Impact of the Vietnam - EAEU FTA on the trade between Vietnam and Eurasian Economic Union

Abstract

— This study uses a structural gravity model of trade to examine the impact of the Vietnam - Eurasian Economic Union free trade agreement (FTA Vietnam - EAEU) on exports and imports between Vietnam and its member countries before and after the agreement. The model is tested on a sample of in-dustry-level panel data from 2001 to 2019, the author estimates the fixed-effects model (FEM) in the country - paired with the number of observations obtained is 5,386 observations forming a repeat sample, unbalanced. The paper also performs Pseudo Poisson maximum likelihood estimation (PPML) is also applied to solve the zero trade issue and the presence of heteroskedasticity. The results indicate that the agreement leads to "trade creation", import and export turnover increases compared to before the agreement. The authors propose that the two sides need to boost to produce and export the comparative advantage products in order to seize preferential treatment from the agreement without affecting competition and complementing each other.