FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS ---------***-------- MID-TERM ASSIGNMENT Major: International Business Economics Subject: International Trade Policy TRADE POLICY IN JAPAN AND ITS IMPACT ON TRADE RELATION WITH VIETNAM Supervisor: Class: Ho Chi Minh, November 2021 FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS ---------***-------- MID-TERM ASSIGNMENT Major: International Business Economics Subject: International Trade Policy TRADE POLICY IN JAPAN AND ITS IMPACT ON TRADE RELATION WITH VIETNAM Supervisor: PhD. Trần Nguyên Chất Class: K59CLC5 Group 9 Student ID Trần Lưu Thanh Thảo 2011156096 Trần Anh Thư 2011156099 Hoàng Lê Phương Thảo 2011155544 Phan Quang Thịnh 2011155571 Phạm Đăng Thái 2011156094 Ho Chi Minh, November 2021 i TABLE OF CONTENT TABLE OF CONTENT.i LIST OF ABBREVIATION WORDS.iv LIST OF FIGURES.vi LIST OF TABLES.vii MAIN CONTENT. The rationale of the Research. Aims and Objectives.
Aims of the research. Objectives of the research. Research scope and objects. Structure of the research.
OVERVIEW OF JAPAN'S CURRENT ECONOMY AND ITS ECONOMIC RELATION WITH VIETNAM. Fundamentals of trade policy. Definition and objectives of trade policy. Two tendencies of trade policy.
Some main instruments of international trade policy. Brief introduction to Japan. Overview of trade relation between Vietnam and Japan. ANALYSIS ON TRADE POLICY IN JAPAN.
Overall history of trade policy in Japan from 1945 to 2010. Analysis on trade policy in Japan from 2011 to 2020. Non-tariff measures (NTMs). Data on non-tariff measures in Japan.
Details about Japan’s NTMs in each category. Comparison with WTO regulations. Impact of trade policy in Japan on trade relations with Vietnam. Impact of Japan’s tariff on Vietnam’s export.
Impact of Japan’s non-tariff measures on Vietnam’s export. FINDINDS and CONCLUSIONS. Opportunities and threats for Vietnam. Implications for Vietnamese government and firms.33 iii LIST OF ABBREVIATION WORDS Abbreviation Definition AHS Effectively Applied Tariff AJFTA Asean-Japan Free Trade Area ASEAN Association of Southeast Asian Nations BND Bound Tariff CKD Completely Knocked Down Comprehensive and Progressive Agreement for Trans-Pacific CPTPP Partnership EPA Economic Partnership Agreement EU European Union FSCJ Food Safety Commission of Japan FTA Free Trade Agreement GDP Gross Domestic Product GNP Gross National Product GSP Generalized System of Preferences IMF International Monetary Fund IWC International Whaling Commission JAS Japanese Agricultural Standards JIS Japan Industrial Certification LDC Least Developing Country LTD Limited company MFN Most-Favored Nation Tariff iv MOIT Ministry of Industry and Trade MRL Maximum residue level NTM Non-tariff measure ODA Official Development Assistance RCEP Regional Comprehensive Economic Partnership SPS Sanitary and phytosanitary TBT Technical Barriers to Trade UNCTAD United Nations Conference on Trade and Development VJEPA Vietnam-Japan Economic Partnership Agreement WITS World Integrated Trade Solution WTO World Trade Organization v LIST OF FIGURES Figure 3.1: Weighted Average Tariffs In Japan From 2011 To 2020.2: Simple Average Most-Favored Nation Tariff And Effectively Applied Tariff.3: Weighted Average Most-Favored Nation Tariff, By Sector.4: Japan’s NTMs indicators in importation.
of NTMs available in Japan.6: Indicators of NTMs by type in Japan.15 vi LIST OF TABLES Table 3.1: Tariffs on Major Vietnamese Exports to Japan in 2020.2: Vietnam’s exportation and Japan’s importation of some products in HS 2 digits in 2019 and 2020.3: Vietnam’s exportation and Japan’s importation of rice in 2019 and 2020. of NTMs and No. of SPS measures in rice’s products.24 1 MAIN CONTENT Chapter 1. The rationale of the Research As a developed country with plenty of economic achievements and breakthrough transformations, Japan has always been standing out as one of the top economies in the world.
With free trade and multilateral institutions, Japan is the third-largest economy according to nominal GDP and fourth-largest by purchasing power parity nowadays. The Japanese government recognized that trading was a potential factor and an important issue for economic development. The relationship between Japan and Vietnam has been thriving since 1992, in a huge number of fields and an astonishing number of milestones, ranging from economics, politics, cultural exchanges. With the unstopping collaborative activities, the strong relationship was shaped between Japan and Vietnam with knowledge, cultural understanding, and support in every field.
Japan is the leading economic partner of Vietnam. Thanks to foreign direct investment from Japan, Vietnam had the base, budget, and foundation to develop the economy from infrastructures, capital, and so on. Moreover, Japan is the largest ODA donor and the fourth-largest trading partner of Vietnam. According to Japan, Vietnam is the most ideal and attractive destination for investment in ASEAN with plenty of potentials and opportunities.
The relationship between these two countries is continuously being strengthened and recognized. In this COVID pandemic, the Japanese government put a large amount of effort to support and assist Vietnam to overcome the alarming and difficult situation, such as one million doses of the COVID vaccine. With the support from Japan, Vietnam has a lot of potential to develop its economy, however, to strengthen the long-lasting relationship with Japan, understanding the trade policy guarantees the relationship between the two countries and maximization of 2 economic benefits. This paper involves the current Japanese economic status, economic relationship with Vietnam, and mainly discusses trade policy in Japan.
Aims and Objectives 1. Aims of the research This study was first conducted to understand the trade policy in Japan and how it affects Vietnam trading in general. Thanks to having a clear insight into the trade policy of Japan, this research is made to conclude challenges, opportunities, and implications for Vietnam on the way to building and strengthening the long-lasting and sustainable relationship with Japan. At the same time, strongly understanding the trade policy of a country equips readers with knowledge and preparation in face of changes from external factors such as Covid-19.
Objectives of the research While doing this research, we aim to build the theoretical basis and data evidence so that readers can have a clear insight into the changes and highlights in the trade policy. From that, we have the reflection on the economic status relationship with Vietnam to point out promising challenges and advantages of Vietnam in the relationship with Japan. Research scope and objects 1. Research scope The study focuses on analyzing the changes in Japan's trade policy in terms of tariff and non-tariff measures from 2011 to 2020.
There will also be an insight into the comparison with WTO regulations. The research was conducted in Vietnam, based on the data and calculation mainly on WITS, UNCTAD and WTO. Research objects In this study, our team focuses on analyzing the Japanese trade policy through published data and figures, export and import situations. Moreover, we also discuss the relationship between Vietnam and Japan.
Another important factor is the impact of 3 Japan’s trade policy on the Vietnamese economy, with challenges and opportunities for the government and firms. Research questions This research follows strictly these questions: 1. How has Japan's tariff profile changed over the past 10 years? 2. What are the most important aspects of a Japanese trade policy? 3.
Are there any violations between Japan policy and WTO regulations? 4. How does Japan's trade policy affect the trade relation with Vietnam? 5. What are the threats, opportunities, and implications for Vietnam when trading with Japan? 1. Research methods The science methods used in this research: - Research calculation methodology.
- The inherited method in order to achieve information and data from research documents and existing research has been related to this research topic; perform document review related to policy documents to systematize the issues raised. - Analysis and synthesis method in suitable theory. - Qualitative research methods: gathering and filtering secondary data mainly from United Nations Conference on Trade and Development (UNCTAD), World Integrated Trade Solution (WIST), and World Trade Organization (WTO). Structure of the research Except for the preface, the references, tables of content, and abbreviated words pages, the main content is divided into four chapters: - Chapter 1: INTRODUCTION.
The first chapter provides a general overview of the research work, showing the research direction and research angle such as the object, scope, and sentence. ask for research, … 4 - Chapter 2: OVERVIEW OF JAPAN'S CURRENT ECONOMY AND ITS ECONOMIC RELATION WITH VIETNAM. The study provides several basic theoretical foundations about trade policy as well as the general profile of Japan's economy and its relation with Vietnam related to current economic aspects such as population, GDP, import-export value, … - Chapter 3: ANALYSIS ON TRADE POLICY IN JAPAN. In terms of trade policy, research focuses on analyzing data and information on tariff and non-tariff measures.
As for the comparison with WTO, the paper mainly discusses the exceptions of negotiation to achieve freer trade in general. - Chapter 4: FINDINGS AND CONCLUSIONS - the last chapter. Synthesize the remarkable reviews and evaluations from chapter 3 and give findings and implications. OVERVIEW OF JAPAN'S CURRENT ECONOMY AND ITS ECONOMIC RELATION WITH VIETNAM 2.
Fundamentals of trade policy 2. Definition and objectives of trade policy Trade policy is a system of opinions, principles and appropriate methods of a country which is used to govern international trade activities in a particular period, in order to achieve the economic goals of that country. Trade policy, nowadays, is a tool which can facilitate domestic enterprises to enter and expand their business to foreign markets. On the other hand, trade policy is expected to protect the domestic market and make use of comparative advantages of the domestic economy.
Therefore, trade policy is also considered as the external policy of a country. Two tendencies of trade policy Since the appearance of Mercantilism, there have been 2 schools of trading: free trade and protectionism. Governments with free trade policy try to reduce their intervention to trading. The free trade school suggests that the government should gradually cut down tariff and non-tariff barriers in trading relations with foreign countries, in order to stimulate international commerce.
Meanwhile, protectionism encourages governments to require some strict standards such as quality, hygiene, safety, labor or origins and apply high tariffs with some imported goods to protect the same domestic goods (or services). Trade policy, nowadays, is a term which lies between extreme free trade and extreme protectionism. Depending on particular goods, services or partners, a country can choose appropriate trade policies to gain the highest benefits. Some main instruments of international trade policy In the modern trading model, there are various tools which governments can use to interfere with imported or exported goods.
In common sense, they are divided into 2 groups: tariff and non-tariff measures. 6 Tariff measures are the lists of all duties and taxes applied for imported goods. Only custom duties and taxes with equivalent effects can be considered tariffs, because they are levied on imports but not on domestic products. This creates a bias against imports and in favor of locally produced goods and generates revenues for the government.
However, tariff measures can do harm to local consumers by increasing the domestic prices of the imported goods and eventually they reduce the nation’s real purchasing power. Non-tariff instruments include all measures other than custom duties such as requiring strict technical standards about quality, hygiene, safety of imported goods, import quotas and license. Unlike custom duties, non-tariff measures do not provide income for governments; however, they also lead to higher domestic prices that penalize consumers and give local producers an advantage. Compared to tariffs, non-tariffs are politically accepted and the level of protection in this way is very high.
Brief introduction to Japan Japan is a sovereign island nation in the East Asia region and located in the Pacific Ocean. The five main islands, Honshu, Hokkaido, Kyushu, Shikoku and Okinawa, cover about 97% of the country's land area, but much of it is just forests and mountains with very limited mineral resources. In November, 2021, Japan's population is estimated at 125,9 million people, ranking 11th in the world and it is the second most populous island nation in the world. The economy of Japan is a highly developed free-market economy.
It is the third- largest in the world by nominal GDP and the fourth-largest by purchasing power parity (PPP). Besides, Japan is the world’s second largest developed economy.