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Impacts of The EU-Vietnam Free Trade Agreement on Vietnam’s alcoholic beverage imports from the EU: An application of wits-smart simulation model

By Nguyen Le Dong Xuan (VNP 24)

Supervisor: Dr. Pham Khanh Nam

Abstract:

Applying WITS-SMART simulation model, the research examines on the EVFTA’s ex-ante impact assessment on trade flows and tariff revenue to Vietnam as a result of tariff elimination on alcoholic beverage imported from the EU. The simulation results show the EVFTA would lead to a significant increase trade creation and the Vietnamese government shall incur a tariff revenue loss. The results also reveal that Vietnam would increase considerably in alcoholic products imports including HS 220820 (Spirits), HS 220830 (Whiskies), HS 220421 and HS 220429 (Wine of fresh grapes), and HS 220300 (Beer) from three main countries in European region which are France, the United Kingdom and Italy when Vietnam has completed tariff elimination commitments under the EVFTA.

Basing on the found results, the research suggests that Vietnamese government should consider to issue reasonable policies. These policies should satisfy purposes including prevention against alcoholic beverage import’s harmfulness to public health, finding substitute source of tax revenue and the avoidance of imposing trade barriers violating the EVFTA’s commitments. 

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