Abstract: | Conclusions In this paper, the direct impacts on Vietnam’s trading opportunities of the U.S. granting MFN treatment were first estimated
by building up from the resulting level of tariffs applied to individual traded goods. Then, the economic impacts on Vietnam
were inferred, using simulations with the Global Trade Analysis model. The results revealed that the increased market access
to the United States brings significant welfare gains to Vietnam. The direct terms of trade improvement resulting from increased
market access accounts for 60 percent of the total gain, with the remaining 40 percent derived from second-best induced gains
in efficiency. Exports to the United States more than doubled, from $338 million to $768 million.13 The estimated increase in exports of clothing is especially significant, with these exports increasing almost fifteenfold,
while exports of agricultural commodities decreased slightly. Total welfare as measured by Equivalent Variation increased
by $ 118 million or 0.9 percent increase in real expenditure per capita. By granting MFN status to Vietnam, the United States
also gains from improved resource allocation, although some of the gains are offset by deterioration in its terms of trade.
The gains for the United States were estimated to be around $56 million per year. |