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Potential Economic Impacts of the Vietnam-Korea Free Trade Agreement on Vietnam

Author

Listed:
  • Phan, Thanh Hoan

    (Hue University)

  • Jeong, Ji Young

    (Chonbuk National University)

Abstract

This paper provides an assessment of the potential economic impacts of the Vietnam-Korea free trade agreement on Vietnam, by using general equilibrium modeling. The results show that Vietnam-Korea FTA will increase aggregate welfare for both countries in the long run. The most important gains accrue from better allocation of resources consequent to trade liberalization. All the sectoral differences and changes are consistent with the trade profiles of the two countries, and the long-run results are more pronounced than those of the short-run. In comparison with other ASEAN countries, the CGE analysis suggests that Vietnam's agriculture exports to Korea would especially rise in the long run. However, there will be strong competition in this sector among ASEAN members. Thus, an earlier conclusion of a comprehensive FTA with Korea is expected to be a good strategy for Vietnam, so as to avoid the direct competition with ASEAN members in the future.

Suggested Citation

  • Phan, Thanh Hoan & Jeong, Ji Young, 2016. "Potential Economic Impacts of the Vietnam-Korea Free Trade Agreement on Vietnam," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 20(1), pages 67-90, March.
    • Handle: RePEc:ris:eaerev:0017
    DOI: 10.11644/KIEP.JEAI.2016.20.1.305
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    Cited by:

    1. Nhan Thanh Thi Hoang & Hoan Quang Truong & Chung Van Dong, 2020. "Determinants of Trade Between Taiwan and ASEAN Countries: A PPML Estimator Approach," SAGE Open, , vol. 10(2), pages 21582440209, May.
    2. Anh Ngoc Nguyen & Nguyen Thi Tuong Anh & Nguyen Ngoc Minh & Nguyen Thi Phuong Mai, 2018. "SOUTH KOREAN MULTINATIONAL ENTERPRISES AND VIETNAM SMEs’ PARTICIPATION IN GLOBAL PRODUCTION NETWORKS IN THE CONTEXT OF INCREASED ASEAN AND EAST ASIAN REGIONAL ECONOMIC INTEGRATION," Working Papers 03, Development and Policies Research Center (DEPOCEN), Vietnam.

    More about this item

    Keywords

    Free Trade Agreement; General Equilibrium; GTAP; Vietnam; Korea; Trade Policy;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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