Россия и ВТО: присоединение и его последствия / Текущая аналитика / How technological readiness, among other factors, influences agricultural exports from Vietnam to the European Union by Mai Ngoc Tran

How technological readiness, among other factors, influences agricultural exports from Vietnam to the European Union by Mai Ngoc Tran

This article addresses impact of technological development of agricultural industry in Vietnam on its exports to the European Union.

Agricultural sector was especially important for Vietnam’s economic growth making Vietnam the second largest agricultural exporter in the Southeast Asia. The European Union is one of the key markets for Vietnamese exports. In 2020, the parties concluded a free-trade agreement, which helped achieve significant trade growth even against the backdrop of COVID-19 pandemic. Nevertheless, Vietnam still faces barriers to its exports, among which the authors mention suboptimal information, insufficient investment as well as requirement to adhere to strict EU regulations. Technological readiness is another major factor influencing on the export potential. In the agricultural sector such innovations mean mechanization, digitalization, biotechnology and sustainable farming practices. As the author notes, there is a significant gap in analysis of Vietnam’s exports as the Technological Readiness Index was not previously applied to the agricultural sector, so Mai Ngoc Tran deals with this shortcoming.

Mai Ngoc Tran uses gravity model augmented by variables pertaining to technological aspects: technological readiness, technological gap as well as by proportion of agricultural land area and institutional quality. The datasets sourced from the UN Comtrade, the World Bank and the World Economic Forum include trade statistics between Vietnam and eight EU members: United Kingdom, Spain, Poland, Netherlands, Italy, Germany, France, and Belgium. First, the author estimates the model by pooled model, random effects model and fixed effects model. Judging by Hausman and Wald test, the most appropriate model appears to be either FEM or REM.

It is proved that higher technology readiness levels will benefit Vietnam’s agricultural exports. Among measures taken for this, the author lists “comparative advantage, technology transfer, innovation, niche market specialization, increased agricultural productivity, enhanced supply chain efficiency, and improved compliance with food safety and quality standards.” Mai Ngoc Tran also gives policy recommendations. Firstly, more investments in R&D, transportation and warehousing should be made both by the government and by private companies. Secondly, Vietnam should actively utilize technology transfers from developed economies. Thirdly, it should seek niche markets in the EU to strengthen its competitiveness. Lastly, Vietnam should use information technologies to provide its companies with relevant up-to-date information.


Россия и ВТО: присоединение и его последствия

Кафедра мировой экономики экономического факультета Санкт-Петербургского государственного университета, которая является единственным в России и на постсоветском пространстве институциональным партнером Всемирной торговой организации и реализует проект "Кафедра ВТО", при поддержке Министерства иностранных дел Великобритании представляет Вашему вниманию информационный портал "Россия и ВТО: оптимизация последствий присоединения". Он призван обеспечить надлежащую подготовку правительства, таможенной службы и бизнес-сообщества в Северо-Западном и других регионах России к операционным изменениям и изменениям в регулировании, которых требует присоединение России к ВТО.