Vietnam: Free Trade Areas

The paper provides comparative characteristics of free trade areas (FTA) with Vietnam’s participation, and attempts to summarize his rich and instructive experience in this realm. The first section analyzes the reasons of creation and the balance of power in the FTA with the Eurasian Economic Union (EAEU). In the second section it describes the general approach of Vietnam towards integration into the world economy and presents the FTA network (“spaghetti bowl”) set up by Hanoi. The author assesses the factors that determined the choice of Vietnam and the participants of the EAEU while establishing their FTA. He reveals the motivation of the EAEU leaders, particularly Russia, in their decision, the importance of economic aspects of cooperation with the first partner in the FTA framework. Thus, it becomes possible to discover the importance of new integration union for both parties. Economic potential of the FTA members is estimated in order to define their respective roles, “weight category” and, finally, the main beneficiaries of the agreement. So far, we verify the correctness of the dissemination of findings from our analysis of trade between Russia and Vietnam (for which we have representative data) on the agreement at whole. The author explores the main parameters of the agreements with the Asia-Pacific countries and displays aspects of the FTA agreements different for the EAEU and other Vietnam partners. It makes easier to identify countries and regions that take the leaders’ position in the integration process. The composition of trade and other forms of interaction between participants of the FTA in both groups of Vietnam partners is highlighted and a tendency to boost them is revealed. The paper promotes estimations on the conditions, rate, magnitude and first results of liberalization of mutual trade, on safeguard measures applied to support domestic producers. It reveals the preferential treatment difference granted by FTA parties to each other and the reasons for these differences. In conclusion, the impact of the FTA network on competition between Russia (EAEU) and other Vietnam partners which occupied the best position in its market is stressed.