The reform of Vietnamese Economic institutions under the impact of Free Trade Agreements: A case study of the EU and Vietnam Free Trade Agreement

Abstract

My paper introduces general information about Vietnam’s Free Trade Agreements (FTAs) which shows the main achievements of the Vietnamese economic integration on the regional level as well as on the global level through FTAs during its economic reform period. It explains the impacts of FTAs which would eliminate tariff s for Vietnam, expand its market, improve the legality of trade, increase the quality of produce and then further benefi ttrade and economic growth. Especially, FTAs are highly necessary for reforming Vietnam’se economic institutions. In addition, of the free trade agreement between the EU and Vietnam FTA (EVFTA) is presented, introducing a new phase in the Vietnam-EU cooperation. EVFTA can off er more trade opportunities for both sides. However, Vietnam also faces many challenges in which Vietnam can lose access to the EU market because it has a lower capacity, weak competition and a slow reform of its economic system, due to the dominant of state owned enterprises. EVFTA might trap Vietnam in inside a low-wage, low-skill cycle. Th e EU imposes a conditionality of the improvement of social issues, stressing democracy, human rights and labor. Th ese issues can be obstacles for the negotiation and implementing of EVFTA.