THE ROLE OF INTERNATIONAL TRADE AGREEMENTS ON THE COMPETITIVENESS OF THE VIETNAMESE CLOTHING INDUSTRY
Abstract
The clothing industry is a labor-intensive industry and many developing countries like it as a quick way towards industrialization. The clothing industry can absorb large amounts of labor and reduce unemployment as it creates jobs for unskilled labor. Therefore, the clothing industry is seen as ounces of way of reducing a country's poverty and bringing economic growth. The end of the Multi-Fibre Arrangement in 2005 transformed the global framework, marked by the expansion of global value chains and production networks, making competition in the international apparel market more intense. As a result, maintaining international competitiveness is crucial for success in the international clothing industry. Vietnam, as a developing nation, has experienced substantial economic growth and has become a strong competitor for other developing countries in attracting foreign direct investment. This study aims to investigate the impact of international trade agreements on Vietnam’s competitiveness in the international economy, providing insights into how the country has been able to maintain its competitiveness in the challenging global apparel market.
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References
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Pickles, J., Plank L., Staritz C., Glasmeier A. (2015). ‘Trade Policy and Regionalism in Global Clothing Production Networks’, Cambridge Journal of Regions, 8: 381-402.
Pietrobelli, C., & Rabellotti, R. (2011). ‘Global Value Chains Meet Innovation Systems: Are There Learning Opportunities for Developing Countries?’ World Development, 39(7): 1261-1269.
Porter, M. (1990). ‘The Competitive Advantage of Nations’, Harvard Business Review, March-April: 73-93.
Potterie, B., & Lichtenberg, F. (2001). ‘Does foreign direct investment transfer technology across borders?’, The Review of Economics and Statistics, 83(3): 490–497.
Prebisch, R. (1964). Towards a New Trade Policy for Development, New York: United Nations for UNCTAD.
Rahman, M., & Sayeda, T. (2016). ‘The Effect of Integration with Global Apparel Value Chain’, South Asia Economic Journal, 17(2): 248-270.
Reed, R., Lira, C., Byung‐Ki, L., & Lee, J. (2016). ‘Free Trade Agreements and Foreign Direct Investment: The Role of Endogeneity and Dynamics’, Southern Economic Journal, 83(1): 176-201.
Reinert, S. (2011). Translating Empire, Emulation and the Origins of Political Economy. Cambridge: Harvard University Press.
Robertson, R. (2012). Theoretical Foundation and Empirical Approach. In: G. Lopez-Acevedo & R. Raymond (eds..) Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement, Washington, D. C.: The World Bank. pp. 19-39.
Schaumburg-Müller, H. (2009). ‘Garment Exports from Vietnam: Changes in Supplier Strategies’, Journal of the Asia Pacific Economy, 14(2): 162-171.
Schmitz, H., & Knorringa, P. (2000). ‘Learning from Global Buyers’, Journal of Development Studies, 37(2): 177-205.
Sjöholm, F. (2016). ‘Foreign Direct Investment and Value Added in Indonesia’, Research Institute of Industrial Economics, Working Paper No. 1141.
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Staritz, C. (2011). Making the Cut? Low-Income Countries and the Global Clothing Value Chain in a Post-Quota and Post-Crisis World. Washington, DC: World Bank.
Stiglitz, J. (2011). ‘Rethinking development economics’, The World Bank Research Observer, 26(1): 230–236.
Strange, S. (1996). The Retreat of the State - The Diffusion of Power in the World Economy. Cambridge: Cambridge University Press.
Suyanto, Bloch, H. & Salim, R. A. (2012). ‘Foreign Direct Investment Spillovers and Productivity Growth in Indonesian Garment and Electronics Manufacturing’, Journal of Development Studies, 1-15.
Szalavetz, A. (2015). ‘Post-crisis approaches to state intervention: New developmentalism or industrial policy as usual?’, Competition & Change, 19(1): 70-83.
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Vixathep, S., & Matsunaga, N. (2012). ‘Firm performance in a transitional economy: A case study of Vietnam's garment industry’, Journal of the Asia Pacific Economy, 17(1), 74-93.
Vu, H. T. & Pham, L. C. (2016). ‘A dynamic approach to assess international competitiveness of Vietnam’s garment and textile industry’, Springer Plus, 5(1): 1-13.
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Zhang, K. (2014). ‘How does foreign direct investment affect industrial competitiveness? Evidence from China’, China Economic Review 30, 530-539.
ASEAN Secretariat (2013) ASEAN investment report 2012: the changing FDI landscape, Jakarta: ASEAN Secretariat.
Athukorala, P., & Tien, T. (2012). ‘Foreign direct investment in industrial transition: The experience of Vietnam’, Journal of the Asia Pacific Economy, 17(3), 446-463.
Baldwin, J. & Yan, B. (2014). ‘Global value chains and the productivity of Canadian manufacturing firms’, Economic Analysis Research Paper Series, Statistics Canada, 11F0027M No. 090.
Bernhardt, T. (2013). ‘Developing Countries in the Global Apparel Value Chain: A Tale of Upgrading and Downgrading Experiences’, Capture the Gains, Working Paper 22.
Blomstrom, M. & Sjoholm, F. (1999). ‘Technology transfer and spillovers: Does local participation with multinationals matter?’, European Economic Review, 43: 915–923.
Binh, N., & Haughton, J. (2002). ‘Trade liberalization and foreign direct investment in Vietnam’, ASEAN Economic Bulletin, 19(3), 302-318.
Boltho, A. (1996). ‘The assessment: international competitiveness’, Oxford Review of Economic Policy, 12(3): 1–16.
Bonelli, R. (2015). ‘A Note on Foreign Direct Investment (FDI) and Industrial Competitiveness in Brazil’, IDEAS Working Paper Series from RePEc, IDEAS Working Paper Series from RePEc, 2015.
Braymen, C., Chang, Y., & Luo, Z. (2016). ‘Tax Policies, Regional Trade Agreements and Foreign Direct Investment: A Welfare Analysis’, Pacific Economic Review, 21(2): 123-150.
Bryman, A. (1988). Quantity and Quality in Social Research. Aldershot: Avebury
Büthe, T., & Milner, H. (2008). ‘The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through International Trade Agreements?’, American Journal of Political Science, 52(4): 741-762.
Chang, H. (2006). ‘Policy Space in Historical Perspective with Special Reference to Trade and Industrial Policies’, Economic and Political Weekly, 41(7): 627-633.
Crespo, N. & Fontoura, M. P. (2007). ‘Determinant Factors of FDI Spillovers – What Do We Really Know?" World Development, 35(3): 410-25.
Donley, A.M. & Grauerholz, L. (2012). Research Methods, New York: Infobase Publishing.
Duong, N. B. (2016). ‘Vietnam-EU Free Trade Agreement: Impact and Policy Implications for Vietnam”, World Trade Institute, Working Paper No. 07/2016.
Ernst, C., Ferrer A. H., Zult D. (2005). ‘The End of the Multi-Fibre Arrangement and Its Implication for Trade and Employment’, International Labour Organization: Employment Strategy Papers.
Fagerberg, J. (1996). ‘Technology and competitiveness’, Oxford Review of Economic Policy, 12(3): 39–51.
Frederick, S., Bair, J., & Gereffi, G. (2015). ‘Regional Trade Agreements and Export Competitiveness: the uncertain path of Nicaragua’s Apparel Exports Under CAFTA’, Cambridge Journal of Regions, 8: 403-420.
Frederick, S. & Gereffi, G. (2011). ‘Upgrading and Restructuring in the Global Apparel Value Chain: Why China and Asia Are Outperforming Mexico and Central America’, International Journal of Technological Learning, Innovation, and Development, 4 (1–2): 67–95.
Frederick, S. & Staritz, C. (2012). Developments in the Global Apparel Industry after the MFA Phaseout. In: G. Lopez-Acevedo & R. Raymond (eds.) Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement, Washington, D. C.: The World Bank, pp. 41-83.
Gabagambi, D. M. (2013). ‘Post-liberalisation Paradox in Textile Industry: A Comparative Study of Vietnam and Tanzania’, International Journal of Business and Social Science, 4(8): 191-201.
Gereffi, G. & Frederick, S. (2010). The Global Apparel Value Chain, Trade and the Crisis: Challenges and Opportunities for Developing Countries. In: O. Cattaneo, G. Gereffi, and C. Staritz. Global Value Chains in a Postcrisis World: A Development Perspective, Washington, DC: World Bank, pp: 157-208.
Gereffi, G. & Memedovic, O. (2003). The global apparel value chain: what prospects for upgrading by developing countries, Vienna: United Nations Industrial Development Organisation.
Girma, S. (2005). ‘Absorptive Capacity and Productivity Spillovers from FDI: A Threshold Regression Analysis’, Oxford Bulletin of Economics and Statistics, 67(3): 281-306.
Giroud, Axèle. (2007). ‘MNEs Vertical Linkages: The Experience of Vietnam after Malaysia’, International Business Review, 2007; 16(2):159-176.
Grossman, G., & Helpman, E. (1991). Innovation and Growth in The Global Economy. Cambridge MA: MIT Press.
Heron, Tony. (2012). The Global Political Economy of Trade Protectionism and Liberalisation: Trade reform and economic adjustment in textiles and clothing. London: Routledge.
Humphrey, J. & Schmitz, H. (2002). ‘How does insertion in global value chains affect upgrading in industrial clusters?’, Regional Studies, 36(9): 1017-1027.
Huynh, P. (2015). Employment, wages and working conditions in Asia’s Garment sector: Finding new drivers of competitiveness, Bangkok: ILO Asia – Pacific Working Paper.
IMD (2000). World Competitiveness Yearbook, Lausanne: International Institute for Management Development.
Kim, Y. (2007). ‘Impacts of regional economic integration on industrial relocation through FDI in East Asia’, Journal of Policy Modeling, 29(1): 165-180.
KPMG (2016). 10 Free Trade Agreements – Necessary Review for Incentive, KPMG [online] Available at: https://home.kpmg.com/content/dam/kpmg/pdf/2016/08/tnf-vietnam-aug4-2016.pdf [Accessed: 1 August 2017].
Le, Thi-Nham & Wang, Chia-Nan (2017). ‘The Integrated Approach for Sustainable Performance Evaluation in Value Chain of Vietnam Textile and Apparel Industry’, Sustainability, 9(3), 477.
Li, Q. & Maani, S. (2016). ‘Detecting positive effects of the ASEAN-China free trade agreement on foreign direct investment’, International Economics and Economic Policy, Volume 14. DOI 10.1007/s10368-016-0366-y.
Liem, N. D. (2015). ‘China FDI in Vietnam after Twenty Years’, Vietnam Social Sciences, 6(170): 20-31.
Lu, S. (2016). ‘Impact of the Trans-Pacific Partnership (TPP) on US textile and apparel manufacturing: A quantitative evaluation’, Journal of International Trade Law and Policy, 15(2-3), 134-152.
McCaig, B. (2011). ‘Exporting out of poverty: Provincial poverty in Vietnam and U.S. market access’, Journal of International Economics, 85(1), 102-113.
MacDermott, R. (2007). ‘Regional trade agreement and foreign direct investment’, North American Journal of Economics and Finance, 18(1): 107-116.
Mulatu, A. (2016). ‘On the concept of 'competitiveness' and its usefulness for policy’, Structural Change and Economic Dynamics, 36: 50-62.
Nadvi, K. & Thoburn, J. (2003). Vietnam in the Global Garment and Textile Value Chain: Implications for Firms and Workers, [online] Available at: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.499.6426&rep=rep1&type=pdf [Accessed: 25 April, 2017].
Nadvi, K., Thoburn, J., Thang, B. T., Ha, N. T. T., Hoa, T. N., & Le, D.H. (2004). ‘Challenges to Vietnamese Firms in the World Garment and Textile Value Chain, and the Implication for Alleviating Poverty’, Journal of the Asia Pacific Economy, 9(2): 249-267.
Nguyen, Anh, Nguyen, Thang, Pham, Ngoc, & Nguyen, Nhat. (2008). Foreign Direct Investment in Vietnam: Is There Any Evidence of Technological Spillover Effects. IDEAS Working Paper Series from RePEc, IDEAS Working Paper Series from RePEc, 2008.
Nguyen-Huu, Thanh Tam & Nguyen-Khac, Minh (2017). ‘Impacts of Export-platform FDI on the production of upstream industries - Do third country size, trade agreements and local content requirement matter? Evidence from the Vietnamese supporting industries’, Economics: The Open-Access, Open-Assessment E-Journal, 11 (2017-22): 1–31. http://dx.doi.org/10.5018/economics-ejournal.ja.2017-22
Parker, S., Phan, V. Q., & Nguyen, N. A. (2005). ‘Has the U.S.-Vietnam bilateral trade agreement led to higher FDI into Vietnam?’, International Journal of Applied Economics, 2(2), 199–223.
Pereira, S. (2013). ‘An Examination of the Impact of State Governance on Foreign Direct Investment in Vietnam’, Journal of Asian Business Strategy, 3 (10): 292-n/a.
Perkins, D. H. & Anh, V. T. T. (2010). Vietnam’s Industrial Policy Designing Policies for Sustainable Development, Cambridge: Harvard Kennedy School ASH Institute for Democratic Governance and Innovation.
Phan, T., & Jeong, J. (2016). ‘Potential Economic Impacts of the Vietnam-Korea Free Trade Agreement on Vietnam’, Journal of East Asian Economic Integration, 20(1): 67-90.
Phusavat, K., Comepa, N., Sitko-Lutek, A. & Ooi, K. B. (2012). ‘Intellectual capital: national implications for industrial competitiveness’, Industrial Management & Data Systems, 112(6): 866-890.
Pickles, J., Plank L., Staritz C., Glasmeier A. (2015). ‘Trade Policy and Regionalism in Global Clothing Production Networks’, Cambridge Journal of Regions, 8: 381-402.
Pietrobelli, C., & Rabellotti, R. (2011). ‘Global Value Chains Meet Innovation Systems: Are There Learning Opportunities for Developing Countries?’ World Development, 39(7): 1261-1269.
Porter, M. (1990). ‘The Competitive Advantage of Nations’, Harvard Business Review, March-April: 73-93.
Potterie, B., & Lichtenberg, F. (2001). ‘Does foreign direct investment transfer technology across borders?’, The Review of Economics and Statistics, 83(3): 490–497.
Prebisch, R. (1964). Towards a New Trade Policy for Development, New York: United Nations for UNCTAD.
Rahman, M., & Sayeda, T. (2016). ‘The Effect of Integration with Global Apparel Value Chain’, South Asia Economic Journal, 17(2): 248-270.
Reed, R., Lira, C., Byung‐Ki, L., & Lee, J. (2016). ‘Free Trade Agreements and Foreign Direct Investment: The Role of Endogeneity and Dynamics’, Southern Economic Journal, 83(1): 176-201.
Reinert, S. (2011). Translating Empire, Emulation and the Origins of Political Economy. Cambridge: Harvard University Press.
Robertson, R. (2012). Theoretical Foundation and Empirical Approach. In: G. Lopez-Acevedo & R. Raymond (eds..) Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement, Washington, D. C.: The World Bank. pp. 19-39.
Schaumburg-Müller, H. (2009). ‘Garment Exports from Vietnam: Changes in Supplier Strategies’, Journal of the Asia Pacific Economy, 14(2): 162-171.
Schmitz, H., & Knorringa, P. (2000). ‘Learning from Global Buyers’, Journal of Development Studies, 37(2): 177-205.
Sjöholm, F. (2016). ‘Foreign Direct Investment and Value Added in Indonesia’, Research Institute of Industrial Economics, Working Paper No. 1141.
Standard Chartered (2017). Standard Chartered: Vietnam gets back on track after drought, GDP growth forecast at 6.6% this year, Standard Chartered [online] Available at: https://www.sc.com/global/av/vn-vietnam-gets-back-on-track-after-drought.pdf [Accessed: 4 August 2017].
Staritz, C. (2011). Making the Cut? Low-Income Countries and the Global Clothing Value Chain in a Post-Quota and Post-Crisis World. Washington, DC: World Bank.
Stiglitz, J. (2011). ‘Rethinking development economics’, The World Bank Research Observer, 26(1): 230–236.
Strange, S. (1996). The Retreat of the State - The Diffusion of Power in the World Economy. Cambridge: Cambridge University Press.
Suyanto, Bloch, H. & Salim, R. A. (2012). ‘Foreign Direct Investment Spillovers and Productivity Growth in Indonesian Garment and Electronics Manufacturing’, Journal of Development Studies, 1-15.
Szalavetz, A. (2015). ‘Post-crisis approaches to state intervention: New developmentalism or industrial policy as usual?’, Competition & Change, 19(1): 70-83.
Szirmai, A. (2012). ‘Industrialization as an Engine of Growth in Developing Countries, 1950-2005’, Structural Change and Economic Dynamics, 23(4): 406-420.
Szirmai, A. & Verspagen, B. (2015). ‘Manufacturing and Economic Growth in Developing Countries, 1950-2005', Structural Change and Economic Dynamics, 34: 46-59.
Tyler, G. (1993). ‘The Nation-State vs. the Global Economy’, Challenge, 36(2): 26-32.United Nations Industrial Development Organization (2011). Industrial Development Report 2011: Industrial Energy Efficiency for Sustainable Wealth Creation, Vienna: United Nations.
Vixathep, S., & Matsunaga, N. (2012). ‘Firm performance in a transitional economy: A case study of Vietnam's garment industry’, Journal of the Asia Pacific Economy, 17(1), 74-93.
Vu, H. T. & Pham, L. C. (2016). ‘A dynamic approach to assess international competitiveness of Vietnam’s garment and textile industry’, Springer Plus, 5(1): 1-13.
Wade, R. (2016). ‘The role of the state in escaping the middle-income trap: The case for smart industrial policy’, METU Studies in Development, 43(1): 21-42.
Walliman, N. (2005). Your Research Project: A Step-by-Step Guide for the First-Time Researcher: London, Sage.
Blomenhofer, M (2017). The rise of Korean investment in Vietnam How Korean companies can continue to thrive in an exciting but challenging jurisdiction, KROLL [online] Available at: https://www.kroll.com/-/media/kroll/pdfs/publications/the-rise-of-korean-investment-in-vietnam.ashx [Accesses: 16 February 2023].
WTO (2016). World Trade Statistical Review 2016, World Trade Organisation, [online] Available at: https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf [Accessed: 10 June 2017].
Zhang, K. (2014). ‘How does foreign direct investment affect industrial competitiveness? Evidence from China’, China Economic Review 30, 530-539.
Published
2023-02-28
How to Cite
Izza , A. (2023). THE ROLE OF INTERNATIONAL TRADE AGREEMENTS ON THE COMPETITIVENESS OF THE VIETNAMESE CLOTHING INDUSTRY. Journal of Social Political Sciences, 4(1), 64-81. https://doi.org/10.52166/jsps.v4i1.155
Section
Articles
Copyright (c) 2023 Atina Izza S
This work is licensed under a Creative Commons Attribution 4.0 International License.
