It is important to note that this has already been done, but the trade war has accelerated the process. Dustin Daugherty, head of North American Desk at Dezan Shira Associates, said: “Even before the U.S.-China trade war began, and more recently with the onset of the COVID-19 pandemic, Vietnam was the cheapest alternative for general manufacturing in Asia. Singapore`s history could be an example from which Vietnam can learn. In 2018, however, Harvard University economist Dani Rodrik said in the Journal of Economic Perspective that if these free trade agreements increase the volume of trade, the distribution of these benefits is another matter: “A trade agreement that is covered by another set of special interests can make things worse as easily as it makes them better.” He also wrote that “such an agreement can distract us from the effective outcome, even if it uses the cover of a free trade agreement and increases the volume of trade and investment. Rodrik stressed that the effects of free trade agreements are fundamentally uncertain and that protectionism is depending on them. These trade agreements will benefit both parties and foreign investors will be able to take advantage of opportunities to invest in Vietnam. But it is still too early to conclude the positive effects of these agreements. The spotlight will now shift to how the potential benefits and losses for both parties translate into reality and on those who could earn the most. Vietnam can also take advantage of institutional reforms and bilateral cooperation mechanisms and reaffirm to investors that it is the regional investment centre for improving technology, human resources and labour productivity. The Vietnamese Ministry of Commerce considered that the signing of these agreements would create opportunities to participate in the restructuring of new supply chains, amid the consequences of the coronavirus pandemic. Vietnam has overtaken its regional rivals Indonesia and Thailand, and is the EU`s second largest trading partner in ASEAN. Today, EU companies have the opportunity to apply for contracts with Vietnamese ministries and state-owned enterprises throughout the country.
Vietnam will allow European investors to award public contracts to ministries such as the Ministry of Defence, Vietnam Railways Corporation and dozens of public hospitals, under the control of the Ministry of Health. The European Commission estimates that the agreements would help increase exports to Vietnam by 29% in 2035 and increase GDP to $29.5 billion. Vietnam signed a fairly comprehensive bilateral trade agreement (BTA) with the United States in 2000. It came into force in 2001. The BTA was part of the post-war “trade normalization” process between the two countries and was to be seen as the powerful precursor to a watertight U.S. free trade agreement. In June 2007, Hanoi and Washington signed a framework agreement on trade and investment, another step towards a possible free trade agreement. And in December 2008, the two governments began negotiating a bilateral investment agreement (ILO), which is another. Second, it is well positioned to take advantage of the trade war between the United States and China. In the first four months of this year, foreign investment increased by 50.4% compared to the same period in 2018 (China being the largest investor). There are many stories that are supported by survey data on the transfer of investment from China to Vietnam in order to avoid tariffs on U.S.
exports. This has reinforced the optimism of vietnamese private sectors and, in the private sector, many Vietnamese companies support the Trump administration`s hard line toward China. In addition, the United States has drawn attention to other trade barriers, including inadequate intellectual property guarantees and food security rules, restrictions on the Internet and the digital economy, and other governance issues. The BTA came into force at a ceremony at Blair House with the