCH An Application of the SMART Model to Assess Impacts of the EVFTA on Vietnam’s Imports of Automobiles from the EU Vu Thanh Huong*, Pham Minh Tuyet VNU University of Economics and Business, 144 Xuan Thuy Str., Cau Giay Dist., Hanoi, Vietnam Received 21 April 2017 Revised 16 May 2017, Accepted 22 June 2017 Abstract: This paper assesses the potential impacts of the European - Vietnam Free Trade Agreement (EVFTA) on Vietnam's imports of automobiles from the EU by adopting the Software on Market Analysis and Restrictions on Trade (SMART) based on two scenarios. The simulation results reveal that the EVFTA would result in a significant increase in Vietnam's automobile imports from the EU, implying that the EU would be still among the biggest car sources for Vietnam in the upcoming time. However, when Vietnam also extends its coverage of tariff elimination to ASEAN+3, the reduction in Vietnam’s automobile imports from the EU would be considerable. Another important finding is that an uneven distribution in Vietnam’s additional automobile imports from the EU by nation, automobile group and automobile product would occur when the EVFTA comes into effect. In both scenarios, trade creation effects are higher than trade diversion effects and hence, the EVFTA could raise the welfare of Vietnam. Based on these results, the paper ends by drawing out some implications for the Vietnamese government and domestic enterprises to be better prepared for the upcoming ambitious EVFTA. Keywords: Vietnam, EU, EVFTA, ASEAN+3, automobiles, SMART. 1. Introduction * Vietnam’s automobile industry development strategy and master plan for 2025 with a vision to 2035, Vietnam sets up the objective to build up the automobile sector into a key industry that will not only meet the domestic demand but also create a motive force to promote the development of other manufacturing industries. In spite of the perceived .
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