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Memorandum

In: Business and Management

Submitted By thanh774
Words 1314
Pages 6
Thanh Nguyen
Econ 335
Tuesday 7PM
CWID 892948886

Failure of Trade Barriers in Vietnam Auto Industry Since the “Doi Moi” reforms in 1986, Vietnam continues to pursue a transition from a centrally planned economy into a more market-oriented one. Vietnam is a member of ASEAN Free Trade Agreement, APEC and Trans-Pacific Partnership. Vietnam also signed in the 2001 bilateral trade agreement with the US and became a member of the WTO in January of 2007. Regardless, Vietnam’s government is applying high import tariff in all commodity productions and in the auto industry in particular. As a result, Vietnam is one of the countries which have the highest price for automobiles in the world. It’s more than two time higher than in developed countries and about 1.5 times higher than other countries in the ASEAN area. Buying a car is a dream for many. The high taxes being imposed on automobiles would be cut sharply to stimulate the demand and attract the investment to the automobile manufacturing.
In 1994, US President Bill Clinton ordered an end to the trade embargo on Vietnam. It remarked an important step in relationship between Vietnam and the US, and also was an incentive to develop Vietnam economy. Since 1990s, Vietnamese government has decided automobiles industry is a leading industry to develop other industries such as the chemical industry, mental and electronics. Following that a range of leading join venture manufactures set up such as Ford, Toyota, and Mercedes-Benz in Vietnam. Now eleven automotive companies are currently assembling vehicles in Vietnam, including firms based in all four major auto-producing locations: Euro, US, Japan and Korea. Determining the automobiles industry to be a key to the growth in the country’s industry sector, in the early 1990s, the Vietnamese government offered a variety of incentives to attract both domestic...

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