The effects of trade facilitation on Vietnam's trade relationship with ASEAN countries

Abstract

In trade agreements, the term “trade facilitation” is commonly used. Countries that participate in trade agreements must abide by the conditions of the agreement. The purpose of this study is to apply the gravity model to evaluate trade facilitation measures for the trade relationship between Vietnam and ASEAN countries from 2000 to 2020. The effects of trade facilitation measures are positive, according to the results of ordinary least squares regression and a fixed effects model. This work employs the System Generalized Method of Moments estimator to solve the endogenous problem. The findings also demonstrate that trade facilitation had a favorable impact on Vietnam's trade flows throughout this time period. This demonstrates that the deployment of trade facilitation measures in recent years has improved the trade ties between ASEAN members and Vietnam. The execution of these policies not only improves Vietnam's increasingly healthy business environment, but also aids the country's progressive transformation into one of the world's most open economies.