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ĐẠI HỌC QUỐC GIA HÀ NỘI

TRƯỜNG ĐẠI HỌC KINH TẾ


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COURSE: INTERNATIONAL TRADE

(INE 3001 E)

FINAL ASSIGNMENT

Instructor: Dr. Vu Thanh Huong

Assoc.Prof. Dr. Nguyen Dac Hung

Name of student: Nguyễn Thị Hương Giang

Date of birth: 06/07/2001

Student ID: 19051059

Hà Nội, 2021
Course: International Trade
(INE 3001 E)

Student
Nguyễn Thị Hương Giang (Student ID: 19051059)

Word count
………(Excluding Tittle Page, Table of Contents and References)

Course coordinator
Dr.Vu Thanh Huong
Assoc.Prof.Dr.Nguyen Dac Hung.

Date of submission:
13/07/2021

Plagiarism statement
“I confirm that this assginment is entirely my own work and not been submitted in full
or in part for any other course within or outside UEB. I confirm that all references are
duly acknowladged.”

Signature: Giang.

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CONTENTS
Question 1:..................................................................................................................................3
1.1.           Analyze and assess trade policies of a country in the context of Covid-
19 pandemic............................................................................................................................. 3
1.1.1. Policies on support for businesses...........................................................................3
1.1.2. Policies on increasing public investment capital.....................................................3
1.1.3.     Policies on social security support..........................................................................4
1.1.4.  Interest rate policies...................................................................................................4
1.1.5 Policy on debt restructuring, loan interest exemption/reduction business
support.................................................................................................................................. 4
1.1.6. Credit support policy from the banking industry.........................................................5
1.1.7. Policy of taxing goods.................................................................................................6
1.2.  Using theory of international trade policies to explain why the country used
this policy................................................................................................................................. 6
Question 2:..................................................................................................................................7
2.1. Evaluate the roles of the WTO in the Covid-19 pandemic. Identify two
measures that the WTO should do to improve its roles in the current world
economy? (2 points)................................................................................................................. 7
2.1.1 The roles of the WTO in the Covid-19 pandemic..........................................................7
2.1.2. Two measures that the WTO should do to improve its roles in the current
world economy...................................................................................................................... 8
2.2. Using practical data, analyze 2 benefits and 2 losses for Vietnam when
joining a specific FTA.............................................................................................................9
2.2.1. Three benefits..............................................................................................................9
2.2.2. Two Losses................................................................................................................11
REFERENCES........................................................................................................................13

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Question 1:
1.1.           Analyze and assess trade policies of a country in the context of Covid-19
pandemic
The COVID-19 pandemic is causing challenges to Vietnam's economy as well as
commercial activities. Faced with difficulties, the Vietnamese government has
launched trade policies to strengthen the country's resilience (tolerance) of the
economy; prepare enough capacity to cope with prolonged epidemics; thereby
enhancing potential for quick economic recovery right after the epidemic controlled to
prevent the economy from falling into recession.
Some of Vietnam's trade policies applied during the covid-19 pandemic are as follows:
1.1.1. Policies on support for businesses
-  Reducing VAT to 0%
- Extension of tax payment and land rent for affected subjects affected by the
COVID-19 pandemic. This is the policy issued under the government's decree No.
41/2020/ND-CP dated April 8, 2020. According to this decree, more than 740
thousand businesses and business individuals that cease to operate will be extended to
pay taxes and land rent with a total expected amount of up to 180 trillion VND.
However, the number of enterprises entitled to this policy is not significant, for a
number of reasons such as the tax extension time is too short, the production and
business can't deploy, so many businesses don't have taxes, especially small and micro
enterprises,...
- Land tax reduction for businesses, including profitable businesses, organizations,
households, and individuals are benefiting or being less affected, but not for businesses
are struggling due to the COVID-19 pandemic. Therefore, the income tax incentives
are not really aimed at businesses the industry is facing difficulties due to the
epidemic, so it is a method of inappropriate support, wasting resources that are
currently very limited at the same time, creating inequality in the business community
business, and may worsen the business environment.
1.1.2. Policies on increasing public investment capital
Promoting disbursement of public investment capital is an important trade policy of
the Vietnamese government in 2020 and early 2021. This solution has brought positive
signals such as the implementation of social investment capital 9. May 2020 increased
by 4.8% over the same period in 2019, the lowest increase in the 2016-2020 period

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due to the negative impact of the COVID-19 epidemic on all production and business
activities. However, the disbursement of investment capital still has difficulté:
+ Compensation for site clearance faces many difficulties
+ Investors do not want to disburse many times, do procedures for capital settlement
many times. Therefore, capital disbursement is usually done at the end of the year.
+ Projects using ODA loans and concessional loans from foreign donors were heavily
affected by the pandemic, so the progress of projects using this form of ODA loans
was also delayed.
1.1.3.     Policies on social security support
Social security policy according to Resolution No. 42/NQ-CP April 9, 2020, on
support measures and Decision No 15/2020/QD-TTG stipulating the implementation
of support policies supporting people in difficulty due to the COVID-19 pandemic.
To minimize the risk of possible adverse effects impact, several neighboring
governments implemented policies to support affected individuals. These policies
including proactive employment support, social insurance measures to stabilize
employment support, and social assistance for the poor and vulnerable to reduce
shocks caused by such disruptions.
-  Exemption or postponement of insurance premiums (including unemployment
insurance) for employees for a period of time.
-  Reducing eligibility for benefits and simplify benefit processing steps for those
affected or who have lost their jobs
- Using private insurance funds to subsidize wages for businesses, especially small and
medium-sized enterprises, for the purpose of stabilizing jobs
- Actively support employment
- Supporting for the poor and vulnerable to mitigate the shocks caused by the covid19
pandemic
1.1.4.  Interest rate policies
To deal with the negative impact of the epidemic COVID-19, the State Bank has been
proactive and continuously reduced interest rate operating to remove difficulties for
production and business, support liquidity support for credit institutions, reducing
borrowing costs of businesses and citizens.
The solution to lowering interest rates in the current context is not really effective in
stimulating loans for production and business because most businesses are affected by
both inputs and outputs. The number of needs has almost completely disappeared due
to the influence of the pandemic. In addition, the interest rate reduction only applies to
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the new loans, while the business's borrowing needs are low businesses do not fully
meet the loan criteria, such as: have collateral, financial situation, or business plan
good business. Many businesses have overdue debts at banks, so cannot get a new
loan.
1.1.5 Policy on debt restructuring, loan interest exemption/reduction business support
Vietnam Government has issued Circular 01/2020/TT-NHNN dated March 13, 2020
debt restructuring, loan interest exemption/reduction businesses affected by the
pandemic. This is considered an effective measure to control bad debt during this
period. The fact that you do not have to transfer past due debts and get keeping the
debt group unchanged not only helps banks avoid deductions provision for credit risks,
but also not having to withdraw accounts accrued interest has arisen and will continue
to arise from this loan, but still not collected. Another positive point of this provision
is not like bad debt incurred in the previous period coming from the housing market,
real estate projects are inflated value - loans that have the potential to become bad debt
today are due to affected by the epidemic, mainly in customers with active actual
commercial or production activity, with the collateral being a house workshop, goods.
However, the difficulties and obstacles of this policy are only disbursements made
before January 23, 2020, will have debt classification results according to the State
Bank's regulations at the nearest time before January 23, 2020. Circular 01 does not
apply for outstanding balance disbursed after January 23, 2020. Keeping the same debt
groups can cause bad debt rates to not be fully reflected in the financial statements of
credit institutions.
1.1.6. Credit support policy from the banking industry
The State Bank has issued documents (Notice No. 35/TBNHNN dated 7/2/2020,
Document 479/NHNN-VP dated 3/1/2020, 541/NHNN-TD dated 4/2/2020,
1117/NHNN-TD dated February 42, 2020, 1425/NHNN-TDCNKT dated March 6,
2020) directing banks to balance capital sources and save operating costs to carry out
debt restructuring, loan interest exemption/reduction, payment fee has just been
considered for new loans to serve production and business of enterprises and
conductors; regularly monitor and evaluate the situation of loan customers to promptly
and effectively implement support measures; stabilize deposit and lending interest
rates; timely response to the payment needs of the people. Credit support package of
commercial banks, worth VND 250,000 trillion, according to which, banks committed
to implementing a credit support package with an interest rate lower than 2% per year
compared to the time before the epidemic. By October 2020, the amount of capital that
banks have committed to participate in this credit support package has reached more
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than 600,000 billion VND, much higher than the 250,000 billion VND given in
Directive 11/CT-TTG of the Prime Minister.
The credit support policy for businesses affected by COVID-19 is currently showing
many inadequacies in the implementation stage when businesses that want to access
this support have to meet complicated procedures with great costs. including
preparation of audit reports, damage assessment, the self-evidence of liquidity, and
ability to repay debts after debt restructuring. With these procedures, the group of
small and medium enterprises - the group that needs the most support, maybe the most
difficult to access policies. Fear of implementation responsibility can also delay
support progress.
1.1.7. Policy of taxing goods
According to the trade theory, imports in a little nation should expand homegrown
costs and not influence world costs. At the point when homegrown costs increment, it
will be hindering to buyers, useful to organizations when costs increment, they will
zero in on creation more. Simultaneously, government income builds because of tax
collection. Applying the hypothesis to the instance of Viet Nam, the high expense on
extravagance merchandise lessens brings into Viet Nam, organizations will exploit the
present circumstance to grow creatively, produce more, and procure more benefits.
The high expense on these things expands the cost of extravagance items, hitting the
inclinations of big-league salary customers, so the Viet Nam government builds the
income for its spending plan however the purchasers will lose more. Accordingly, the
utilization of this arrangement temporarily, helping the Viet Nam government and a
few organizations will be productive. Be that as it may, in the long haul, these
organizations may encounter decreased productivity because of the absence of rivalry,
and may likewise encounter diminished benefits because of the presence of substitutes
for their items.
1.2.  Using theory of international trade policies to explain why the country used
this policy
The Vietnamese government offers these solutions because it is suitable for Vietnam's
economic and trade mechanism, and is based on theories of international trade to bring
the most beneficial solutions for businesses. during a pandemic that is spreading
around the world.
-   With policies on supporting business: As the ongoing coronavirus outbreak is
threatening to stall economic growth, countries are taking actions to soften the impact
on their economies, including tax reliefs to affected industries and businesses). The
following table provides a quick assessment of potential tax instruments that the
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Government could consider to relieve the most affected sectors. According to
international trade theory, the extension of time to pay taxes and land rent, and at the
same time reduce the amount of land tax payable, will help businesses have more
capital to continue their business operations, pay salaries Although this policy has not
been properly applied in Vietnam, it has initially brought many good signals to
stabilize the domestic trade situation.
-   With policies on social security support: According to international trade theory,
social security policies such as support for employment of workers, support for labor
insurance and workers' body insurance, etc. will be supported. ensure the stability of
the business, avoid the shortage of workers, the labor force in enterprises, companies,
factories, If Vietnam has an unemployment insurance scheme in place that could
potentially be used to soften employment-related shocks associated with the COVID-
19 outbreak. However, measures will need to be put in place to overcome the scheme’s
drawbacks such as limited coverage, lengthy application procedures, and low take-up
of vocational training. On the other hand, the strengths of the scheme include UI fund
surpluses provide potential options based on international experience. These policies
include proactive employment support, social insurance measures to stabilize
employment, and social assistance support to the poor and vulnerable to mitigate the
shocks caused by such disruptions.
-  With policies on payments: Encouraging e-commerce and e-payments to
compensate growing barriers on physical mobility. This would help ensure that
households and businesses continue to receive food supplies, medicine, and other
goods and services. E-commerce is growing in Vietnam and is expected to grow from
the US. As has been recently demonstrated in the case of China, where schools and
offices were closed and people were required to stay in their homes, e-commerce has
been vital, especially in the large urban areas such as Beijing to ensure that households
and businesses have access to deliveries of vital goods and services while minimizing
human to human contact. For e-commerce to function in such a situation, the use of
cash (which requires access to physical ATMs or banks) would be limited and
transactions would have to be through e-payments due to the need to limit human to
human contact and the obviously limited access to cash through ATMs and banks
(both of which would either be inaccessible or run out of money).
 

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Question 2:
2.1. Evaluate the roles of the WTO in the Covid-19 pandemic. Identify two measures
that the WTO should do to improve its roles in the current world economy? (2
points)
2.1.1 The roles of the WTO in the Covid-19 pandemic.
Going into this global battle for survival, the WTO has been badly affected by the shift
in unilateralism that has caused and intensified global economic nationalism.
However, the WTO still has a great contribution and role to play in the fight against
the pandemic worldwide
The role the organization has played - and continues to play - in mitigating the
economic shock of the COVID-19 pandemic, and thus mitigating its negative effects,
deserves more attention. . The WTO helped with this blow in three ways:
By helping members coordinate their trade policies; second, by transparency regarding
pandemic-related measures; and finally, by monitoring members' commercial
responses to the pandemic.
 
Firstly, the COVID-19 pandemic arrangements an incomprehensible hit to the
worldwide exchange system, by upsetting stock chains and at the same time provoking
more noteworthy interest for fundamental items. Accordingly, nations have confined
fares of things including drugs, drugs, diagnostics, medicines and food items, to
address extreme deficiencies at the public level. As of April 23, 2020, 80 separate
nations and customs regions have presented send out boycotts or limitations, and a lot
more are going with the same pattern. Fare limitations are a need for individual
defensive gear, drugs, food, clinical hardware and COVID-19 testing units.
Secondly, a significant capacity performed by the WTO in the midst of an emergency
is to keep up with straightforwardness. Nations that are individuals from the WTO
should promptly inform any quantitative limitations (QRs, for example, send out
limitations forced by them to the WTO in regards to the "Choice on notice methods for
quantitative limitations" " (QR choice) 2012. Nonetheless, because of the strange idea
of the pandemic, an enormous number of nations didn't quickly advise about their
inappropriate behavior measures. As of April 2020, just 13 WTO individuals (39 if EU
part states are incorporated) have reported new measures under the QR choice and 3
have declared fare limitations on groceries. with respect to 12 of the Agreement on
Agriculture.

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Finally, WTO individuals can all things considered screen nations' approach reactions
through the WTO's Trade Policy Review (TPR) Mechanism. The component is an
apparatus that "gives the chance to an aggregate audit of individual individuals'
exchange strategies and practices." While this is certainly not a pandemic-explicit
device, its objective "is to add to further developing consistency by all individuals with
the guidelines, controls, and responsibilities settled on as per Multilateral Trade
Agreements… " The "weight" of a part in the multilateral exchanging framework "as
characterized by the part's portion of the overall industry in world exchange labor and
products" decides the recurrence of such thought. Contingent upon this "weight," the
appraisals occur at regular intervals or over numerous years or six years.
Notwithstanding the typical utility, this instrument is additionally used to follow
individuals' business reactions to the pandemic. Most as of late, India had TPR on 6
and 8 January 2021. This survey does not just examine India's approaches in the
course of recent years yet, in addition, India's pandemic reaction strategies. Degrees
incorporate 'Atmanirbhar Bharat Abhiyan,' levy measures, conceded installments in
the power area and conceded installment of port expenses.
More than half a century since the General Agreement on Tariffs and Trade (GATT),
the WTO was set up 25 years ago to provide global solutions to trade, including things
like this. . Viruses know no borders, this includes the respective relationship between
viruses and trade.
 
2.1.2. Two measures that the WTO should do to improve its roles in the current world
economy
The World Trade Organization (WTO) fills in as where exchange strategy issues are
tended to, debates parleyed, lawful structures determined and upheld. Through these
capacities, the WTO guarantees that the guidelines of exchange strategy are enlivened
by decency and correspondence instead of public premium. It is critical to vitalize the
worldwide public great that it addresses against different dangers that have been
subverting it. The Bertelsmann Stiftung's Expert Board on the Future of Trade
Governance has delivered a report that expounds on a progression of attainable
approach proposals that will build the viability and notability of the WTO.
I will give 3 measures that I think WTO should do to improve its role in the current
economic world.
-    Rebalancing of administration framework: The WTO is excessively amazing and
due to the demand of numerous individuals the lone body that is permitted to make
exchange rules, with a consistently developing command because of an extremely
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broad translation of what is exchange related. As of now the solitary rapprochement
with different associations is being finished with the WB and IMF with a reasonable
danger that progression and just advancement turns into the extraordinary mantra of
monetary administration. This is not really maintainable. Different foundations in the
UN framework, which have a reasonable command on issues identified with
improvement, should be heard and put at a similar degree of significance as the WTO,
the IMF, and the World Bank so strategy space, wellbeing, climate, work are
appropriately considered as a feature of worldwide financial administration. This
would consider a more adjusted and greater arrangement of rules and approaches and
furthermore diminish the tension on the WTO to save multilateralism.
- Improved specialized help to non-industrial nations just as different measures to
work with their full investment (subsidizing/admittance to autonomous exhortation
like UNCTAD yet additionally cash to recruit specialists). Association of ministerial in
Geneva
-   Improved outer straightforwardness at the public and global level is expected to
work on the quality and authenticity of WTO rules
2.2. Using practical data, analyze 2 benefits and 2 losses for Vietnam when joining a
specific FTA.
Vietnam has used its participation in international free trade agreements as an
instrument to ensure increased economic power and financial security. The
liberalization of trade brings a lot of benefits to Viet Nam, boosting the economy and
bringing that country quickly integrate into the world economy.
2.2.1. Three benefits
Firstly, participating in free trade agreement eliminating tariff and non-tariff barriers
hindering the exchange of goods and services, in line with the trend of
internationalization of economic life, globalization, and economic regionalization.
Thanks to the commitment to remove trade barriers, member countries' businesses are
allowed to freely exchange and trade goods, without being subject to quotas and a
number of other complicated procedures that businesses in other countries have.
Different countries can freely exchange and cooperate. Since then, export turnover has
also increased, leading to the income and GDP growth of these countries, promoting
economic development. In addition, the removal of these barriers also creates stiff
competition among enterprises in a broader market. When trade liberalization is
expanded, tariff costs will be reduced, thereby having a great impact on the importers’
business activity is their ability to import products at a lower cost due to reduced
tariffs.
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For Vietnam, the elimination of non-tariff barriers and the expansion of free trade have
brought extremely feasible results to the country's economy. Key aspects of the
EVFTA are the removal of customs barriers and the facilitation of European-
Vietnamese trade relations. After the official entry into force of the free trade
agreement, approximately 65 percent of EU exports to Vietnam and around 70 percent
of EU imports from Vietnam will be exempted from customs duty immediately. The
remaining customs obligations are to be abolished in perspective over a path of 10
years (99 percent duty exemption) and 15 years (99.8 percent duty exemption), with
the exception of crude oil and coal. From this example, it can be said that nearly 100%
of Vietnam's exports to the EU will be eliminated import tax after a short journey. So
far, this is the highest level of commitment a partner gives us in the signed FTAs. This
benefit is especially meaningful when the EU is continuously one of the two largest
export markets of our country today.
Secondly, enable Viet Nam’s economic development to continue to shift away from
exporting low-tech manufacturing products and primary goods to more complex high-
tech goods like electronics, machinery, vehicles, and medical devices.
Free trade contributes to restructuring the current import and export, enabling
countries to diversify many export products to the world market.
A specific example of this benefit is the impact of EVFTA on Vietnam's import and
export activities. EVFTA facilitates the restructuring of export and import markets:
Currently, Vietnam's import and export activities are mainly with the Asian region
(accounting for about 80% of import turnover and 50% of export turnover). The
EVFTA will help businesses penetrate and exploit new markets, which still have a lot
of potential for Vietnam's exports. According to the Ministry of Industry and Trade
(MoIT), Vietnamese enterprises have quickly approached and taken advantage of
opportunities arising from EVFTA, bringing the trade surplus to US$ 4 billion in the
first two months of 2021, up 36.3% over the same period last year.
Finally, free trade helps to recover and develop the economy of some countries.
There is considerable evidence that more outward-oriented countries tend consistently
to grow faster than ones that are inward-looking. Indeed, one finding is that the
benefits of trade liberalization can exceed the costs by more than a factor of 10.
Countries that have opened their economies in recent years, including India, Vietnam,
and Uganda, have experienced faster growth and more poverty reduction. On average,
those developing countries that lowered tariffs sharply in the 1980s grew more quickly
in the 1990s than those that did not. Freeing trade frequently benefits the poor
especially. Developing countries can ill-afford the large implicit subsidies, often
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channeled to narrow privileged interests, that trade protection provides. Moreover, the
increased growth that results from freer trade itself tends to increase the incomes of the
poor in roughly the same proportion as those of the population as a whole. New jobs
are created for unskilled workers, raising them into the middle class. Overall,
inequality among countries has been on the decline since 1990, reflecting more rapid
economic growth in developing countries, in part the result of trade liberalization.
EVFTA helps Vietnam's export turnover to the EU increase by about 20% by 2020. At
the same time, import turnover from the EU also increased but at a slower rate than
exports, namely about 15.28% in 2020; 33.06% in 2025, and 36.7% in 2030. With
that, EVFTA commits to protect all investment deals and investors in a fair, complete,
and safe manner, it makes the investment environment and legal system in Vietnam
more transparent, thus helping Vietnam attract investors from the EU and other
countries.
2.2.2. Two Losses
Besides the benefits when Vietnam joins FTAs, it also brings loose, namely:
Firstly, export is not as expected.
it is necessary to confirm that the FTA opens up many export opportunities, but
Vietnam has not yet fully exploited the advantages of trade in goods. Traditional
production and export products such as textiles, leather, and footwear... are promoted.
However, Vietnam mainly does outsourcing, labor costs are high. Other traditional
commodities such as rice, pepper, cashew, coffee..., with tariff preferences, FTAs open
up opportunities for deeper processing for the industry, but Vietnam has not yet been
able to do so.
Vietnam has not yet exploited all export markets. Expectations to expand the market
with FTAs are very large. However, while exports to new markets have not been done,
in traditional export markets, Vietnam has not been able to exploit its advantages to
promote the export of a number of potential products. exporting chili, garlic, onions...
"With familiar export markets, Vietnam only has the advantage of "going ahead"
thanks to signing the FTA first but has not yet found small, niche markets in the
market. Traditional markets, for example, have not been able to take advantage of
overseas Vietnamese to exploit the market.
Calculating the total value, over the past time, FTA has helped Vietnam's goods
exports increase sharply, but mainly in the FDI enterprises sector. FDI enterprises have
a trade surplus, Vietnam has a trade surplus, and vice versa. Thus, for Vietnam, the
goal of joining an FTA to increase exports has been achieved, but the main
beneficiaries are FDI enterprises, and domestic enterprises have not met the
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requirements of the FTA, so the ability to take advantage of use is low. "About 10
years ago, FDI enterprises accounted for only about 40% of exports, but now this
figure is over 70%. Since Vietnam joined the World Trade Organization (WTO) now,
the trend has increased. The trend is that the proportion of exports of domestic
enterprises goes down and FDI enterprises continuously go up. With FTA, the State
takes a lot of effort to participate in negotiations, it is quite expensive, but the benefits
are not as expected hope.
Secondly, the budget revenue growth rate goes down.
The implementation of tariff commitments has significantly affected the growth rate of
state budget revenue. If in the period 2007-2014, the average revenue growth rate is
over 10%/year, by 2015 this rate will only increase about 3.6%. This figure in 2016
was 3.8%.
 Considering the state budget revenue of the customs sector in the period 2007-2017, it
shows that the revenue from import and export activities increased, but the export tax
revenue accounted for a decreasing proportion. If in 2007, the amount of import tax
accounted for 31% of the total revenue of the Customs sector, in November 2017 it
only accounted for 21.6% of the total revenue.
The implementation of international commitments on tariff integration aims to attract
and contribute to increasing foreign investment, reducing input costs for enterprises,
promoting production and business activities, thereby increasing the value of the
foreign investment. import and export quotas have a spillover effect in the whole
economy in increasing state budget revenue from other domestic taxes such as
corporate income tax, personal income... However, the implementation of FTA
commitments also causes a decrease in the state budget revenue from import taxes,
affecting the state budget revenue in general. FTAs have the effect of reducing revenue
directly from the volume and value of goods imported from the signed countries. In
addition, the FTA also causes indirect revenue reduction from "trade diversion", that
is, importers switch to importing from countries with FTA commitments to enjoy
special preferential tax rates instead of importing from other countries. non-FTA
countries as before.
 
According to calculations by the General Department of Customs, updated to the end
of July 2018, state budget revenue from import-export activities decreased by about
16,400 billion VND. In which, it is expected to be refunded from petroleum products
of 5,000 billion VND because the enterprise presents C/O form AK and form D. The

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second item is a complete car, in the first 7 months of the year it decreased by about
2,970 billion VND.

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tiềm ẩn của COVID-19 đối với kinh tế Việt Nam”.

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