ECON1269 A2 HN02 International Trade PDF

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GROUP ASSIGNMENT 2Course Code ECONCourse Name International TradeCampus Hanoi CampusLecturer Dr. Long DoStudents Tran Quynh Ngoc - s Nguyen Thanh Binh - s Nguyen Thi Thu Trang - sWords Count 1475Part ContributionTran Quynh Ngoc Question 2 (C,D) NgọcNguyen Thanh Binh Question 1 (A,B,C) BìnhNguyen Thi...

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GROUP ASSIGNMENT 2

Course Code

ECON1269

Course Name

International Trade

Campus

Hanoi Campus

Lecturer

Dr. Long Do

Students

Tran Quynh Ngoc - s3636101 Nguyen Thanh Binh - s3695680 Nguyen Thi Thu Trang - s3749503

Words Count

1475

Part Contribution

Tran Quynh Ngoc

Question 2 (C,D)

Ngọc

Nguyen Thanh Binh

Question 1 (A,B,C)

Bình

Nguyen Thi Thu Trang

Question 2 (A, B)

Trang

Question 1. a)

2015

2016

2017

2018

2019

2020

1-10/2021

2,80

2,15

2,63

2,62

2,43

2,79

2,74

Table 1: Vietnam rice export data from 2015 - 10/2021 (billion US $) (Source: Trendeconomy n.d, Vietnamcustoms 2021)

Figure 1: Types of rice Vietnam exports from 2017 - 2020 (Source: nongthonmoihatinh 2017)

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Figure 2: Types of rice Vietnam export 2020 (Source: Vietnambiz 2020)

Figure 3: Types of rice Vietnam Export until 5/2021 (Source: snnptntdongthap 2021)

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2015

China

Philippines

Indonesia

Ghana

Malaysia

2016

China

Ghana

Philippines

Indonesia

Malaysia

2017

China

Philippines

Ghana

Malaysia

Cote d’lvoire

2018

China

Philippines

Indonesia

Ghana

Malaysia

2019

Philippines

Cote d’lvoire

China

Ghana

Malaysia

2020

Philippines

Trung Quốc

Malaysia

Ghana

Cota d’lvoire

2021

Philippines

Cuba

Ghana

China

Table 2: Main countries importing Vietnamese rice (OEC n.d, Vietnambiz 2020, 2021)

2015

China

Laos

Thailand

India

Phillipines

2016

China

Laos

Thailand

India

Malaysia

2017

Laos

China

Thailand

India

Myanmar

2018

China

South Korea

Laos

Myanmar

Thailand

2019

China

Myanmar

United States

Thailand

Laos

Table 3: Main countries Vietnam imports rice (OEC n.d)

2015

2016

2017

2018

2019

2020

1-7/2021

2,41

3,04

3,1

2,89

2,21

1,97

1,7

Table 4: Vietnam coffee export data from 2015 - 17/2021 (billion US $) (Source: Trendeconomy n.d, Asemconnectvietnam 2021)

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Figure 4: Types of Coffee Vietnam export 2018

Figure 5: Types of Coffee Vietnam export 2020/2021 (Vietnambiz 2021)

2015

Germany

United States Spain

Italy

Japan

2016

Germany

United States Spain

Italy

Japan

2017

Germany

United States Spain

Italy

Japan

2018

Germany

United States Spain

Italy

Japan

2019

Germany

United States Spain

Italy

Japan

2020

Germany

United States Spain

Italy

Japan

Table 5: Main countries importing Vietnamese rice (OEC n.d, Vietnambiz 2020)

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2015

Laos

Indonesia

China

Brazil

Ethiopia

2016

China

Laos

Indonesia

Guinea

Brazil

2017

Laos

China

Indonesia

Hong Kong

United States

2018

Laos

China

Indonesia

United States Cote d’lvoire

2019

Laos

Indonesia

China

Cote d’lvoire Brazil

Table 6: Main countries Vietnam imports coffee (OEC n.d) According to the examination of marketing channels, the structure of the Vietnamese rice market is a multiplex connection that includes SOEs, farmers, millers, and dealers. Because of the positive association between the parties, the volume of rice imported and exported has remained relatively consistent in recent years, even though world rice production continues to grow. Rice exporters are under a tremendous deal of competitive pressure due to this. Coffee in Vietnam, which has a good climate and soil, has grown steadily in output and area over the years. The processing industry in Vietnam increasingly relies on Vietnamese coffee as a source of raw materials for both internal use and export. The Vietnamese coffee industry is organized as an oligopoly since enterprises that can give similar tastes in coffee goods are few and far between in the country (Sloman, 2016). According to Nguyen (2020), the main thing that affects the rice and coffee market in Vietnam is how the country and other parts of the world trade. Agreements like these can help Vietnam's GDP growth, but they also have drawbacks. When Vietnam signs the arrangements, it will be bound by them and must follow international standards, even though Vietnam's laws don't meet the same standards as the agreements.

B)

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Figure 6: Employment in agriculture in Vietnam 2015 - 2019 (Source: The World Bank 2021)

2015

2016

2017

2018

2019

2020

24,4

28,8

32

35,8

40,78

43

Table 7: Wage in agriculture in Vietnam 2015 - 2021 (million Vietnam dong) (Source: GSO. GOV 2021)

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Total Labour (L) = Lr + Lc The only two choices are coffee (C) and rice (R). The labor and capital involved in producing coffee are represented by Lc and Kc, whereas Lr and Kr represent the labor and capital involved in making rice. Industry structure includes several topics, including the type and number of farms, types of products produced, processing methods and product categories, as well as operational data such as production area and yields as well as market prices as well as farm cash flow and cash flow forecasts for the coming year. Inflation, coffee producers who transfer to other crops, aging plants with limited or no rejuvenation, blind farm methods, elderly farmers, limited access to assured investment assets, and restricted access to finance contribute to reducing productivity. C)

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Vietnam will begin to import coffee since the country is open to free trade and because the world price of coffee is considerably lower than the price in Vietnam. The cost of coffee in the domestic market will fall, resulting in an inward shift of demand from Pc*MPLc1 to Pc*PMLc2. Free trade reduces demand for Vietnamese coffee, and coffee employees cannot migrate to the rice business owing to a lack of particular skills. Thus wages fall from w to w', and some coffee workers lose jobs. W/Pc grows as Pc declines, allowing coffee workers to buy more coffee as Pc drops. W stays the same; thus, rice workers are better off. As a result, once the contract expires and cannot be renewed, coffee industry workers must accept a lesser income or become unemployed following Vietnamese legislation. On the other hand, Rice employees will be better off as a result of the accords. In my view, foreign workers should have their work licenses extended by the Vietnamese government, based on what I've learned. Increasing the competitiveness of both domestic and international employees may be done from there. To assist domestic employees improve their skills and raising their wages, it is crucial to increase the competitiveness of

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enterprises, which in turn may help businesses grow in particular industries.

Question 2. A) In the past two years, the outbreak of Covid 19 has heavily affected the Vietnamese rice and coffee industry in various ways. Due to the contagious pandemic, the coffee and rice supply chain is severely disrupted, from harvesting to producing and delivering. As we can see from the table, when covid first took its toll on Vietnam in 2019, the export value witnessed a considerable fall in both industries. The export turnover has been rising since then but still has not reached the desired level like before the pandemic as companies and production units can still not fully adapt to the “new normal” caused by Covid 19.

Product Rice

Export

2018

2019

2020

2.9

2.43

2.8

3.3

2.33

2.5

Value (in billion U.S dollars) Coffee

Export

Value (in billion U.S dollars) Table: Vietnam’s rice and coffee export value from 2018 to 2020 (Source: Vietnam’s Ministry of Agriculture and Rural Development 2021) Many reasons led to the stagnant of Vietnam’s rice export market, but the most important one lies in the supply chain, which was negatively impacted by the pandemic. Companies are having difficulty exporting rice to foreign partners due to the high transportation cost, the lack of empty containers, and extreme precautions against Covid 19 in international ports and border gates (Phan 2021). According to The Ministry of Agriculture

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and Rural Development, more than 1.5 million hectares of rice in the Mekong Delta are ready for harvest, but there are no buyers. This is because companies still have much rice in stock due to the sluggish export situation. The coffee industry witnesses the same problems with the supply chain. Despite the rising trend of coffee prices, companies in Vietnam still struggle because they can not export their products due to the shortage of containers and transport ships, together with strict travel regulations (Tran 2021). Furthermore, companies even have to carry other coffee reserves and labor costs making their financial burden bigger than ever (Van 2021). B) The Regional Comprehensive Economic Partnership Agreement (RCEP) is a free trade agreement that covers various business aspects and helps reduce tariffs, implement trade regulations, and connect the supply chain of member countries (RCEP 2021). Vietnam will benefit significantly from the agreement, especially in agriculture, where many main export products were heavily affected by Covid 19. Besides the tariff reduction, RCEP also makes moving and selling products between member countries easier by simplifying import and export products and rules of origin. This will lift the financial burden of many companies in the coffee and rice industry whose products were immovable due to the disruption in the supply chain caused by the pandemic (NhanDan 2021). However, these advantages are also applied to other members of the agreement. Therefore, the increased competition means that companies must enormously improve their products’ quality and develop adequate knowledge of export markets to benefit from the agreement fully. C) In the rice and coffee market in Vietnam, the streamlining of policy and procedures of RCEP, such as customs and rules of origin, will aid in the reduction of bureaucracy (Samuel 2021). Consequently, it empowers more small and medium-sized enterprises (SMEs) to join the market. Recently, SMEs are 98% of all businesses in Vietnam, granting 40% of GDP (Asian Development Bank 2021). Accordingly, RCEP provides numerous chances for SMEs in the rice and coffee market in Vietnam to advance up the value chain. Additionally, RCEP is excellent news for all investors in ASEAN, China, or other regions. By regulating the origin of a product, RCEP rules of origin can be considered a boost

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of a free trade agreement (Dollar 2020). Investing in numerous places will be easier with streamlined customs procedures, a consistent rule of origin, and increased market access. The unified management of origin in RCEP might reduce costs for corporations with supply chains across Asia and motivate multinationals to all nations in RCEP (Dinh 2021). Therefore, the global value chain occupations within RCEP countries will grow. It would be a paradise for commercial activities with no different and unconnected requirements for each nation (Crivelli 2021). Nonetheless, researchers have emphasized that when the RCEP is implemented, every business in Vietnam will give into great competition both domestically and internationally, including the rice and coffee market (Wilson 2019). D) According to the forecast of the Institute of Policy and Strategy for Agriculture and Rural Development of Vietnam, despite the Covid-19 pandemic, rice and coffee exports are predicted to expand significantly due to the increasing global demands and free trade agreements. As the Vietnam Coffee-Cocoa Association stated, on condition that the export prices of coffee last as high as recently, it could bring 3 billion $ annually (VNA 2021). Export activities in Vietnam generally and rice exports particularly, encountered numerous hard challenges and hurdles in 2020, majority owing to the exceedingly convoluted influence of the Covid-19 pandemic. Facing these challenging circumstances, the Vietnamese government diligently executed various solutions to secure the prevention of Covid-19 or food security and detach the complication of export activities to assist people in consuming rice with the most acceptable quantity and price (Nguyen 2020). Moreover, since there are the difficult circumstances of the Covid-19 outbreak and its rapid spread throughout the world, which increases demand for food in many nations, Vietnam's rice exports have acquired several double opportunities. There are also forecasts that the need for rice reserves in many countries would rise, particularly in important markets such as the Philippines, China, Ghana, or Papua New Guinea. In the meantime, Vietnamese rice export competitors are presently facing numerous challenges (Do 2021). For example, India, because of the weakening Rupee and the Covid-19, leads to an extensive society crisis, damaging logistics. Meanwhile, Vietnam controls the disease, and supplies are plentiful, creating good conditions

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for increased rice exports. In this situation, investors should instead invest in the rice industry in Vietnam.

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References

● ADB 2021, Report and Recommendation of the President to the Board of Directors, February, viewed 4 December 2021, ● Crivelli, P 2021, Making RCEP Successful through Business Friendly Rules of Origin, Asian Development Blog, viewed 4 December 2021,

● Dao 2020, Determinants of Vietnam’s rice and coffee exports: using stochastic frontier gravity model, viewed 4 December 2021,

● Dinh, D 2021, Rules of Origin in RCEP Agreement: Advancement and Convergence, Volume 16, Issue 6, pp. 248-255,

● Dollar, D 2021, What you should know about RCEP, Asia's new trade agreement, Brookings, viewed 4 December 2021, ● Manh, D 2021, Xuất khẩu cà phê của Việt Nam giảm làm ảnh hưởng đến nguồn cung toàn cầu, Lao Động Newspaper, September 16, viewed 4 December 2021,

● Ministry of Agriculture 2021, Báo cáo thống kê,

● Ministry of Agriculture 2021, Deputy Minister Tran Thanh Nam: Government should buy summer-autumn rice, August 05, viewed 4 December 2021,

● Ministry of Industry 2021, Vietnam's rice exports: Opportunities and Challenges,

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viewed 4 December 2021, ● Nguyen 2021, Xuất khẩu gạo tháng 5 và triển vọng tháng 6, Sở NN&PTNT Đồng Tháp, July 08, viewed 4 December 2021,

● Nguyen, K 2020, Opportunities for Vietnam rice, Agribanks, June 03, viewed 4 December 2021, · ● NhanDan 2020, New opportunity from RCEP, December 31, viewed 4 December 2021, ● OEC 2021, Rice in Vietnam, OEC - The Observatory of Economic Complexity, viewed 4 December 2021, ● Phan, M 2021, Khẩn trương tháo gỡ khó khăn trong tiêu thụ, xuất khẩu gạo, Báo Chính Phủ, August 14, viewed 4 December 2021, ● RCEP 2021, About, ● Samuel, P 2021, RCEP and Vietnam: New Opportunities for Investors, Vietnam Briefing, November 10, viewed 4 December 2021, ● Sloman, J, Garrett, D 2016, ‘Essential of Economics’, Pearson,

● Tran, L 2021, Covid-19 đẩy giá cà phê năm tới tăng cao, TuoiTre Online, September 19, viewed 4 December 2021, ● Trend Economy 2021, Vietnam Import and Exports, World, Coffee, coffee substitutes, Value (US$) and Value Growth, YoY(%), 2009-2020, November 14, viewed 4 15

December 2021, ● Trend Economy 2021, Vietnam Import and Exports, World, Rive, Value (US$) and Value Growth, YoY(%), 2009-2020, November 14, viewed 4 December 2021,

● Uyen, K 2020, Top 10 thị trường thế giới nhập khẩu gạo Việt Nam nhiều nhất 9 tháng 2020, Vietnam Securities Economic Magazine, November 04, viewed 4 December 2021, ● VICOFA 2021, Country Coffee Profile: Vietnam, Vietnam Coffee - Cocoa Association, viewed 4 December 2021, ● Vietnambiz 2020, Báo cáo thị trường gạo năm 2020,

● Vietnambiz 2020, Top 10 thị trường nhập khẩu cà phê Việt Nam nhiều nhất 6 tháng 2020, August 11, viewed 4 December 2021, ● Vietnambiz 2020, Top 10 thị trường nhập khẩu cà phê Việt Nam nhiều nhất 6 tháng 2020, ● Vietnambiz 2021, Báo cáo thị trường cà phê quý 2 2012,

● Vietnambiz 2021, Báo cáo thị trường cà phê tháng 8 2021,

● Vietnambiz 2021, Báo cáo thị trường gạo quý 1 2021,

● VITIC 2021, Vietnam's coffee exports in first 7 months of 2021, ASEM Connect Vietnam, August 09, viewed 4 December 2021,

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● VNA 2021, Vietnam's coffee export predicted to grow higher, November 26, viewed 4 December 2021, ● Wilson, J 2019, What's the deal about rules of origin in the RCEP negotiations, Perth USAsia Center, July 08, viewed 4 December 2021,

● World Bank 2021, Employment in agriculture (% of total employment) (modeled ILO estimate) - Vietnam, January 29, viewed 4 December 2021,

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