THE IMPACT OF VIETNAM EUROPEAN UNION FREE TRADE AGREEMENT ON VIETNAM - EUROPEAN UNION TRADE: A TRADE INDICATORS-BASED ANALYSIS

Abstract

This study examines the trade structure between Viet Nam and the European Union in the context of the implementation of the European Union - Viet Nam Free Trade Agreement, aiming to assess the extent to which the agreement has been utilized and to identify future trade potential. The research employs trade data from United Nations Comtrade and International Trade Center’s Trade Map data during the period 2004-2023 and applies standard trade indices such as the Revealed Comparative Advantage, Trade Intensity Index, and Trade Complementarity Index. The findings indicate that Viet Nam holds stable comparative advantages in 18 product groups at the HS-2 level, particularly in textiles, seafood, electronics, and wood products. However, the Trade Intensity Index between Viet Nam and the European Union remains relatively low, ranging from 0.45 to 0.55, compared to significantly higher Trade Intensity Index values with the United States (above 1.4) and China (above 1.2), highlighting the limited depth of trade integration with the European Union. The Trade Complementarity Index results also show only a moderate match between Viet Nam’s export structure and European Union import demand. These findings suggest that to fully benefit from the Vietnam-European Union trade European Union Vietnam Free, Viet Nam must not only improve product quality but also reorient its export structure to better align with the European Union market’s demand patterns.