General

The Affect of Bilateral Trade Agreement between Vietnam and the U.S. on Medium

and Small Vietnamese Firms That Export Goods to the U.S.

Table of Contents

Abstract 2

Introduction 3

Literature Review 5

Methodology 6

Results 12

Conclusion 20

Abstract

Few studies have examined the impact of the Bilateral Trade Agreement (BTA) in 2000-2001 between Vietnam and the U.S. on Vietnamese firms. This paper analyzes the affect of the BTA on small and medium sized Vietnamese firms that export to the U.S. market. Both qualitative and quantitative methodologies have been used for research, relying on secondary data sources, macroeconomic and firm level. The signing of the BTA resulted in a significant increase in the value of Vietnamese exports to the U.S. during all years following the agreement. This paper investigates how the surge in the Vietnamese export sector has encouraged more small and medium scale enterprises in Vietnam to enter the export market. The microeconomic data also indicate that expanded export opportunities in Vietnam have had a favorable impact on the production and investment of indigenous firms.

Introduction

Vietnam became a member of the Association of Southeast Asian Nations (ASEAN) in 1995. Vietnam signed a BTA with the U.S. on 13 July 2000; the agreement went into effect on 10 December 2001. This agreement was part of the ongoing economic reform process in Vietnam and contributed significantly towards the country gaining membership in the World Trade Organization. The U.S. Congress approved a Permanent Normal Trade Relations (PNTR) agreement with Vietnam in 2007. This paper analyzes the influence of the signing of the BTA on the performance of domestic Vietnamese small and medium scale enterprises (SMEs) that were engaged in exporting to the U.S. market. The SMEs occupy a significant position in the economy of Vietnam and it is important to know the effect of the BTA on SMEs.

The paper first...