The Effect of Bilateral Trade Agreement between Vietnam and the U.S.A Research Proposal

The Effect of Bilateral Trade Agreement between Vietnam and the U.S.A on Medium and Small Vietnamese firms That Export goods to the U.S.A - Research Proposal Example In 1995, Vietnam became a member of the Association of Southeast Asian Nations (ASEAN). On 13 July 2000, the country signed a BTA with the USA: the agreement went into effect on 10 December 2001. This agreement was part of the ongoing economic reform process in Vietnam and contributed significantly towards the country gaining membership in the World Trade Organization. In 2007, the US Congress approved a Permanent Normal Trade Relations (PNTR) agreement with Vietnam. This paper analyzes the influence of the signing of the BTA on the performance of domestic Vietnamese small and medium scale enterprises (SMEs) that were engaged in exporting to the US market. The SMEs occupy a significant position in the economy of Vietnam and it is important to know the effect of the BTA on SMEs. The paper first studies the growth rates of production, investment and employment of these Vietnamese firms before and after signing the BTA. The studies were based on the results of a survey which had earlier been conducted by two Vietnamese Agencies and one US Agency. Then, the paper itself conducts two statistical tests of its own to empirically analyze the effect of the BTA on the SMEs in the Vietnamese economy. The findings of the tests, show the BTA has caused the value of Vietnamese exports to the US market to significantly increase from 2001 onwards which in turn has caused a greater number of Vietnamese SMEs to enter the export market.... he signing of the BTA on the performance of domestic Vietnamese small and medium scale enterprises (SMEs) that were engaged in exporting to the US market. The SMEs occupy a significant position in the economy of Vietnam and it is important to know the effect of the BTA on SMEs. The paper first studies the growth rates of production, investment and employment of these Vietnamese firms before and after signing the BTA. The studies were based on the results of a survey which had earlier been conducted by two Vietnamese Agencies and one US Agency. Then, the paper itself conducts two statistical tests of its own to empirically analyze the effect of the BTA on the SMEs in the Vietnamese economy. The findings of the tests, show the BTA has caused the value of Vietnamese exports to the US market to significantly increase from 2001 onwards which in turn has caused a greater number of Vietnamese SMEs to enter the export market. Therefore, the paper indicates that there is a lot of potential to be tapped in the export sector of Vietnam. As the case of the BTA has shown, Vietnamese firms are prepared to enter the export market and leverage expanded export opportunities with foreign countries. For this, Vietnam has to search for new trading partner countries and look to enhance its trade relations with them as it has done with the USA. At the same time, Vietnam has to maintain its existing trade relationships with its current trade partners. Only then, can Vietnam’s export sector serve as an engine of growth for its overall economy. (Abbot, et al, 2007, p-2; Burmeister n.d; Martin 2009 p-2; McCaig and Pavcnik, 2011, p-2) Literature Review The entire literature can be segregated into two types: the studies of the impact of the BTA on the Vietnamese economy as a whole and the