Geographic Barriers in Trade Between Vietnam and RCEP Countries

Abstract

The article focuses on understanding the role of geographical barriers in trade between Vietnam and RCEP countries. Based on the theory of gravity model, the study proposes a research model using panel data with two main variables representing geographical barriers: distance and border effect. The article's quantitative research demonstrates that geographical distance is no longer a barrier, and the border effect no longer has a positive meaning for Vietnam's trade with RCEP countries. On the contrary, the economic size and trade openness of RCEP member countries positively impact Vietnam's trade with RCEP countries. Based on this result, the study also proposes several recommendations to increase Vietnam's trade with RCEP countries including (1) Implementing policies to develop the internal resources of Vietnam's economy, reducing the gap in economic ways with developed countries in RCEP; (2) Develop a plan to focus on promoting exports to major markets such as Australia, Japan, Korea, and New Zealand in RCEP; and (3) The Vietnamese Government needs to better implement trade management policies with countries sharing borders.